BUT THEY DID NOT RESPOND TO ANY
OF THAT INSTEAD JUST TELLING ME
THE TWEETS HE SENT OUT LAST
WEEK STAND.
NEIL: THANK YOU FOR THAT,
HILLARY VAUGHAN.
LARRY KUDLOW, THE HOST OF THE
KUDLOW SHOW, ADVISOR TO DONALD
TRUMP.
OBVIOUSLY EVERY TIME WE LOOK AT
INFLATIONARY NUMBERS A LOT
POLITICIANS SAY WHAT CAN WE DO
ABOUT IT?
IT IS ONE THING TO TALK ABOUT
LOWERING PRETRIP AND DRUG COSTS
OR USING THE FULL WEIGHT OF THE
GOVERNMENT TO FORCE THAT.
WHAT DO YOU THINK OF THAT
APPROACH?
>> THE WHOLE BILL IS A TERRIBLE
IDEA.
WHAT IS IN THAT BILL, YOU HAVE
FROM WHAT I GATHER AT LEAST $1
TRILLION OF SOCIAL SPENDING AND
$1 TRILLION TAX HIKE TO PAY FOR
IT.
THE SPENDING IS INFLATIONARY
AND THE TAX HIKE WILL BURY THE
ECONOMY INTO A DEEPER
RECESSION.
THE COMBINATION IS LETHAL.
I HOPE MITCH MCCONNELL STAY
STUFF AND TANKS TOUGH.
THIS WHOLE THING IS A TERRIBLE
IDEA.
NEIL: I WILL PUT YOU DOWN AS A
MAYBE ON IT.
A NUMBER OF ADMINISTRATION
OFFICIALS SEEM TO THINK WE ARE
DOING ALL WE CAN BUT TO MAN AND
WOMAN, THEY SEEM TO BE HOPING
IT TAKES CARE OF ITSELF AS WE
WERE SEEING PRIOR TO TODAY, THE
RUN DOWN IN INTEREST RATES,
MARKET RATES, ENERGY PRICES,
GAS PRICES, OIL PRICES EVEN
THOUGH WE ARE UP ONE HUNDRED $3
A BARREL, THEY WILL POINT TO
THE FACT THAT $128 A BARREL
JUST A COUPLE MONTHS AGO, THEY
THINK THE EFFECT OF HIGHER
PRICES HAS BEEN LOWER PRICES,
SAPPED DEMAND AND THAT IS DOING
THE TRICK.
WHAT DO YOU THINK?
>> I DON’T THINK THOSE WISHES
ARE GOING TO PAN OUT.
INFLATION IS PROBABLY EVEN
WORSE.
WHEN YOU LOOK AT INFLATION OF
NONDURABLE GOODS, RISING AT A
DOUBLE DIGIT WEIGHT, DURABLE
GOODS RISING AT LOWER BUT DOUBLE DIGIT RATE.
DOUBLE DIGIT RATE.
INFLATION IS VERY STICKY.
INFLATION EXPECTATIONS ARE
BECOMING EMBEDDED.
YOU SEE IT IN THE LABOR MARKET.
YOU SEE IT IN CONSUMER SURVEYS,
CONFIDENCE BOARD, MICHIGAN AND
SO FORTH.
IT IS GOING TO BE A TOUGH
BATTLE.
THERE IS NO EASY WAY OUT.
TWO POINTS.
IN THE COMMODITY MARKETS IT
LOOKS LIKE WE HAVE SEEN A PEAK,
OKAY?
I DON’T THINK IT IS CRASHING
DOWN BUT WE HAVE SEEN A PEAK.
WON’T FILTER THROUGH IN THE
PPI, FOR ABOUT A YEAR.
IT IS A GOOD SIGNAL THAT THE
FED HAS HAD A GOOD START AND I
DO BELIEVE THE FED WILL GO 75
IN JULY AND 75 IN SEPTEMBER.
NEIL: ANOTHER 75 IN SEPTEMBER
ON TOP OF THAT?
>> YES.
YOU’VE GOT TO GET AT A MINIMUM
YOU’VE GOT TO GET THE POLICY
RATE ABOVE THE INFLATION RATE
AND I DON’T THINK IF THE FED IS
WATCHING THIS PCE THE WHICH IS
RUNNING 6%, THE CORE IS 5 AND
ONE QUARTER OF ONE%.
IN THEORY YOU WOULD WANT TO GET
THE RATE ABOVE 5% TO 6% SO THEY
HAVE A LOT OF WORK TO DO.
