Hey guys, it's Sasha The U.S Economy right now is like a coiled spring. It's been wound up and at some point soon it's going to go Bonkers and the stock market is going to go bad a boom with it. But as per usual, as happens every single time, investors and commentators can't see the wood for the trees as happens every single time everyone is full of Doom and Gloom The worst possible outcomes are all 100 going to happen. The FED is going to keep raising interest rates, inflation is sticky, and not going away anywhere, blah blah blah.

The biggest crash ever is coming. You just wait for it. Better not invest Now, in fact, sell all of your stocks because panic because fear because constipated YouTube thumbnails. You know, the usual kind of dribble.

And just like every single time before, there will be a small minority out there who study the data, who look at the data, who make decisions with their brains based on the data instead of their emotions. And you can bet your bottom dollar that when the economy turns, the majority will very quickly go and tell the minority how incredibly lucky they were to just accidentally invest while they were all running around panicking and losing their in. June Private sector jobs in the US grew by 497 000. this is more than double the Wall Street analysts expectations which were at 220 000.

it is way more than the 267 000 jobs that were added in May and it is the 29th month in a row when new jobs were net positive. and you can see that after the big job when covet arrived, jobs in the US have rebounded and then some. And I know that some people read the news and think that while everyone's losing their jobs because you know, I read somewhere that Facebook had layoffs and Google had layoffs and Elon Musk the worst guy ever fired a bunch of people from Twitter How? Dairy But the truth is, the United States economy is bigger than Silicon Valley I Know it's really hard for some people to comprehend. You can see that big companies are not hiring right now, but there is is an explosion in good old-fashioned startups and small local businesses with a vast majority of all new jobs at the moment coming from companies with less than 50 employees.

I Think people are not quite tweaking on to what that means. The stock market looked at this data and started to dive this morning because according to the Tweed or dumbs that work on Wall Street good jobs data is bad. The US economy doing well is bad. This is a new mantra that every single dimwit economic commentator has somehow picked up in the last 12 months.

It's weird because they all just parrot the same the same sort of mathematically challenged numpty that you'd find working at the Federal Reserve setting interest rate policy According to this: Theory Good Jobs data. and the economy doing well is bad because it means that the FED will have to keep increasing rates because these factors are a sign that inflation is still a problem. Even if it isn't. If the economy is doing well, it means inflation might not continue going down even if if it is going down.

And so the FED might have to keep tightening and increasing rates even if there's absolutely no reason to do it. Of course, the problem with this horse theory is that it is actually a total load of horseshit, univariate analysis of the economy. That says good economy is bad and bad economy is good makes exactly zero sense. It is the sort of analysis that even a four-year-old wouldn't do if they had more than two brain cells, but apparently is good enough for financial analyst.

In fact, it is the Fed's job to ensure that employment stays strong. It is one of the two objectives that they are literally responsible for. It's their job. but the problem with the FED is that they don't understand data or what their job actually is.

They don't understand how to analyze Trends and it sounds very odd when a random guy in YouTube says all this and I'm sure some people will point out in the comments who the is this guy I am not an old guy in a suit and you know I'm sitting in an office with Ikea furniture and I don't have an army of overpaid analysts crunching numbers for me Sue me. But for some weird reason, when I look at data and actually you know, analyze it and look at the trends, you begin seeing things that are going to happen before they happen. Oh my. God Who could possibly think that up? Just like it was obvious back in 2021 that inflation is a massive problem and is 100 not transitory not going away all by itself.

For the first time in history, it was also obvious for quite a while now that inflation in the US is on the way down, and in the last two sets of increases and the pause that the FED just did, those were completely unwarranted. The comments about increasing further are even more unwarranted. Aside from looking at the trends, it also pays to look at the more relevant, up-to-date data. Trueflation is a website that aims to more accurately measure the price of goods and services in real time using actual data instead of whatever outdated methodologies the FED uses for their stuff.

They take all the latest available data, produce a very rigorous measure of real inflation that gives a much more accurate and up-to-date picture of what people are actually experiencing, what people are actually paying out there. And this index we're sitting at around 11 to 12 12 months ago, so it was above the real rate of inflation according to the official data from the BLS, but it has now come all the way down to 2.3 percent, which is a heck of a lot lower than the official rate of four percent. In fact, Trueflation collapsed by almost 50 percent. It's almost halved in just the month of June alone.

