U.S. Consumer Prices Increased in March by Most Since 2012, But Core Inflation Still Only 1.6% YoY (Is Bitcoin The New Inflation Hedge?)

(Bloomberg) — U.S. consumer prices climbed in March by the most since 2012, adding to evidence of budding inflationary pressures as the economy reopens and demand strengthens.

The consumer price index increased 0.6% from the prior month after a 0.4% gain in February, according to Labor Department data Tuesday. A jump in the cost of gasoline accounted for almost half the overall March advance. The median estimate in a Bloomberg survey of economists called for a 0.5% rise.

Excluding volatile food and energy components, the so-called core CPI increased 0.3% from a month earlier, the most in seven months and reflecting rising rents and auto insurance.

CPI YoY rose 2.6% while CORE CPI YoY rose only 1.6%. Owners Equivalent Rent of Residences remains at 2% YoY.

Once again, lower and middle income households consumer larger proportions of food and energy in their budgets than high income households. Yet The Federal Reserves focuses on what impacts the higher-income households.

The Covid epidemic led to a slump in CORE inflation, but inflation has picked up since then. But not much.

It looks like Bitcoin is acting as an inflation hedge while gold has not.

If the Fed REALLY wanted inflation, all they have to do is revert to earlier methods of calculation. Then we would like to see a rush to gold and silver again.

Here is this AM reaction to the inflation report. Bitcoin surged overnight, but gold surged on the CPI report.

Random Length Lumber Futures are up 74% since Biden’s inauguration.

I wonder if steaks at Charles Mulligan’s Steak House have increased in price?

US GDP Q1 GDP Forecast To Be 6%! Time For Fed To Take Foot Off The Pedal? (Purchasing Power Of US Dollar Continues To Drop)

According to the Atlanta Fed GDPNow forecast model, US Q1 GDP is growing at 6.047%!

The Covid epidemic certainly resulted in a major hit to US GDP, particularly with state and local governments shutting down businesses. But GDP rebounded in the latter half of 2020 as state and local governments eased-back on the lock-downs. But US GDP has settled in at a whopping 6.047% for Q1 2021.

One of the reasons is the staggering growth in money stock (growing at 27.1% year-over-year as of February). The Federal Reserve figures for March will be released on April 27th. But the extreme money printing by The Federal Reserve has crushed the purchasing power of the US Dollar.

If the economy is growing at a hot rate, shouldn’t The Fed slow down its money printing?

Here is President Biden and Treasury Secretary Janet Yellen asking The Fed for more money.

Bitcoin Breaks $61,000 .. Then Retreats, VIX Volatility Index Crushed By Fed Money Printing

The Biden epic spending spree and The Federal Reserve’s epic money printing has resulted in a host of outcomes. First, cryptocurrency Bitcoin finally hit $61,000 today before backing-off.

The massive increase in The Fed’s money printing (M2) has stimulated stock market growth (S&P500) along with cryptocurrencies Bitcoin and Ethereum. The out-of-control money printing has essentially killed-off stock market volatility (VIX).

Biden and Powell are Natural Born (Volatility) Killers.

Why Is US Inflation So Low? Households Stashing Stimulus Checks In The Banks (Or Paying Down Debts)

There is a great fear about inflation in the US. And why it remains so low DESPITE the trillions in stimulus spending by the Biden Administration.

According to a survey by The New York Fed, consumers are expected to spend less than 25% of the latest stimulus checks. The checks are expected to be used to pay down debt and add to savings.

(Bloomberg) — U.S. consumers are socking away 42 cents of every dollar received from the third round of pandemic stimulus checks sent out in March, according to a new poll by the Federal Reserve Bank of New York.

Less than 25% of the funds are being spent and the remainder is being used to pay down debts, according to the New York Fed survey data, published Wednesday.

Eligible adults and children began receiving the $1,400 stimulus checks last month under the American Rescue Plan Act. Households surveyed received $3,162 on average, the New York Fed said. Respondents reported 13% of the funds were expected to be spent on essential items on average, and 8% on nonessential items.

Inflation is only 1.4% year-over-year.

The New York Fed’s Inflation Expectations Median 1 year ahead rate is 3.09%.

C’mon man!

