BUT LOOK AT NASDAQ A GAIN OF 66.
♪.
LARRY: HELLO, FOLKS, WELCOME TO
"KUDLOW," I’M LARRY KUDLOW.
BEFORE WE GO BALLOONING AGAIN
TONIGHT WE’LL BE SPEAKING WITH
SENATOR TOM COTTON IN JUST A
MOMENT, A FEW WORDS ABOUT
TODAY’S HOTTER THAN EXPECTED
CONSUMER PRICE INDEX.
WASN’T A DISASTER BUT WASN’T SO
GREAT EITHER.
BASICALLY THE FEDERAL RESERVE IS
STILL A ONE-MAN BAND GETTING NO
HELP FROM JOE BIDEN’S
INFLATIONARY FISCAL POLICY BUT
THE CENTRAL BANK IS MAKING
PROGRESS.
TODAY’S TOP LINE NUMBER WAS
6.4 PERCENT, EXCLUDING FOOD AND
ENERGY THE CORE WAS 5.6.
ONE REASON I HATE THE CORE RATE
STUFF OR OTHER SLICING AND
DICING THAT HAS BECOME A
WALL STREET OBSESSION IS FIRST
UP FOOD AND ENERGY ARE CRUCIAL
TO FAMILIES, AND SECOND THE TOP
LINE NUMBER REALLY TELLS YOU
WHETHER YOUR PURCHASING POWER,
YOUR STANDARD OF LIVING IS DOING
BETTER OR WORSE.
THE ANSWER IS REGRETTABLY STILL
WORSE BUT AT LEAST WE’VE COME
DOWN QUITE A BIT FROM THE 9%
PLUS READ FROGS A YEAR AGO
HOWEVER BEAR IN MIND CONSUMER
PRICES HAVE INCREASED 14% SINCE
JANUARY 2021 WHEN JOE BIDEN TOOK
OFFICE.
THAT’S ANOTHER WAY OF SAYING
THAT THE DOLLARS IN YOUR WALLETS
AND PURSES ARE WORTH 14% LESS
THAN TWO YEARS AGO.
BUT I WILL WARN FOOD PRICES ARE
UP 10.1% OVER THE PAST YEAR AND
THAT INCLUDE GROCERIES AT HOME
UP 11.3%.
THAT IS NASTY NUMBER.
FRANKLY IT HAS NOT IMPROVED MUCH
AT ALL DESPITE ALL OF THE FED’S
TIGHTENING MOVES.
THAT IS A VERY KEY ISSUE FOR
MIDDLE INCOME WORKING FOLKS, FOR
LOWER INCOME PEOPLE.
ALSO WORTH NOTING, REAL WAGES
DROPPED BY 1.8% YEAR ON YEAR,
ANOTHER MEASURE OF DECLINING
LIVING STANDARDS.
THOSE REAL WAGES HAVE BEEN
FALLING THE BETTER PART OF THE
PAST TWO YEARS.
THIS ALWAYS BEEN THE SOFT
UNDERBELLY OF THE BIDEN ECONOMY.
IT IS THE REASON WHY PEOPLE
THINK THEY’RE WORSE OFF THAN
THEY WERE TWO YEARS AGO OR A
YEAR AGO.
WHY THEY HAVE LITTLE OR NO
CONFIDENCE IN THE PRESIDENT. I WILL DO MY ONCE IN A YEAR
I WILL DO MY ONCE IN A YEAR
REFERENCE TO JOHN MAYNARD
KEYNES, INFLATION IS THE
CRUELEST TAX OF ALL.
INSIDE THIS STORY THERE IS SOME
GOOD NEWS.
INFLATION RATE HAS EASED.
I MENTIONED IT EARLIER.
THERE ARE OTHER FACTORS WHICH
LOOK TO BE COUNTER INFLATIONARY.
NAMELY THE CRB COMMODITY INDEX,
IT HAS BEEN FLAT FOR THE LAST
SIX MONTHS.
THAT IS AFTER DROPPING
SIGNIFICANTLY THIS PAST SPRING.
THAT IS A GOOD SIGN FOR LOWER
FUTURE INFLATION.
