So let's talk inflation we know the CPI Number is a fantasy it doesn't matter if It's five percent or ten percent it Doesn't really reflect what is happening In the real world and to be honest it Feels more like double or even triple The official number especially when it Comes to things that matter things like Food shelter and gas but if that's not Bad enough if you're about to enter the Twilight Zone remember when the White House tried to redefine inflation that Time will they denied things were bad Even though GDP fell two quarters in a Row well now the Federal Reserve is Trying to invent a new way to measure Inflation and it's called super core Inflation now Supercar inflation is the Craziest thing I've heard in my life if The Federal Reserve is going to use that To direct monetary policy we are in deep Trouble so here's what Supercar Inflation is it is inflation that takes Away food and energy prices in addition To shelter here I have to repeat this Again the Federal Reserve is measuring Inflation as if people donate food gas Or shelter to survive and according to CNN super core inflation refers to Prices that rise when workers get paid More for their services for example Haircuts electrical work and gardening Apparently the price of a haircut can Better indicate the direction of prices
In the United States economy better than Grand now your own power is obviously Trying to measure inflation purely based On employment and wages right he Believes that inflation food energy and Housing is too volatile and that doesn't Reflect the real economy which is Outrageous now in other words if the fat Just looks at supercoil inflation we Could be in a situation where even if Food and energy prices and housing Prices they go up but wages are stagnant The inflation fight is won and it's Crazy to think that supercoil inflation Can predict the prices of headline Inflation right and this is an obvious Attempt to try and keep inflation Expectations low I think you understand How dangerous this measure is because it Paints a much Rosier picture of the Economy than reality you can slap Lipstick on a pick but it is still a pig Now we know the Federal Reserve is still On their hiking cycle and they're going To take interest rates up above five Percent easily in 2023 right now we have Forecasted five percent and above for a Long time on this channel because Inflation is a true enemy and what a fat Uses to measure inflation is extremely Important because we know they aren't Really looking at the headline CPA of 6.4 percent and if you take a look at Super core inflation we can see it has
Dropped to 6.1 percent but remember this Doesn't include food energy and shelter Yes labor costs they are still high and The Federal Reserve is still going to Hike further but let's look at the Overall trend of this new measure now it Looks like super cool inflation is Coming down faster and that could give The FED more room to reduce the amount Of hiking down the road and it's always To their benefit if inflation looks Lower than reality and here's the funny Thing if we base super coin inflation Over the last three months through December it is just just 2.4 percent now Inflation is truly not set in stone you Can always redefine it however you want Right just keep taking the variables Until the number looks great now in fact If we use Paul krugman's measure that Also strips out used cars in addition to Food energy and shelter super core Inflation is now below two percent and I Think we can see how ridiculous that is And let's ask ourselves a very stupid Question that's the cause of gardening Or manicure predict food prices of Course not food prices move based on a Simple law or supply and demand now the Prices at the nail salon can come down By 50 but if Supply chains that Disrupted the price of bread and pasta Can fly up by 20 and this is why I want Us to take a look behind the curtain and
Truly understand how bad the inflation Giant is let's look at the three Inflation metrics that truly matter to People on planet Earth right which is Energy food and shelter and we can see That energy inflation has indeed dropped Dramatically down from 41 percent in June soon to just 8.7 in January but it Is still a big pressing problem gas Prices they are still rising and looking At Food inflation the number is a Double-digit disaster the price of goods Is still up 10.1 percent compared to a Year back and this is crazy high it's Causing a lot of suffering to people Trying to survive right you can choose Not to drive a car but you still have to Eat just look at eight prices before the Big run up eggs were below two dollars In January 2022 now 12 months later eggs Are over 4.80 and that's more than Double the price easily finally we can See shelter inflation has been rising Non-stop coming in hot at 7.9 percent Look at the trend guys yes it's been Going up without pause for almost two Years straight and looking at the Average household budgets for American Families 29 goes to housing 14 goes to Transportation and 11 goes to food so Over 50 of the household money goes to These three categories and this is why The Federal Reserve is trying to Redefine inflation because the reality
Is much harsher if they had to face the Truth stopping Dr rate hikes at five or Even six percent likely won't be enough You'll be at least at seven or eight Percent at the minimum power will have To crash the market but it's not just The super core inflation disaster that Happened the BLS has also redefined the Way they calculate the CPI inflation as A whole so not only is the Federal Reserve cherry picking the metrics to Measure right but the BLS has also Changed the way how they calculate CPI Which is just as bad and if you didn't Know by now the BLS or the Bureau of Labor Statistics regularly tweaks the CPI in order to make it more Dynamic Right but they have made three Significant changes that we need to Cover now the first is reducing the Weightage for food and energy prices and This means if food and energy prices go Up they will register Less on the CPI Now the second is how shelter will have A heavier influence going up 1.4 percent In weightage so the first two changes Might rebalance each other but I still Believe that food and energy prices Should be increased in the headline CPI And not decrease but what do I know Right I'm not an economist with an Ivy League degree but it's the third change That is pretty serious guys the BLS is Now basing the CPI on 12 months worth of
