Something extraordinary occurred last week. On Wednesday, the Fed made a routine announcement. That day, the price of silver was rising, but not out of the normal. Fireworks began last Thursday, and in 6 hours, the price of silver skyrocketed by 5%.
The story of energy and the economy seems to be an obvious common sense one: some sources of energy are becoming scarce or overly polluting, so we need to develop new ones.
Perhaps the biggest story of 2014 for U.S. investors is the return of the inflation trade as U.S. inflation rates as measured by the Consumer Price Index (CPI) have bottomed and accelerated over the last few months.
The Latest Conference Board Leading Economic Index (LEI) for May is now available. The index rose 0.5 percent to 101.4 percent. April was revised down 0.1 percent (2004 = 100). The latest number came in slightly below the 0.6 percent forecast by Investing.com.
This Cool Video comes from the Financial Times. Patrick Jenkins, the financial editor, discusses the shadow banking sector in three minutes. He provides a big picture overview. Two additional points should be noted.
It was a very interesting setup leading into the Fed meeting this week. The Consumer Price Index (CPI) has been rising as of late. Expectations were that the Fed would tighten its language over interest rates and inflation as a result of the recent climb of CPI.
The news stories about crude oil in the financial media have been all about how oil prices have been volatile based on the crisis in Ukraine, the crisis in Iraq, the crisis in Nigeria, the lack of a Keystone pipeline, etc.
With the Fed committed to zero interest rates, significant moves in the stock market and economy are now largely influenced by changes in inflation. With four months now of accelerating inflation data, there is a heightened risk of an intermediate market peak and correction by the fall of this year.
From the early 1980s until now China has grown at a pace not matched since the four decades Argentina enjoyed before the First World War. In spite of some fairly goofy attempts a few years ago, however...
With yesterday's release of the May Consumer Price Index, we can now establish that Real Retail Sales for May showed no growth. The month-over-month change was a statistically insignificant -0.01 percent. Year-over-year growth is an anemic 2.07 percent.