So it is a very good likelihood that official inflation data is going to continue going down sharply. When we see June data next week last month, the analysts were surprised when inflation fell from 4.9 to 4 in one month. Nobody could have seen that one coming. And when we see the data next week, Wall Street is again going to be very surprised because nobody could have predicted this one.

In fact, if it wasn't for Shelter, the part of the index that makes up about one third of the index that is massively lagging real prices that is sitting about eight percent will continue selling eight percent the price of mortgages and rent. That's what Shelter is CPI would already pretty much be bang on that two percent. Target And when the data comes out next week, Shelter will be stubborn. It will be sitting there at eight percent.

I Mean, oh my goodness. Who could have seen that one holding the rest of the index up because it is a lagging indicator And once again, all the idiots will say like, but inflation is still way too high and so sticky. You know, Core inflation? Look, it's not going down because core inflation is almost entirely predicted by one factor: Shelter, the lagging indicator that is stubbornly sitting at eight percent, even though all the factors that play into it have been going down for months already. In fact, yesterday the FED published the minutes of their last meeting at the end of June In discussing the policy Outlook All participants continue to anticipate that, with inflation still well above the committee's three percent goal and the labor market remaining very tight, maintaining a restrictive stance from monetary policy would be appropriate to achieve the committee's objective gives almost all participants noted in their economic projections that they judge that additional increases in the Target Federal Funds rate during 2023 would be appropriate.

So they're basically saying they will have to keep increasing rates. but they also said in addition, members agree that the committee will continue to reduce the Federal Reserve's holding of Treasury Securities and agency debt and agency mortgage-backed Securities as described in its previously announced plans. So although they didn't increase interest rates, which is what everyone's paying attention to, they are still reducing the balance sheet, which is part of the monetary tightening policy, so they're not doing the thing that everyone cares about. They're still doing the other thing though, which has the same effect.

and they are saying that they plan on increasing rates at the July meeting and later on this year. In fact, Laurie Logan is the president of the Dallas Federal Reserve and is a voting member on the Federal Open Market Committee. She is one of the people who gets to decide on the interest rate and she just came out just now and said today a that she thinks the FED has to increase rates at their meeting later in July, you couldn't make it up. She said there is scant evidence that inflationary pressures are easing as needed, which is perfectly understandable because Laurie has never actually worked a day of her life anywhere other than the Federal Reserve.

So she actually has no idea whatsoever how actual people who work in business or in finance who don't work for the FED look at data and how they analyze data. This is a real problem. The next inflation data comes out on July 12th and the consensus is already dipping to 3.5 to 3.6 percent. This, despite the fact that shelter will be holding the entire index up artificially.

So, what exactly is the Fed going to do at the end of the month? If inflation does come in at 3.5 to 3.6 or anything in that range, the interest rate is at 5.25 All key inflation measures have bottom end. They're all on the way down. even Energy Trueflations measure of food inflation is below two percent, Transport is negative. Utilities are crashing down at the moment below four percent already and will keep crashing because they're still tracking way behind Commodity prices.

housing costs, and true relation data are a 3.7 in the CPI. It's up at 8 because the data is lagging. What exactly is the Fed going to do? Is the Fed going to increase rates from 5.25 to 5.5 percent if inflation comes in at 3.5 percent? Because if they do I think I'm not going to be the only one asking the question Why? Because it will become ludicrous and the FED will not have a good answer, They will not have an answer that will stick in any way. And I think at some point there has to be a Breaking Point a breaking point where the idiots sitting in that committee are actually held accountable for being full of because while they are raising rates, their Banker friends are making record profits while the average household at the same time is drowning in debt to pay for food, shopping, and energy bills that are going through the roof.

And every increase in interest rates is making it harder for regular hard-working people to make ends meet. Sure, sometimes you need to increase rates to manage the economy to do the things, but when you don't actually need to do them, when you do do them, you are people over for no reason. Because the performance of the US economy is not the same thing as how people and low wages experience inflation and how they manage their finances. The performance of the economy is not the same thing as the performance of the stock market.

