There’s an end to every story it’s just that some of them are delayed. And so it is with the U.S. inflation story, it’s a tale with two [very] distinct parts. We’re living in the first part of the story as part II has yet to unfold. I predicted a few times on here and elsewhere that the terminal rate that will mark the end of this particular U.S. inflation cycle, [which began shortly after the inauguration of the Biden Crime Family], will not end where the Fed currently has rates set @ 5.5%. My prediction still stands that a 7.0% short term rate will be required eventually to quell inflation in this country. Has it become obvious to you as it has to me that after an aggressive tightening cycle by the Federal Reserve [which raised interest rates from 0% to 5.5%] and still not much has changed in the real economy? Let me answer that for you – yes, that is correct and if I may add to that a real recession never materialized either [yet]. Is this peculiar? It actually is when looking back on history. Usually an aggressive tightening program like that and something eventually goes bump in the night bringing down the entire economy but it hasn’t happened and I think I know the reason why. The Fed kept tons of liquidity sloshing around in the form of a GINORMOUS money supply and with all that money remaining in circulation is what will prove to be their undoing should they begin to ease rates.

Now what? Well, the Federal reserve is apparently signaling that it is prepared to begin cutting short-term rates and this could happen as early as their September meeting? That’s the [official] word from pundits that watch these sort of things. Rate cuts are generally positive for stock prices [so hurrah for that] but rate cuts are not the medicine to reduce inflation, it’s quite the opposite. There are reasons for the Federal Reserve to think that interest rate cuts are best to begin early versus waiting. First, they don’t want to appear as stupid as they were by being one-year late to begin raising rates, plus our Federal Reserve is full of Devilcrats. If you are not aware let me help you with something, all the major banks in this country, both deposit banks as well as investment banks, are run by Devilcrats, yes Liberal-ite Woke, DEI types. The same kind of folks that would want to support the Devilcrat ticket during the 2024 election. So I fully expect to see their “political wills” to play out in future rate decisions as long as they are in control of short-term interest rate policy.

I’m not against rate cuts in general I’m here to pose the argument that this tightening cycle is not yet complete as it was never really allowed to play out. Instead it was tweaked into this sort of “faux” tightening cycle, a cycle marked with Utopian style values. In other words, “we’ll raise rates just don’t mess with our GINORMOUS money supply floating around”. Get it? My U.S. Inflation 2.0 scenario begins the day the Fed cuts rates, should that come to fruition anytime soon, that’s when my “Part 2” will begin. [There’s a reason for this as I see things before they happen.] What do I see coming up? It’s not all negative, in fact, most of what I see is positive but there’s an element to economic growth which comes with the territory when the economy is booming and demand rises because when demand rises prices stay firm. There’s another aspect to consider in the recipe going forward. I’m referring to a movement which is gathering more and more support with each day that goes by – America’s newest industrial revolution is about to take off in the form of a “Re-Patriation of U.S. factories and U.S. jobs”. Add to all that infrastructure spending on steroids will be needed across the country to re-build our bridges, roadways, among other infrastructure. America has a ton of work to do in the interior of this country. All these new American factories housing American workers will converge to grow our economy on steroids for decades into the future! With the right leadership in Washington pushing conservative low tax, low regulation policies onto American business and this becomes a reality. However, interest rates will maintain a solid bid [higher for much longer] and you can take that to the bank! We will not see Liberal-loser style tepid 1.0% GDP growth where interest rates must hover near zero just so the economy can maintain a pulse. [A memory of the Obama-esque economies of old, no I see Socialist ideologies buried forever under my U.S. Inflation Part II].

The road to America’s Prosperity has come down to one goal – either grow organically or die!
There’s more to the story, the United States has been a net importer of goods for decades now, more years than most of us have been alive. I witnessed part of that change, a change that began probably around the time World War II ended [in the late 40’s]. America kicked Japan’s ass then turned right around and re-built it – aren’t we nice guys? 🙂 It wasn’t but a couple decades later that Japanese goods such as steel, steel pipe, and I want to say even tools and appliances were supplying the world’s needs and with higher quality. U.S. domestic manufacturers had a real problem on their hands – how to produce high quality goods while keeping the price competitive? To exacerbate the problem the same thing was happening in our auto industry [where we lost ground] so much so that by the late 1970’s buying American wasn’t not looking like such a good idea. All that must change going forward is my argument here but can we get our manufacturing prowess back? I believe we can because we must! But know this, the re-patriation of American factories and jobs will be, for a time anyway, inflationary [in general]. So do not be surprised during the American re-patriation of factories and jobs when interest rates do not decline or stay low [in the near term], as they won’t.