Well, it’s finally happening!
Throughout 2023, I warned that inflation was not really disappearing from the financial system. Time and again I noted that the ONLY data in the inflation measure that had declined was energy prices.
This trend continues to this day, by the way. See for yourself.
Take out energy prices (and used cars) and the inflationary data is still RISING in every category.
And things are going to get worse soon.
Why?
Energy prices will soon no longer be DOWN year over year. For 12 months, the CPI has been calculated by comparing the prices in the blue rectangle to prices in the purple rectangle. However, in 2024, prices will be compared to the blue rectangle for inflation calculations.
We’ve now had two months of the CPI surprising to the upside. And this is while Energy prices are HELPING the inflation data. What happens when Energy is no longer down on a year over year basis?
Hint: gold has already figured it out. Other asset classes will soon.
