Here Comes the Stagflation Crisis

As if to synopsize in a few short words our alert that a new stagflation crisis has arrived at our doorstep, here is the big, bright, bold, red Drudge Report headline that appeared on Friday, April 10th:

The “inflation surges” headline linked to a New York Times story that detailed the price of fuel oil jumped 30.7 percent from February to March, while gasoline rose 21.2 percent in the same period. Diesel fuel was up 30.8 percent. Too bad for farmers with heavy equipment. Too bad for truckers. None of this is a big surprise.

But the confusion at work in Washington was apparent elsewhere in the story. It cited White House spokesman Kush Desai, who said, “As the administration ensures the free flow of energy through the Strait of Hormuz, the American economy remains on a solid trajectory.”

But as the weekend progressed, the President announced a total blockade of the Strait beginning on Monday (3/13), with the U.S. Navy intercepting any ships that pay Iran for safe passage. We’ll see your blockade, and raise you a blockade.

Back to the drawing board for Mr. Desai.

The “consumer sentiment” part of the headline linked to CNBC which reported that consumer confidence plunged to a record low in April, coinciding with a sharp spike in inflation expectations. And when it said consumer sentiment was at a record low in the University of Michigan’s widely-followed report, it meant a record all-time low.

It is a pattern that is familiar to us. The economy is slumping. Private credit is being squeezed, with major private credit funds like Apollo, BlackRock, and Morgan Stanley turning away clients who want to withdraw funds.

Past is prologue. The Fed was created to serve the interest of the major banking institutions. It will do so again, printing money to bail them out, with no regard for the rest of us. That is why you will be very glad you own gold. If you do own gold. If not, my expert staff at RME can guide you through the entire process.