These are all entirely separate things. They do have relationships that do have some correlation, but they operate in very different ways. And I Don't think the FED actually understands or appreciates that their actions mean that millions of kids across the United States will have to go and skip a meal. That the single mom working two jobs already will have to go hungry so that she can pay the electricity bill and feed her kids a meal after school.

It is evident the Federal Reserve does not understand how to do their job. It is evident based on hard data of how they manage this inflation. Spike This goes beyond just being incompetent because the data has been staring right at their smug faces the entire time, but they just choose to ignore the data because the data is saying something very different. While the stock market is sitting around scared of the FED raising rates, inflation has actually fallen from 9.1 percent in June last year to four percent in May and is looking like a default Even further.

when we get the new data next week I Know it's incredible how this looks when you zoom a little out while everyone is pissing themselves at the prospect of the FED raising rate, the U.S economy is actually booming and record numbers of new jobs are adding. every month, wages are growing below inflation, which has been a crucial factor of inflation coming down so fast. We're not seeing the GDP growth yet, but all the factors that eventually multiply through to get the GDP growth are there. Small businesses are getting by.

Their Banks is the cost of lending has exploded after the FED height rates to 5.25 But the data that we have suggests that the US businesses are so resilient that despite being so hard, small businesses are actively growing and working double time to put the covert downturn troubles behind them. Everyone is listening to every word the Jerome Powell says, as if it's some kind of gospel. Everyone is reading these minutes of the FED committee meeting, putting every word under the microscope to try to understand what might they be thinking. You know precisely what is the meaning of this word over here.

The truth is, it doesn't matter what they're thinking, there is a small chance that they are dumb enough to put rates up at the meeting in July. You know it might happen because they're literally saying that they're gonna do that a few days before, but we've heard that before as well. It would be absurd. But there is a chance because the FED has proven Beyond Any doubt that they don't understand what the it is that they're doing, but the rates are already significantly higher than inflation.

If we take the the official inflation figure of four percent, the rates are already 30 percent higher. If inflation dips to 3.5 next week, the interest rate will be 50 percent higher before the increase. If you use the true flation number, then the interest rates are already double the rate of inflation. Eventually, the show with the FED will have to end because the FED will not be able to justify their verbal diarrhea in any possible way.

They did a u-turn in November 2021 after saying that inflation is transitory. they were giving speeches that were in front of the Senate saying it will go away all by itself for the first time in history when it was clearly not the case and it was blazingly obvious that they will have to start increasing rates and they should have started increasing rates a year earlier. and they will do a U-turn just the same in the next few weeks and start saying the exact opposite of what they're saying right now and pretend that was always their policy. Pretend they were always on top of it, pretend that was always what they were going to do and you bet every everybody is going to be so so surprised you just watched the stock market and what is going to think manifest starts reducing race later this year after shouting from the rooftops about the need to keep raising rates just a few days ago and this morning in July many attack stocks and growth companies continue to be down massively since the market began falling in January 2022.

Sure, there is an AI hyperbubble which is sort of obscuring a lot of this. A lot of the big companies have exploded in the first six months because of AI for no particular reason, but aside from that, the market overall is still in the doldrums. If you ignore that handful of companies, the average is still significantly down. While the data at the same time is saying that we are coming out of the inflation.

Spike With the economy in top shape for kicking ass on the way out, the FED is driving the car while staring at the rear view mirror. By the time they see the turn they wanted to take, they they've already gone way past the off ramp. The economy, though, is driving like a seasoned racing driver. We've seen the big slowdown as the economy was going through a tight hairpin turn and at times it felt dicey.

but there Comes A Time in every turn when you slam the accelerator as you're coming out of the corner, and this is where there is a big difference between a seasoned racing driver and a casual amateur. The racing driver will have their foot in the pedal way way earlier coming out of the corner because of their experience because they've turned that corner a few times before and everyone else can sit around playing with their private parts along with the FED waiting to see the data in the rear view mirror before doing anything. because that is the safe and sound strategy. Why look at the data and buy stocks when they're cheap? When you can ignore the data and wait for the stocks to hit all-time highs instead, right?.