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Economy is Weakening But at Least the Cost of Living is Rising – Ep. 63

  • Bad economic news coming in is more a deluge than a trickle
  • Dollar continuing to drift lower since “patience” was removed
  • New Zealand Dollar record high against the euro and the Australian dollar
  • New Zealand enjoys a strong currency, economic growth, low inflation and low unemployment
  • Swiss franc had a strong day today
  • Chicago Fed National Activity Index revised down to -.11
  • Three consecutive months of declining numbers
  • Deteriorating numbers reflect pattern similar to pre-QE3 months
  • Existing home sales number below estimates
  • February new home sales up, however
  • Richmond Fed Manufacturing Index -8, twice as low as most negative forecast. declining 4 times in 5 months
  • CPI came in at .2%, exactly as expected; core up to 1.7
  • Price of ground beef up 19.2%, at a record high
  • The jobs numbers are a lagging indicator
  • We are likely to see a jobs number downturn based on less optimistic assumptions
  • Weaker jobs number will keep rates low
  • The only thing that might drive rates higher is inflation, but goal of “medium term” is vague
  • Weaker economy and higher inflation will cause dollar to drop
  • When inflation is the only focus, it will be obvious that the Fed cannot raise rates, driving dollar down
  • A currency crisis will finally force the Fed to raise rates