PPI and the BOJ
Readers of these pages already know the drum we have been beating to death, rates will go up much farther than most expect, and we now expect a Fed Funds rate of 5.25 - 5.5% before any pauses.
Mich Sentiment 87.4 vs prior 91.2; Total PPI +0.3 vs prior +0.6; Core PPI +0.4% vs prior +0.1% clearly showing the CORE is suffering from energy pass through and inflation rages on, hardly "contained" and anything but "benign".
From Breifing.com: "The jump in Core PPI breaks the trend of low numbers, and may signal a firming trend. If that's true, the firming in core inflation rates will be part of the incoming data on which the Fed will be focused. The uptick increases concerns over the length of the current monetary tightening cycle."
The BOJ, BOE, ECB, PBOC and Fed know their loose monetary policies are responsible for the overspeculated asset bubbles currently in motion.
The central banks will keep raising rates to slowly squeeze the speculators out of the various overinflated asset markets (equities, bonds, commodities and real estate).
In the last week and a half, the Bank of Japan by just jawboning about a rate hike has precipitated an Asian commodities sell off and leveraged hedge fund unwind.
CRB -8%; Oil -10%; Gold -10% along with Zinc, Copper, Platinum, Silver, Natural Gas and Gasoline futures getting tanked (no pun intended) without even firing a shot.
Imagine what will happen when the multiplier effect really gets going, in the opposite direction that is.
Energy pass through inflation and Gulf rebuilding efforts will mask any downturn in our economy. By the time the Fed realizes there is a slowdown in late 2006, early 2007, it will be too late.
Ever see the end of a twister? As the vortex snaps up and the funnel dissipates upward into thin air, you get the picture.
Mich Sentiment 87.4 vs prior 91.2; Total PPI +0.3 vs prior +0.6; Core PPI +0.4% vs prior +0.1% clearly showing the CORE is suffering from energy pass through and inflation rages on, hardly "contained" and anything but "benign".
From Breifing.com: "The jump in Core PPI breaks the trend of low numbers, and may signal a firming trend. If that's true, the firming in core inflation rates will be part of the incoming data on which the Fed will be focused. The uptick increases concerns over the length of the current monetary tightening cycle."
The BOJ, BOE, ECB, PBOC and Fed know their loose monetary policies are responsible for the overspeculated asset bubbles currently in motion.
The central banks will keep raising rates to slowly squeeze the speculators out of the various overinflated asset markets (equities, bonds, commodities and real estate).
In the last week and a half, the Bank of Japan by just jawboning about a rate hike has precipitated an Asian commodities sell off and leveraged hedge fund unwind.
CRB -8%; Oil -10%; Gold -10% along with Zinc, Copper, Platinum, Silver, Natural Gas and Gasoline futures getting tanked (no pun intended) without even firing a shot.
Imagine what will happen when the multiplier effect really gets going, in the opposite direction that is.
Energy pass through inflation and Gulf rebuilding efforts will mask any downturn in our economy. By the time the Fed realizes there is a slowdown in late 2006, early 2007, it will be too late.
Ever see the end of a twister? As the vortex snaps up and the funnel dissipates upward into thin air, you get the picture.
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