Inflation Watch – Commodity Prices Continue To Rise

Unleash Prosperity Hotline
Issue #380
09/30/2021
1) Inflation Watch – Commodity Prices Continue To Rise

Is Fed Chairman Jerome Powell going to stick with his story of “transitory inflation?”

The interest rate on the 10-year Treasuries have nudged up in recent days (to 1.54%), which is still historically very low, but the direction suggests inflation fears.

Our favorite measure of inflation is the direction of commodity prices. The CRB index is a composite measure of more than 20 commodity prices, including everything from corn to copper to coal. Since Biden’s election, these prices have spiked by 58% with a big surge in recent weeks. Some of this rise is a welcome rebound from the deflationary slump in commodity prices last year. As the economy has picked up so has demand for industrial commodities. But commodities are today roughly 20% higher than BEFORE COVID hit and are higher than at any time in at least seven years.

That doesn’t look so transitory to us.

What the chart is shouting out is that Jerome Powell did no favors to Donald Trump last year. The economy went through a severe deflation which only further depressed economic activity and hit rock bottom on election day. Since then, prices have rapidly accelerated. Is this a mere coincidence?

2) Pelosi Veers Further To The Left (If That’s Possible)

Speaker Nancy Pelosi has assured her caucus that she will be an “honest broker” in smoothing over differences between progressives and moderates over the $5 trillion Biden Budget Buster.

But yesterday she went slightly berserk and gave a tongue-lashing to half a dozen moderates who were privately threatening to tank a measure to hike the debt limit.

For good measure, Pelosi also fumed at Senate moderates for “completely” disrupting the Democrats’ legislative steamroller.

Moderate members watched her sacrifice dozens of members in order to push through a doomed climate change plan through the House in 2009 only to see it die in the Senate. Now she’s asking the moderates in swing districts where Bidenomics is decisively unpopular to take the Bataan Death March for the team. 

Do they care more about loyalty to Nancy than their own political self-survival? We will find out in the weeks ahead.

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