All right, by inflation heating back up again.
Put a little numbers up on the board the last
three months at an annual rate
CPI 4% X food and energy core
CPI 4.2% core services X rents.
That's the core, core inflation that the feds end up
6.9%. Three months can't be good.
Anyway, Let's talk about it.
Taylor Riggs, Co host of The Big Money Show,
and John Carney, Breitbart News,
Finance and Economics editor and
co-author of the Breitbart Business Digest.
John. But the games begin.
How bad a number was this?
This was very bad. Not just because these numbers were
bad and higher than expected,
but because it is a confirmation that January was not
an anomaly,
that inflation is going back up.
We haven't really made any progress on inflation for eight
months and now for the last four months it has
been creeping back up four months in a row of
headline inflation month to month going up.
This is means the Fed cannot cut.
They say they are looking for more confidence.
I don't see how you can look at these numbers
and say I'm more confident.
Did anybody from the feds speak today about this?
No, we're in a quiet period because we're heading into
our Fed meeting soon.
But you know who we did hear from?
Jamie Dimon, he was speaking overnight over and I think
in Australia.
And he said that the Fed shouldn't be cutting in
the first half of the year,
maybe the second-half of the year if at all.
But they should be dated,
dependent. We also had Art Laffer on our program.
No, he's a friend of this program as well And
he said interesting points in election year.
So the Fed cutting in the second-half of year,
they have to be very careful.
He almost made the point.
Do it now or do it never.
They probably won't do it.
Nope. I don't think they can do it in September.
If they tried to cut in September,
that would be the looked at as the most political
cut there's ever been.
It will create backlash. They know they want to defend
their independence.
They're not going to cut in September.
So I think they're not.
If they don't cut the first half,
they don't cut the back half.
Maybe they cut in November,
like the week after day after dealing.
Well, that's an interesting point.
But Joe Biden has already said expects them to cut
before.
If they do cut before,
the other candidate starts with AT
will scream at J Powell,
which he's accustomed to doing anyway.
So it'd be just like old times.
You have to think Joe Biden's advisors must have been
pulling their hair when he was out there saying,
I bet you they're going to cut,
right? Because that actually puts the Fed in a really
awkward position.
Now if they cut, they look like they are obeying
what Joe Biden told them to do.
So it's just interesting. The stock market went up today.
What did you say? The S&P hit a record high,
record high. So that's important.
On the other hand, inflation is not creeping down.
It's kind of creeping up or maybe it's just creeping.
But I'm just saying this is something the Fed has
to pay attention to.
If you're going to meet your target of 2%,
there's nothing in here that says you're meeting your target
at 2%,
right? And if you have a core at
3.83.7, you're still almost double
the target of 2%. I know this Fed usually looks
at PC and this is CPI,
but still we're nowhere near 2%.
I think some of the notes I was reading today
is that Harkins,
back to the 1970s, the era when we thought that
we had inflation under control,
we cut and then you saw a big re acceleration
in inflation.
I think that's what the Fed needs to be really
worried about is making sure especially with the stock market
at record high,
you talk about financial conditions,
they're loose, they're easy. You're not seeing credit spreads widen.
You're not seeing all the traditional signals that the market
is under pressure.
And so all of this even Bitcoin for example near
70,000 showing that it is sort of all risk on
in the easing of these financial conditions.
Let's talk about Bitcoin and let's,
I'm going to add some Bitcoin Gold
Gold's had tremendous move here.
I think it was might have been off today,
but that tremendous move and Bitcoin ever since the
ETF's were put into place.
Now it got to correct me if I'm wrong,
but in round numbers it's gone from 40,000 to 70,000.
I had a chance to buy it at
$600.00 many years ago. I regret to say I didn't.
John, what do you make of this Bitcoin rally and
is gold part of that?
Is this, is this easy money or what is it?
I think, I think a big part of it is
easy money.
I think that the people say that the Fed is
very restrictive right now,
but if you look at things like Bitcoin,
it says no, they're not restrictive.
A lot of people want to buy Bitcoin,
by the way, as a hedge against inflation.
That didn't really work at all.
It's not a very good hedge against inflation,
but I do think it is telling you that right
now people are not saying,
oh, I better have a risk off trade.
You're not seeing that in the stock market.
You're not seeing it in Bitcoin.
I agree with that. But did you know what Costco
said last quarter?
They sell gold bars. They sold $100 million of gold
bars last quarter and they launched today that they want
to sell silver coins.
So I think there is sort of this idea of
where do you put your money in this sort of
inflationary environment.
That's the thing. Is it a hedge against is gold
still a hedge against inflation?
I think you could argue yes.
Or if you don't have faith in a currency,
instead of putting cash under the mattress,
you're putting gold bars in your bathtub or your pool.
I don't know, but gold is gold is traditionally been
looked at as something
to diversify your portfolio, own a little bit of gold
and now you can own it.
But you don't have to go to a gold dealer,
you don't have to go to your broker.
You could actually go to Costco and own a little
bit of gold,
but with these
indexes or ETFs for Bitcoin now that's really,
that's a booster rocket and it kind of puts them
into the game in a way that they weren't in
the game before.
Although it does undermine part of like the original use
case for Bitcoin.
It was supposed to free you from the financial system.
It was going to be its own financial system.
What we're seeing is it's actually going up a lot
because it's getting integrated into the financial system.
Being an ETF means you can call your broker at,
you know, anybody and say,
hey, I would like to own a Bitcoin ETF.
You don't have to go through all of the
hurdles that you used to have to go to to
actually buy a Bitcoin.
You don't have to worry about it.
You losing your hard drive and losing all your bitcoins.
That's my problem. I lost my hard drive with all
my Ethereum on it.
This is beyond the scope of this segment,
but
the Treasury and the Fed
would like to control digital currencies.
Do you think that will ever happen?
There's a lot of opposition to it in the Senate,
in the House, in the marketplace.
But the Fed in particular talks about controlling it,
you know, creating their own essential
bank digital currency. I mean,
I'm, I don't want that because I don't want them
to control everything.
But is such a thing possible?
I think to your point earlier about trying to evade
surveillance,
a lot of people who've talked about a Federal Reserve
creating a central bank digital currency,
they don't want it because it's really easy for a
government to come in and say,
actually we don't like what you're doing or we're snooping
on you or whatever and shut you off.
You talked about China's central bank digital currency
and some of the controls,
if you will, that they have on their population of
that country.
That was a joke. It's sort of not exactly.
I mean, no, it doesn't promote surveillance,
I'll give you the last word.
So absolutely, I think it's a good idea to have
things that compete with the official currency.
So remember, Roosevelt banned gold ownership at one point going,
you know, banning essentially this would be banning private ownership
of crypto currencies.
I don't think that's a good idea.
I think the the Fed should stay out of it.
Let this compete with the dollar just like every other
commodity
competing currencies wrote about it all.
And Jay Powell last week in his testimony said he's
nowhere near looking at his central bank digital currency.
So inflation still a little bit worrisome.
That's what we got it all right.
No Fed rate cut. Sorry about that.
John Carney. Taylor, Riggs. Be sure to catch Taylor
along with her Co host Brian Brandberg and Jackie Deangelis
Big Money Show weekdays everyday 1:00 PM Eastern right here
on Fox Biz.