IT ALSO SUGGESTS THE COMMODITY
VALUE OF THE DOLLAR IS STEADILY
STABLIZING AND IMPROVING AND
THAT’S A GOOD THING THIS IS WHAT
HAPPENS AFTER THE FED STARTS
RAISING THE TARGET RATE FROM
ZERO TO 4.57%.
I RECKON THEY WILL TAKE IT UP
SEVERAL MORE NOTCHES.
MORE CONTROVERSIALLY, THE BROAD
M2 MONEY SUPPLY HAS BEEN
PLUNGING IN THE PAST YEAR AFTER
SKYROCKETING BEFORE THEN.
AND THEN THE TOUGHEST NUT TO
CRACK IS THE DEEPLY INVERTED
YIELD CURVE, WHERE THE THREE
MONTH TREASURY BILL RATE IS
ALMOST 4.80.
AND 10-YEAR BOND, 3.75.
IN OTHER WORDS THE MARKET IS
STANDING ON ITS HEAD.
SHORT RATES HIGHER THAN LONG
RATES.
IT IS A LEADING INDICATOR OF
LOWER INFLATION.
IT IS ALSO A LEADING INDICATOR
OF RECESSION.
LAST EVENING FORMER FED GOVERNOR
AND RONALD REAGAN APPOINTEE
ROBERT HELLER SUGGESTED THE
FED’S TARGET RATE WOULD GO UP TO
6% AND HE PREDICTED A DOUBLE-DIP
RECESSION.
THE FIRST DIP WAS FIRST HALF OF
LAST YEAR AND THE SECOND DIP
LOOKS TO BE THE SECOND HALF OF
LAST YEAR.
I’M REPORTING HERE, NOT
FORECASTING BUT BASICALLY I
THINK BOB HELLER IS LEADING US
IN THE RIGHT DIRECTION.
NOW HERE’S THE RUB, JUDGING FROM
BIDEN’S STATE OF THE UNION
MESSAGE, AND VIRTUALLY
EVERYTHING ELSE HE SAID BEFORE
THEN, EVERY PART OF HIS ECONOMIC
AGENDA IS INFLATIONARY.
MASSIVE CENTRAL PLANNING,
STIFLING OIL AND GAS, WAGING WAR
AGAINST BUSINESS, REGULATORY
CONTROL OF NEARLY EVERY PART OF
THE ECONOMY.
ACROSS THE BOARD PHALANX OF
HIGHER FIERCE AND TAXES.
WE’LL TALK ABOUT THE JUNK
ECONOMICS OF JUNK FEE POLITICS
LATER IN THE PROGRAM.
BASICALLY, MR. BIDEN WANTS
UNLIMITED WELFARE WITHOUT
WORKFARE AND WANTS HIGHER TAXES
ON SUCCESSFUL EARNERS,
ENTREPRENEURS, PRODUCERS AROUND
INVESTORS.
HE THINKS HE IS WAGING WAR
AGAINST RICH PEOPLE.
THAT IS BAD ENOUGH.
BUT HE IS ACTUALLY WAGING WAR
AGAINST JOBS AND WORKERS.
MR. BIDEN IS A BERNIE SANDERS
DEMOCRAT, AKA A BIG GOVERNMENT
SOCIALIST.
HE LIKES EMPLOYMENT.
HE JUST DOES NOT LIKE EMPLOYERS.
HE WANTS A GOVERNMENT-RUN
ECONOMY WHICH OVER TIME WILL
INCREASE DEMAND AND HE WANTS TO
STIFLE INNOVATION AND
PRODUCTIVITY WHICH OVER TIME
WILL HOLD DOWN PRODUCTION OF
GOODS AND SERVICES.
HE IS A SPENDER, HE IS A
BORROWER, HE IS THERE FOREAN
INFLATOR.
LIKE EVERYONE I’M GLAD TO SEE
THE INFLATION RATE COMING DOWN A
BIT, FRANKLY 6 1/2% INFLATION
WOULD BE UTTERLY UNHEARD OF TWO
YEARS AGO.
IF BIDEN GETS HIS WAY IT WON’T
LAST.
THAT IS THE PROBLEM WITH THIS
WHOLE STORY.
I WILL JUST CONCLUDE, SAVE
AMERICA, HOW ABOUT LIMITED
GOVERNMENT, LOWER TAXES, FEWER