While the Fed is still printing $120 billion a month and repressing short-term rates to near 0% in the most monstrously overstimulated economy.
The lowest lowball inflation measure that the US government releases, the PCE price index without food and energy rose by 3.64% in September, compared to a year ago, the hottest inflation reading since May 1991.
This “core PCE” is the inflation measure that the Fed uses for its official inflation target of a “symmetrical” 2%. The reason it uses this measure is because it is the lowest lowball inflation measure the government publishes, and it understates actual inflation even more than other indices the government publishes. For example, CPI-U inflation in September was 5.4% and CPI-W was 5.9%, which themselves understate actual inflation.
Food and energy, precisely what regular people spend a lot of their money on, are excluded from the Fed’s inflation measure because prices of food and energy jump up and down a lot and create even more volatility in the inflation index.
But the regular headline PCE price index – we’ll get to it in a moment – has been running higher over the years than core PCE. Since 2012, when both index values were set to 100, the headline PCE index increased 1.5% faster than core PCE index.
The close-up of core PCE, covering the past 10 years, shows a little more closely what is happening on a year-over-year basis.
On a month-to-month basis, the core PCE index rose 0.21%, according to the Bureau of Economic Analysis today. Month-to-month readings are volatile. But when they’re bunched together in a long-term view, the dynamics emerge. Note the volatility in the 1970s, as inflation was rising, leading to year-over-year core PCE to exceed 10% in early 1975 and 9% in 1980. In between there were years paved with false hopes that this thing would go away on its own, but it didn’t, and interest rates were far higher already, and the Fed wasn’t doing QE:
Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden? They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.
Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.
Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about.
It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.
The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.