Evidence is mounting, but it's sticking with its phony numbers
Core personal consumption expenditures (PCE) finally hitting 2% is more proof that common measures of consumption goods inflation follow interest rates higher.
As the U.S. Federal Reserve continues to rubber-stamp the tightening money markets by announcing increases in the Fed Funds target rate, the consumer price index (CPI) and PCE will continue to ratchet higher.
The Wall Street Journal looked at it this way: “A key measure of inflation accelerated last month to the fastest annual clip since 2012, as robust spending by consumers and businesses steadily pushed up prices for goods and services across the economy.”
News Corp.'s Dow Jones sister ship, the more liberal free daily, Marketwatch, put it this way: “The strong economy has pushed a key inflation barometer to a six-year high and all but assured that U.S. interest rates will soon rise.”
The media in general took the attitude of, “Wow, look at that. The Fed hit its inflation target, and it will keep raising interest rates.”
Good grief. This isn't news. We've known all along that inflation has always been above 2% – if measured honestly.
Here's another thing we already know: As the Fed raises their interest rates, so too does borrowing, spending, and inflation follows. One merely has to look back to the 1970's inflation crisis to see this.
Even if the Fed's pigheadedness continue there are a variety of tried-and-true ways to protect or even grow your wealth.
