Real Inflation Hits 3.3%… The Fed Will Have To Choose Which Bubble to Burst

Anyone who continues to claim the Consumer Price Index (CPI) actually measures REAL inflation is in abject denial.

In May of this year, the BLS managed to claim that CPI only rose a measly 0.2% due to the fact that used car prices and airfares dropped. Yes, the BLS used the drop in those two items to negate the sharp rise in healthcare expenses, energy prices, housing prices, and even food prices.

The BLS was at it again in the most recent CPI, this time using a RECORD drop in HOTEL COSTS to insure that inflation rose only 0.1% in June.

What makes this spectacularly ludicrous is the fact that the Fed’s “in-house” inflation measure, the Underlying Inflation Gauge (UIG), shows REAL inflation is well over 3%.

The UIG now has inflation at 3.3%.

Why does this matter?

Because bond yields trade based on inflation. If inflation is soaring higher, bond yields will also rise to accommodate this.

If bond yields RISE, bond prices DROP.

And if bond prices DROP enough, the Debt Bubble bursts.

With that in mind, consider that yields on Treasuries have broken their long-term 20-year trendline.

This is a MAJOR problem. The entire debt bubble requires interest rates to remain LOW in order for it to be maintained.

Inflation is screwing this up for the Fed… which now faces a NASTY choice… continue to support stocks or defend bonds… and unfortunately for stock investors, it’s going to have to choose bonds.

Put another way, I believe there is a significant chance the Fed will let the stock market collapse in order to drive capital BACK into the bond market to force bond yields down.

Yes, the Fed has screwed up with monetary policy. And it is doing so intentionally to try to sustain the Debt Bubble. Currently the downside target for the collapse is in the 2,300-2,450 range.

The time to prepare for this is NOW before the bloodbath hits.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Disclaimer: The information contained on this website is for marketing purposes only. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice by Phoenix Capital Research or any of its affiliates, nor is it to be relied upon in making any investment or other decision. Neither the information nor any opinion expressed on this website constitutes and offer to buy or sell any security or instrument or participate in any particular trading strategy. The information in the newsletter is not a complete description of the securities, markets or developments discussed. Information and opinions regarding individual securities do not mean that a security is recommended or suitable for a particular investor. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. 

Opinions and estimates expressed on this website constitute Phoenix Capital Research's judgment as of the date appearing on the opinion or estimate and are subject to change without notice. This information may not reflect events occurring after the date or time of publication. Phoenix Capital Research is not obligated to continue to offer information or opinions regarding any security, instrument or service. 

Information has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. Phoenix Capital Research and its officers, directors, employees, agents and/or affiliates may have executed, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on this email. 

Past performance is not necessarily a guide to future performance and is no guarantee of future results. Securities products are not FDIC insured, are not guaranteed by any bank and involve investment risk, including possible loss of entire value. Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. 

Phoenix Capital Research is not responsible for the content of other websites or emails to which this one may be linked and reserves the right to remove such links. OmniSans Publishing LLC and the Phoenix Capital Research Logo are registered trademarks of Phoenix Capital Research. Phoenix Capital Management, Inc.
What Happens When the Everything Bubble Bursts?
  • By trying to corner the bond market (risk-free rate)
  • the Fed has created a bubble in everything
  • We call this THE EVERYTHING BUBBLE
  • Reserve your copy of our Executive Summary
  • To prepare for what's coming down the pike!
Your contact information will never be rented or sold to anyone EVER.