MAY I MAKE ONE POINT?
IN THE WORLD OIL MARKET I THINK
THE BIGGEST CHANGE IS THAT
RUSSIA IS NOW PRODUCING AT
PREWAR LEVELS AGAIN.
RUSSIA WAS MOVING 10 MILLION
BARRELS A DAY PREWAR.
THEN, WHEN THE SANCTIONS CAME
IN AND EVERYBODY PULLED BACK IT
DROPPED TO 9 MILLION BARRELS A
DAY.
THAT IS A BIG DROP.
THAT DROVE UP PRICES.
LOOK, INDIA AND CHINA WHO
VIOLATED THE SANCTIONS ARE
BUYING RUSSIAN OIL SO RUSSIAN
OIL PRODUCTION IS BACK UP TO 10
MILLION BARRELS A DAY, MAYBE
SLIGHTLY MORE.
THAT HAS GIVEN SOME RELIEF TO
THE WORLD OIL MARKETS.
PRICES HAVE SLIPPED DOWN.
IT IS AN UNFORTUNATE STORY IN MY JUDGMENT BUT NONETHELESS
MY JUDGMENT BUT NONETHELESS
INDIA, HERE’S ONE FOR YOU,
INDIA WAS BUYING 70,000 BARRELS
A DAY FROM RUSSIA PREWAR.
70,000.
AS OF THE MIDDLE OF JUNE INDIA
HAD UP TO GET TO OVER A MILLION BARRELS A DAY PURCHASED FROM
BARRELS A DAY PURCHASED FROM
RUSSIA.
NEIL: CHINA PICKS UP THE SLACK
FOR THE BUSINESS RUSSIA IS
LOSING.
SPEAKING OF OIL, I’M LITTLE
MORE DETAIL FROM JOHN KIRBY AT
THE WHITE HOUSE OF THE
PRESIDENT’S PLANS WHEN HE GOES
TO SAUDI ARABIA, HE WILL MEET
WITH THE SAUDI KING, THAT WILL
INCLUDE ONE ON ONE WITH THE
CROWN PRINCE MOHAMMED BEEN
SALMON.
OIL IS NOT PART OF THIS
DISCUSSION, HE EXPECTS THE SAUDIS TO OPEN THE SPIGOT MORE.
SAUDIS TO OPEN THE SPIGOT MORE.
WHAT DO YOU THINK COMES OF IT?
>> THE BIDEN FOREIGN POLICY IS
SO ANTI-SAUDI, ANTI-ABRAHAM
ACCORDS, ANTI-ISRAEL AND STILL
TRYING TO MAKE A NUCLEAR DEAL
WITH IRAN, ONE OF THE CRAZIEST
THINGS I HAVE EVER SEEN.
THESE GULF STATES BY THE WAY
ARE PRODUCING CLOSE TO
CAPACITY, THERE MIGHT BE A
COUPLE HUNDRED THOUSAND BARRELS
AVAILABLE BUT I DON’T THINK YOU
WILL SEE SAUDI ARABIA DO MUCH
TO HELP PRESIDENT BIDEN.
YOU READ THE REPORTS.
SAUDI ARABIA IS WORKING WITH
ISRAELI INTELLIGENCE TO STEM
THE TERRORISM IN THE MIDDLE
EAST.
THE IRANI AND TERRORISM WHICH
IS THE PRINCIPAL SOURCE OF IT.
I DON’T KNOW FOR THE LIFE OF
ME.
ALMOST EVERY FOREIGN-POLICY
PERSON I KNOW IN BOTH PARTIES
DO NOT UNDERSTAND WHY THIS
ADMINISTRATION IS TALKING TO
IRAN ABOUT ANOTHER DEAL.
I DON’T GET IT.
I FIGURE IT IS THE WORST THING
IN THE WORLD.
THE POINT IS THE RELIEF IN THE
WORLD OIL MARKET COMING FROM
CHINA, FROM INDIA, THAT IS
LETTING, BASICALLY AT LEAST 1
MILLION BARRELS BACK ON THE
WORLD OIL MARKET, WHEN THAT
SUPPLY INCREASES, PRICES COME
DOWN.
WHETHER IT CONTINUES TO COMES
DOWN REMAINS TO BE SEEN BUT THE
BIDENS SHOULDN’T COUNT ON THAT.
