Senior Managing Editor of The Freeport Society
Charles beat me to my soap-box session I’d planned for today. He wrote to you yesterday about the recent Consumer Price Index (CPI) numbers and the markets’ reaction to them.
I’m still climbing onto that soap-box anyway.
I’m angry.
I’m frustrated.
And I’m guessing many, many other Americans are as well.
So inflation cooled in July. Good.
But, while investors were ecstatic to hear the news because we’ll now get a rate cut for sure… the rest of us are still paying painfully more for things than ever before.
In 2020, a pound of steak cost $7.67. In July, it cost $10.85. That’s a 41% increase in the last four years.
A Hulu subscription will soon be $18.99 a month. It was just $8 a month in 2020. That’s 137.37% more expensive!
Electricity…
In 2020, it cost 13.15 cents per kilowatt-hour. In July, it cost 16.43 cents. That’s a 24.9% increase.
Gas…
It was $1.98 per gallon four years ago. In July, it was $3.60 per gallon. That’s an 81% increase!
Big Macs cost 21% more.
The price for a dozen eggs has more than doubled (up 104%).
Even Top Ramen noodles – for goodness sake – cost 56% more than they did at the beginning of 2020.
Yet we should all be doing a happy dance that inflation cooled in July.
Why, then, am I not celebrating?
Because next month, prices will be even higher. Meaning there’ll be even less money in Americans’ pockets. After all, even though inflation has cooled, there’s still inflation.
Because, generally speaking, wages aren’t increasing at the same rate. If the stats can be trusted, wages have increased 22.7% since 2020 while consumer prices have increased 21%, according to a Bankrate analysis of Bureau of Labor Statistics data.
If any of those numbers were true, on paper it looks like consumers are earning slightly more than inflation.
It’s this kind of B.S. that makes me see red.
The average American is suffering.
Aging Americans relying on Social Security are suffering even more.
This is yet another reminder of the value of being a member of The Freeport Society. This community is focused on cutting through the B.S.… looking behind the statistics and lies. It’s where we consider reality rather than wishful thinking… and where we seek to find investment opportunities that truly help us protect and grow our wealth despite the chaos.
Here’s how we did that this week in The Freeport Navigator…
The Value of “Alternatives” in This Age of Chaos
On Monday, John Pangere discussed collecting and trading sports cards, and how to spot their value. It’s not much different than trading stocks. Read more about it here.
Did Japan Just Hand Donald Trump the Win?
We know Japan’s money moves shook up the financial scene across the world, but it might even impact who our next president will be. Michael Gayed explains how and what that would mean for the country. Continue reading here.
Premature Celebrations: How the Next President Will Reignite Inflation
Despite the latest CPI numbers, inflation is still alive and well. Americans aren’t seeing the cooling reflected in prices. Plus, there’s a lot more going on. Charles gets to the bottom of it in Friday’s article.
Looking Ahead
Inflation is far from being “under control,” despite what “they” are trying to make you believe.
Next week, we’ll see how this economic turbulence is really impacting people.
On Thursday, we’ll get the existing home sales numbers for July, followed by new home sales data on Friday.
Unlike those CPI figures that seem disconnected from our daily lives, these housing stats hit closer to home – literally. They’ll show us how folks are navigating big financial decisions in the unpredictable market.
Can people afford to buy a house while juggling rising costs in every other aspect of their lives? I’d say that’s a tall order. We’ll see what the data says. And it will likely anger us even more.
We’ll also see what Atlanta Federal Reserve President Raphael Bostic has to say in his prepared comments on Tuesday.
Bostic has been one of the more cautious members of the Fed’s governing body, commenting a few months ago that he wasn’t in a “mad dash hurry” to lower rates. You might say he’s been a wet blanket on the rate-cut party.
I’d argue he’s one of the saner voices in the room (by Fed standards), arguing that cutting rates too soon risks igniting inflation again and starting a new round of “FOMO” mentality in the market.
Will Bostic rain on the rate-cut parade? We’ll find out soon enough. The futures markets are pricing in a literal 100% probability that the Fed cuts rates next month… and a 23.5% chance that they do a jumbo cut of 0.5%.
If we get signals this week that future cuts are going to be slower or fewer than Wall Street expects, we might see a lot of disappointed traders… and a lot more market volatility.
Stay tuned.
To life, liberty, and the pursuit of wealth.