The Presstitutes in the mainstream corporate media treated Thursday’s CPI report as though it was a watershed for the country and that a 0.1 percent fall was the miracle the stock market has been waiting for.
What a bunch of bullshit, Gerald Celente said.
He noted that The Trends Journal forecast in November that if the Fed eases its monetary tightening, the market is going to shoot up.
He said, “Wall Street money junkies need their cheap monetary methadone to keep gambling.”
“So if they [the Federal Reserve] only raise interest rates 25 basis points, markets keep going up,” he said, noting that the stock market traditionally goes up about 15 percent after a midterm election.
The Labor Department announced that consumer price index, which measures goods and services rose 6.5 percent, while core increased 5.7 percent. A drop in gas prices was seen as the main impetus for the decline.
CNBC noted: Food prices increased 0.3% in December while shelter also saw another sharp gain up 0.8% for the month and now 7.5% higher from a year ago. Shelter accounts for about one-third of the total CPI index.
The CPI index hit its peak in June, when it came in at 9.1 percent. The CPI edged up just 0.1 percent month to month in November and inflation’s overall rate slowed to an annual pace of 7.1 percent, compared to 7.6 the month before.
The Wall Street Journal noted that the cooling likely means the Fed will reduce the size of interest-rate increases to a quarter-percentage-point at their meeting that concludes on Feb. 1, down from a half-percentage point increase in December.
By raising interest rates, central banks make loans more expensive, discouraging people from taking out loans to buy homes, cars, and other big-ticket items. The loss of spending on major items has a ripple effect throughout the economy.
When demand for items falls, so do their prices.
TRENDPOST: As we have repeatedly noted, central banks began raising interest rates far too late to tamp down inflation before it raced beyond their control.
At his December 2020 press conference, Fed chair Jerome Powell pointed to “disinflationary pressures around the globe” and said “it’s not going to be easy to have inflation move up.”
A month later, with inflation on the move well above the Fed’s 2-percent target rate, Powell said it was only “temporary.”
In July, with inflation running at 5 percent, Powell told a Congressional committee that “we really do believe that these things will come down of their own accord as the economy reopens,” he noted.
As we noted in “Fed: Stronger Economy, Steady Rates” (23 Mar 2021), Fed officials predicted overall U.S. inflation in 2021 would be 2.4 percent. Instead, it topped 6 percent in October 2021 and has kept on rising.
Better late than never, the Fed’s higher interest rates are having an effect on inflation, but that effect is secondary. Prices are rising at slower rates largely because more and more consumers can no longer afford to spend as much.
As the old saying goes, “the cure for high prices is high prices.”
“The one aim of these financiers is world control by the creation of inextinguishable debt.” ― Henry Ford