GASOLINE IS A PARTICULAR
PROBLEM BECAUSE THE REFINERY
RUNNING AT 96% CAPACITY AND THE
ADMINISTRATION WILL NOT
PROVIDE, WILL NOT ALLOW ANY
PERMITS, FIRST OF ALL, TO DRILL
OR FRAK OR PIPELINE AND FOR
REFINING.
THE SUPREME COURT DECISION LAST
WEEK MAY WORK SOME MAGIC BUT IT
IS GOING TO TAKE A WHILE FOR IT
TO HIT.
WE ARE AT CAPACITY HERE BECAUSE
MR.
BIDEN HAS OPPOSED FOSSILS FROM
THE DAY HE WAS ELECTED AS
OPPOSED IT DURING THE CAMPAIGN.
GASOLINE WOULD EASE DOWN A WEE
BIT.
I DON’T THINK IT WILL COME DOWN
MUCH.
COULD POP BACK UP.
WE WILL SEE. NEIL: LET ME CIRCLE BACK TO
NEIL: LET ME CIRCLE BACK TO
THIS, ANNA THE PRESSURE USING A
LITTLE BIT, INCLUDING COPPER,
CORN, BORROWING OVERSTUFF.
THEY ARE DOWN 20% FROM THEIR
HIGHS AND I KNOW YOU SAID
SOMETHING WILL POP UP IN THE
PPI, PRODUCER PRICE INDEX,
INFLATION.
FROM YOUR DAYS IN THE WHITE
HOUSE, BACK WHEN YOU FOLLOWED
THIS STUFF ON WALL STREET, DID
YOU LOOK AT THAT AS A PREVIEW
OF COMING ATTRACTIONS UP OR
DOWN, THE GENERAL INFLATION
RATE AND I AM CURIOUS, DID WE
SEE A BREAK IN THOSE SAME
COMMODITY PRICES DURING AND
LATER WITH THE PAUL VOLCKER
INCREASES IN RATES AND THAT IS
WHERE IT STARTS?
IT IS STARTING NOW? >> I DO.
>> I DO.
A GREAT FRIEND AND BRILLIANT
GUY, GOVERNOR WAYNE ANGEL
REALLY TAUGHT ME ABOUT THE,
ODDITY PRICE RULE.
WHEN YOU LOOK AT THAT THERE ARE
A COUPLE IMPORTANT INDEXES, THE
CRV SPOT, CRV FUTURES,
BLOOMBERG, S&P, THEY ARE ALL
SHOWING THE SAME THING AND I
THINK YOU ARE RIGHT, DOWN 20%.
IN A COMMODITY PRICE WORLD,
THAT SUGGESTS THE VERY
BEGINNING, THE FED IS NOW ON
THE RIGHT TRACK.
WE ARE NOT SEEING COMMODITY
DEFLATION.
WE ARE SEEING IT IS COMING OFF
THE HIGHS BUT THE HIGHS ARE
PRETTY HIGH AND IF YOU TRACE
THE CHART IT SHOOTS WAY UP FROM
LATE 2022 A PEAK MAY BE A MONTH
AGO.
THE FED SHOULD BE GUIDED BY
THAT OKAY?
THEY ARE ON THE RIGHT TRACK.
THAT IS WHAT I THINK
COMMODITIES ARE TOUTING.
IT IS NOT SO MUCH THAT THEY
WILL FILTER INTO THE PPI BUT
THEY WILL AT SOME POINT LATER
ON.
IT IS A PRICE SIGNAL.
IT IS A PRICE SIGNAL THAT THE
DOLLAR IS GAINING STRENGTH
AGAINST REAL ASSETS AND
COMMODITIES.
IT IS A LOST ART.
YOU COVERED THIS.
WAYNE ANGEL, MANLY JOHNSON,
ROBERT HELLER.
I HAVE HAD HELLER ON OUR SHOW
AND THOSE GUYS WERE REAGAN
APPOINTEES WORKING WITH ALAN
GREENSPAN, ANOTHER REAGAN
APPOINTEE, THEY REALLY CREATED
THE BASIS FOR THE PRICE
STABILITY THAT LASTED I DON’T
KNOW, THREE DECADES PLUS AND
REMEMBER GREENSPAN USED TO GO
BEFORE CONGRESS AND TALK ABOUT
GOLD.
I LOVED THAT.
ALWAYS TITILLATED ME, SENT A
CHILL --
CHARLES: THEY
NEIL: I REMEMBER GREENSPAN
WOULD SAY IF YOU UNDERSTOOD MY