If you think the rioting and looting are bad now, wait until the supplemental unemployment benefits expire, or inflation wipes out their value. What happens when price controls or rationing lead to food and power shortages? What we're seeing now is but a glimpse of what's coming.
Powell admitted the Fed crossed a lot of red lines that had never been crossed before, but that given the situation it was necessary, and the Fed would figure it our afterward. It's the Nancy Pelosi version of monetary policy, "we need to print the money to see where it goes." The UMich Consumer Sentiment Survey unexpectedly fell to a 7-year low of 72.3 in May, down from 73.7 in April. The expectation was for a rise to 74. To me the surprise isn't that the number dropped, but that it didn't drop by more. The outlook is far worse than consumers realize.
The Chicago PMI collapsed to 32.2 in May, its lowest level since 1982. Analysts had expected a recovery to 40 following the 35.4 print in April. While investors continue to expect a V-shaped recovery, the data continues to show that the economy is far weaker than most believe. Maybe the real reason GoldmanSachs is so bullish on the dollar is that as a primary dealer of U.S. Treasuries, they have a lot of dollars to sell. If Goldman's clients realized the dollar's fate, they wouldn't buy any Treasuries. Whether default or inflation, loss is inevitable.
Powell admitted the Fed crossed a lot of red lines that had never been crossed before, but that given the situation it was necessary, and the Fed would figure it our afterward. It's the Nancy Pelosi version of monetary policy, "we need to print the money to see where it goes." The UMich Consumer Sentiment Survey unexpectedly fell to a 7-year low of 72.3 in May, down from 73.7 in April. The expectation was for a rise to 74. To me the surprise isn't that the number dropped, but that it didn't drop by more. The outlook is far worse than consumers realize.
The Chicago PMI collapsed to 32.2 in May, its lowest level since 1982. Analysts had expected a recovery to 40 following the 35.4 print in April. While investors continue to expect a V-shaped recovery, the data continues to show that the economy is far weaker than most believe. Maybe the real reason GoldmanSachs is so bullish on the dollar is that as a primary dealer of U.S. Treasuries, they have a lot of dollars to sell. If Goldman's clients realized the dollar's fate, they wouldn't buy any Treasuries. Whether default or inflation, loss is inevitable.
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This is not personal investment advice.
