Inflation picking up. Wage pressures mounting.

I have been saying that wage pressures are mounting. The evidence is clear. In my MMT Trader report I have included this chart below.

This is the current. up-to-date, snapshot on Employment and Withholding Tax Deposits flowing to the Treasury. It is accelerating. This is an indication of mounting wage pressures and a significant tightening in the labor market.

Producer prices up 0.5% in today's report. Forecasts were for a 0.3% rise. Tomorrow, CPI and that will be a shocker, too.

Treasuries are a sale. Fed will resume rate hikes soon.

Dollar going down. Commodities, gold, stocks, emerging markets, all going up. That's where you want to be.

Dollar showing signs of weakness

The  dollar  is at a 3-week low against the Aussie and British Pound. It's at a one-month low against the Mexican peso.

This comes as speculation has been increasing about a Fed rate hike tomorrow. If so that would would be the first in nine years.

This dollar weakness could all be reversed if the Fed does raise rates, however, I  think that the rate hike (if it happens) is already well discounted and the whole thing could end up to be a "buy the rumor, sell the news" type of event.

On the other hand if the Fed doesn't raise then the dollar will almost certainly sell off further.

Bet against the fools when the Fed raises rates. It's a lock!

They were all wrong about monetary policy and in particular the rate cuts, ZIRP, QE, balance sheet expansion, everything. They had it all wrong. 

People like Schiff, Faber, Rogers, Reinhart & Rogoff, Bill Gross, Martin Feldstein, the GOP, Obama, and so many more. Quacks and elite quacks. Ideologues. Snake oil salesmen and snake oil saleswomen.

We were told that interest rates would spike, there was going to be hyperinflation, gold would soar to $5,000 an ounce or higher, the dollar would get crushed, yada, yada, yada.

Some are still saying it.

Now as we are on the verge of the first rate hike in seven years many of these same quacks and fools are warning of dire consequences. They're saying that the Fed has no room to "undo" what it did, that it will bring on dire consequences, that the bubble it created will blow up with a ferocity of the Bikini Atoll H-bomb test.

What do YOU think will happen?

I'll tell you what I think will happen. The exact opposite of what the aforementioned, "Gang of Clueless" think is going to happen.

Even if I didn't know a stick of economics (MMT economics), I would bet the ranch and do the opposite of whatever those idiots say just because they've been sooo wrong for so long on so many things. Now they're talking about the dire consequences of  the coming rate hike cycle.

Ha!

Wild horses couldn't keep me from betting against these fools even if I knew nothing.

Any good horse racing handicapper will tell you that you always bet on form. If a horse is prone to winning and if that horse is prone to winning even more consistently under certain conditions then you bet and you bet aggressively. But these horses are prone to BEING WRONG AND LOSING! So I will bet heavily against them.

That’s what I will be doing.

So...rate hikes? Yep...and stocks soar, dollar crashes, commodities finally get off the floor.

Why? 

Because it's the opposite of what we've been doing for the last eight years, which has been to cut rates, strip the economy of assets (central banks are doing this) and take income away from people. 

Sure, you're helping a few folks get cheaper credit, but they have to pay it back to the banks so the banks are the ones who earn and more importantly, lower rates set the price lower of many other things.

On the other hand, when the government starts issuing people checks--I don't care whether that's a Social Security check or a payment to a doctor via Medicare or INTEREST PAYMENTS--that's  money to keep and money to spend and that's a fiscal stimulus.

The past eight years have been deflationary. The idiots got it wrong. WE got it right. The next few years of rate hikes will start the boom cycle again. Buy stocks, buy commodities, short the dollar, short bonds, clean up make a fortune and invite me on your sailboat or yacht, but make sure it's somewhere warm where the water's nice and clear. 

Big miss on the jobs report

The jobs report was a huge miss at 124k. I predicted that it would exceed forecasts by a large amount based on employment tax deposit data from the Daily Treasury Statement. Those numbers were HUGE for March, but I guess for some reason it didn't correlate.

What I can say, however, is that the average hourly earnings increased at a pace twice as fast as the monthly increase over the past three years. So the DTS numbers at least picked that up. Remember: a rise in employment tax deposits can come from more people working, OR, people earning more money.

The only thing I can say is that the jobs report is based on surveys and that means it is a "guesstimate." I was working off hard data. The employment report is frequently revised and that may be the case for this one next month, who knows?

All I can say is that it was a big disappointment. Dollar back in downtrend now as expectations of early Fed rate hike recede.