Ethereum Skyrockets As Bitcoin Hits A Reflecting Barrier At $60,000 (Home Prices Growing Like Ethereum?)

The cryptocurrency Ethereum is skyrocketing as its competitor Bitcoin seems to be hitting a reflecting at $60,000.

Yes, Ethereum is skyrocketing, but so are home prices along with money growth.

Is housing the new cryptocurrency? Or are asset prices blowing out of control?

The Scream! Buffett Indicator Sky High Along With Home Prices As Money Printing Has Goes Wild!!

The Scream! Out-of-control money printing, dead money velocity and collapsing purchasing power of the dollar.

(Bloomberg) — With U.S. equity indexes rising to fresh records again this week, one of Warren Buffett’s most-famous catchphrases comes to mind: Investors should “be fearful when others are greedy.”

Any Buffett disciple who checks in on the billionaire investor’s favorite market valuation metric these days may get the urge to shriek in terror.

And then there are home prices at 38% higher than the peak during the 2005 housing bubble.

Here is what causing me to shriek in terror. Out-of-control money printing, dead money velocity and collapsing purchasing power of the dollar.

Home Price Growth Accelerates To 11.2% YoY As Fed Throws Gas On The Housing Bubble (Lumber Prices Have Over TRIPLED In 1 Year)

S&P/Case-Shiller released the monthly Home Price Indices for January (“January” is a 3 month average of November, December and January prices).

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 11.2% annual gain in January, up from 10.4% in the previous month. The 10-City Composite annual increase came in at 10.9%, up from 9.9% in the previous month. The 20-City Composite posted an 11.1% year-over-year gain, up from 10.2% in the previous month.

Phoenix, Seattle, and San Diego continued to report the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 15.8% year-over-year price increase, followed by Seattle with a 14.3% increase and San Diego with a 14.2% increase. All 20 cities reported higher price increases in the year ending January 2021 versus the year ending December 2020.

Las Vegas NV is the slowest growing city in terms of prices, but still at 8.5% YoY. Even tax-heavy Chicago posted an 8.9% YoY gain in prices.

Yes, The Federal Reserve is throwing gas on the housing bubble.

And lumber prices have over tripled in the last year.

And then there is FHFA purchase-only home price index growing at 12% YoY.

MML: US M1 Money Stock Growing At 357% Year-Over-Year With Velocity Of 1.22 (M2 Growing At 27.1% Year-Over-Year With Velocity Of 1.135)

MML stands for Modern Monetary Lunacy.

M1 money stock is growing at a whopping 357% year-over-year as M1 velocity has collapsed to an anemic 1.22.

M2, a broader measure of money, is growing at 27.1% year-over-year with a dismal velocity of 1.135.

Since velocity equals GDP divided by money, The Federal Reserve had better hope that GDP does increase with the trillions that the Biden Administration is throwing at the problem. But since higher taxes won’t be realized for at least a year, there will be even more money printing.

Biden and Yellen must feel that they are flush with cash like Jean Ralphio from Parks and Recreation.

Maybe Biden, Yellen and Powell watched Parks and Recreation and took it literally. Here is how Biden et al will spend all that stimulus money.

Biden’s Snake Juice?

Welcome To (Treasury) Thunderdome! Overnight Reverse Repo Facility Surges To $104.7 Billion As Investors Seek Shelter From Negative Rates

The Treasury markets are getting blasted like in Mel Gibson’s Mad Max Beyond Thunderdome.

(Bloomberg) — The popularity of one Federal Reserve overnight deposit facility has surged as investors look for shelter from negative rates in short-term markets, which are under unusual pressure over quarter-end thanks to the flood of cash in the system.

Usage of the overnight reverse repurchase facility surged to $104.7 billion on Tuesday, the most since last April, according to data from the New York Fed. It pays an overnight rate of 0% — well above the minus 0.05% available at Tuesday’s close in the general collateral market — helping to temporarily reduce the quantity of reserve balances in the banking system.

The overnight GC govt repo rate is negative.

Look at the yield on near-term Treasury bills.

And Treasury RETURNS are negative to boot.

And the 10Y-3M Treasury curve slope is zooming upwards. Welcome to another edition of Treasury Thunderdome!

Negative Treasury yields and returns abound. Powell and Yellen are the money blasters!!