Data instead of the previous 24 months And this is going to change the game now The issue with changing the time frame Is that they're going to squeeze the Numbers so that it fits the narrative And which narrative is that the Narrative that the Federal Reserve is Winning the inflation fight and if we Refer back to the CPI chart we can see That back 24 months ago in January 2021 Inflation was only 1.4 percent so the CPI today prints a higher number because We are comparing it to the data two Years back when inflation was still Quite low but all this is going to Change when the BLS bases the CPI on Just 12 months worth of data because Inflation was already soaring in 2022 Hitting a high of 9 point one percent in June guys we are going to see faster Disinflation towards the middle and end Of 2023 and this means the rate of Inflation is going to calm down relative To 12 months back and the Federal Reserve might just declare Victory I'm Trying to get us to project into the Future of what's going to happen what's Coming and we need to seriously Understand what the FED is trying to do They are still trying to maneuver the Plane towards the soft Landing but we're Already missing an engine and a wing Right power wants to let the world see That inflation is under control and
There's nothing to worry about which we Know is total nonsense and let's realize That the Federal Reserve has lost Control of the situation the plane is on Fire it's burning they are trapped to The point of redefining inflation Remember that the fat is a dual Mandate Of stable prices and maximum employment And as we know the unemployment rate is Still at record lows and January Payrolls increased by incredible 517 000 jobs and this tells the Federal Reserve that the economy is still strong And inflation is still a big problem but On the other hand the FED is afraid of Hiking rates or else they would have High grades by a full percentage point At every single meeting right not 25 Points not 50 points but 100 points now In fact according to the CME fed Watch 2 Over 70 of the market is expecting the FED to only raise interest rates by 25 Basis points they believe Jerome power Will chicken out and when you have the BLS changing their inflation Calculations and a Federal Reserve Talking about super core inflation it Looks like they have an Escape Route Planned out now the FED wants the Best Of Both Worlds if inflation runs hard And unemployment is still down they can Always use the headline CPI as an excuse To keep hiking right and if unemployment Suddenly spikes they could always refer
To Super coil inflation to stop their Rate hikes and start easing they are Trying to engineer a soft Landing by Mixing up the numbers and doing mambo Jumbo to the statistics so this is the Problem with manufacturing a new CPI or The new super core inflation that prints A lower number the majority of the Market follows the fed and this will Affect people's buying decisions for Example if inflation was rate hot at 10 This will freak everyone out and we'll See Mass holding of food and Essentials And this will cause the inflation to Spiral out of control even more and that Could cause the Federal Reserve to hike Even more aggressively so if the CPI can Be redefined lower to say two or three Percent the effect can keep people calm Without the need to hike rates to the Moon right and this will also keep born Use artificially low because if Inflation is now redefined as three Percent born use can comfortably drop Down below two percent or below right Now on the surface the economy will keep Chugging along but in reality inflation On the street could be a six or seven Percent and this is what I want us to be Aware of and start to prepare especially If the market collapses and everyone Starts to freak out you need to buy hard Assets at a discount and hold them for The year years and decades to come I'm
Talking about real estate that is number One goal and land as well because Inflation is not going to go away and a Smart move long term is to buy valuable Assets that can't be printed from thin Air yes be the evil landlord if you can Or at the very least protect your Purchasing power right inflation is Really big into the entire system guys And we better treat cash the cash that We have as simply a medium of exchange And not a store of value there are so Many unknowns in the market right now we Have Russia on the verge of doing Another massive oil production card that Will just push energy inflation higher And the Ukraine war isn't ending guys Biden is still funneling billions of Dollars to help fight the Russians right So the entire climate is still highly Inflationary and that's why whenever I See an inflation figure I always double It at a minimum to get the true rate of Inflation and I think we need to watch Fabrics inflation numbers very carefully Because the Federal Reserve might be on A virtual giving us a very big rate high It will shock the market and power as Clearly mentioned we are going to react To the data so if we continue to get for Example strong labor market reports or Higher inflation reports it may well be The case that we have to do more and Raise rates more than has been priced in
And what did we have in January guys a Fantastic jobs report of more than half A million and CPI coming in really hard At still 6.4 percent with co-inflation Rising Higher by half a percent and this Isn't good news and if February's data Is strong we could see a 0.5 percent Increase and not just 25 basis points Now I'm still sticking to my forecast of Five percent interest rates at a bare Minimum with an upper limit of six Percent or even 6.5 percent and we are Going to stay there for quite some time Until either the economy crashes or Inflation comes down and does that mean That the markets will crash I don't know For sure but I'm still in a bearish camp Now I believe the sudden reversal of the SMP sparking up the 4 4200 is likely Just a bad Market rally right it's a Dead cat Bounce That Could reverse if The Federal Reserve keeps hiking rates And we must also realize that the FED Now has a new metric super core Inflation right to look at if the Economy crashes they need that excuse to Swiftly ease reverse everything and Power money back into the system so this Recession might be a shadow one or even If it's a hard Landing the recovery Might be faster than we expect if power Looks at the new measures of inflation You can use them as justification to Drop rates and stimulate the economy
Once again yes we could indeed reach the Promised land of two percent inflation They just need to redefine it but let me Know what you think do you believe the CPI numbers let me know in the comments Below stay safe be sure to smash that Like button and subscribe as we navigate Through these insane times
