Consumer Prices Higher than Expected

We Ask: Higher Than Expected by Whom?

One headline blared:  “Inflation comes in hot!”  

We have been urging our clients and friends for several months to expect re-inflation.   Inflation never went away and now it just keeps climbing.  The January CPI is the fourth straight monthly increase and the seventh straight month over month increase from the prior year.  Both the “headline” CPI and “core” CPI were up.

This latest report is for January, and as Trump duly noted, reflects Biden numbers.  Bear in mind that they do not yet reflect higher prices from Trump’s China tariffs and others to come.

Producer price increases in January were hot as well, climbing to a level not seen in two years, giving us a peek at prices in the pipeline headed toward consumers.

While we’re at it, we should give you the equally bad – if not worse news – about our fiscal situation.

The fiscal year 2025 began on October 1, so we now have four months or one-third of the year under our belt.  During those four months, the deficit hit $840 billion.

In the same period, interest on the national debt was $392 billion; for the 12 months interest of the debt amounted to $1.167 trillion. In the month of January a year ago, Washington spent $500 billion.  Somehow spending shot up 29 percent this January to $642 billion! 

It is self-evident that this cannot go on.  We are not shocked, although we should be, at the way much of Washington is resisting the discovery by DOGE that the budget is stuffed with billions of dollars of illicit spending, with concealed cronyism bleeding the people dry.   

It is a sign that much of officialdom doesn’t care about the survival of the Republic.  They are too busy stealing everything they can get their hands on.  And their collaborators in the media portray the people who are catching the thievery in action as villains.

How does this end?  The Fed is powerless to control interest rates, which will continue to rise to reflect not just inflation, but the uncontrollable debt.  But there is always the printing press to devalue the dollar at an increasing rate.  

We’ve seen this drama before.  It has played out hundreds of times and in hundreds of places.  You can’t stop it, but you can protect yourself with the enduring money of the ages:  gold and silver.

As we like to say, they can’t print gold!