from Forbes
NY Fed’s “Multivariate Core Trend” Inflation Measure Hits 3.0%, Worst in Over a Year, Predicts Acceleration of PCE Price Index
by Wolf Richter
Wolf Street
Driven largely by non-housing services. Just in time for the Fed meeting.
Back in April 2022, when the Fed’s favored inflation measure, the PCE price index, was surging towards its June 2022 high of 7.2% year-over-year, and core PCE to a high of 5.6%, the New York Fed came out with an inflation measure to track inflation’s “persistence.”
This “Multivariate Core Trend” (MCT) inflation measure is based on the some components of the PCE price index, but aggregates them differently. This MCT inflation rate, on a year-over-year basis, decelerated sooner than the core PCE and overall PCE inflation measures in 2022 and 2023, in effect successfully predicting their deceleration months in advance. And now it is predicting the resurgence of PCE inflation.
Stagflation is America’s Most ‘Optimistic Scenario’ at This Point, Former Fed President Says
Stagflation might be the best-case America can hope for amid Trump’s tariffs, former Fed president Bill Dudley said.
by Filip De Mott
AOL
Bill Dudley, former president of the New York Federal Reserve Bank, says only one question remains: how bad will the damage be?
Whereas a “Goldilocks economy” seemed alive and well at the start of this year, tariff policy has flipped the economic outlook in a matter of days.
Writing in a Bloomberg opinion piece, Dudley said he expects devastating consequences from the White House’s across-the-board tariffs. As dwindling demand derails US growth, 5% inflation is likely in the next six months, he said.
Here’s What Happens if the U.S. Dollar Collapses
from Nanalyze
Is the U.S. economy safe? That question has been posed quite often lately among our community of sensible investors. The fear of increasing tariffs is looming, causing investors to question whether their money is safe in a hyperinflation scenario. What happens if the dollar weakens? What will happen to the stock market? How can you protect your portfolio from inflation? We’ll explore these questions and more.
What happens if the US dollar completely implodes? Half our audience hails from America and this question keeps coming up more and more. That’s because when you start tinkering with the world’s most sophisticated economic system, bad things can happen. If the US dollar collapses, will your wealth collapse alongside of it? What does a weak dollar mean for your portfolio? Let’s start answering these questions with a look at how we measure the strength of the US dollar.
What Comes After the Dollar Dies? | Andrew Sleigh & Soar Financially
by Andrew Sleigh
Sprott Money
Andrew Sleigh of Sprott Money recently joined Kai Hoffmann on Soar Financially for a powerful and urgent conversation about unravelling the global monetary system. In this eye-opening episode, Andrew lays out the harsh realities of currency debasement, the silent erosion of purchasing power, and the accelerating push toward Central Bank Digital Currencies (CBDCs).
With clarity and conviction, Andrew explains why current economic policies are driving us toward what he describes as a modern-day Great Depression. He makes a compelling case for why traditional fiat currencies are failing—and why precious metals like gold and silver remain one of the few reliable stores of value in the face of growing financial instability. Listen today!
Trump’s Inflationist Monetary Policy Favors Wall Street Over Main Street
by Ryan McMaken
LewRockwell.com
The Trump administration has tried to cultivate a reputation for preferring “Main Street over Wall Street.” Unfortunately, this image is belied by the administration’s renewed push for artificially low interest rates and monetary inflation. By embracing these policies, Trump has put himself squarely in the camp of “Wall Street over Main Street.”
This is because a policy of monetary inflation and low interest rates favors wealthy owners of assets while imposing higher prices and fewer income gains on people of more modest means. The Trump policies of inflation and low interest rates fuels levels of inequality far greater than would exist under relatively free market conditions. This is because the low-interest-rate policy increases disposable income far more rapidly for people at higher income levels than it does for people at lower income levels.
Analysis, Five Things You (Didn’t) Know About Inflation
from Kosova Press
Inflation has returned in Europe and the US, after years of low price growth, worrying governments, the population and central banks, gradually unaccustomed to this phenomenon, synonymous with economic uncertainty and lower living standards.
Toothpaste
“Inflation is like toothpaste that, once it’s out of the tube, it’s almost impossible to put it back in,” warned the German Karl-Otto Pohl, president of the Bundesbank, in 1980.
This postulate was somewhat forgotten, because since the creation of the common currency and until the Covid-19 pandemic, price increases were low in the Eurozone, even below the 2% target set by the ECB since the financial crisis of 2008 .
But, the crisis reappeared last summer with the acceleration of inflation.
U.S. Dollar May Be Set For Surprise Countertrend Rally
from King World News
With sentiment extremely negative as well as a large volume of end of the word articles, it appears that the US dollar may be set for a surprise countertrend rally.
US Dollar Set For Possible Countertrend Rally
May 3 (King World News) – Naveen Nair at Citi: DXY’s weekly momentum has crossed over in deeply oversold territory. This has historically been an indicator of a >3% rally in the dollar in the last 10 years, and is supported by other technical developments as well as broader macro sentiment.
Bitcoin to Infinity? Venture Capitalist Says Crypto’s Value vs. Dollar Has No Ceiling
from Trading View
The dollar is weakening this year. As reported, the US dollar index declined 7% year-to-date, one of its worst openings in recent history.
The dollar index measures the value of the dollar against six other major foreign currencies. As tensions between the US and several countries have increased on the trade front, worries regarding the long-term strength of the dollar are beginning to emerge.
Bitcoin Receives More Attention From Investors
As the dollar weakens, more investors are turning to Bitcoin as a potential hedge. Venture capitalist Tim Draper indicated that Bitcoin may serve as an insurance policy against the failure of fiat currencies.
Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse
by Doug Casey
International Man
You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.
This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.
Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money.
Tim Draper Warns Bitcoin Could Surge to Infinity Amid Hyperinflation Fears
by Alex Choi
Token Post
Billionaire venture capitalist Tim Draper has reignited bullish sentiment around Bitcoin (BTC), predicting the top cryptocurrency could skyrocket to "infinity" against the U.S. dollar if hyperinflation strikes. In a recent social media post, Draper drew parallels to the Civil War era, when the Confederate dollar—once equal to the U.S. dollar—collapsed due to excessive money printing and lack of international backing. By the end of the war, a single bar of soap cost $50 as people rushed to trade devalued currency for tangible assets like gold.
Draper warned that the U.S. dollar index (DXY) is off to its worst annual start in four decades, heightening fears of a potential financial crisis. He believes escalating geopolitical tensions could further erode global trust in the dollar, pushing investors to seek alternative stores of value.