A Perfect Bullseye: The CPI Splits the Arrow.

It’s almost too good to be true, but the CPI didn’t surprise. [The Rude Awakening] January 13, 2023 [WEBSITE]( | [UNSUBSCRIBE]( A Perfect Bullseye: The CPI Splits the Arrow. - The CPI numbers were right on the consensus estimates. - The markets’ reaction was more muted than I thought. - But the energy complex soared to my utter confusion. [AOC and Biden Plot to Replace US Dollar?]( [Click here to learn more]( A former advisor to the CIA and Pentagon predicts President Biden plans to retire the US dollar we know – and replace it with a digital “spyware” currency. Your US dollars could be confiscated – or made worthless. It is underway now. On March 9, Biden signed Executive Order 14067, which could pave the way for the new US currency. AOC tweeted her support. Dems could use this to hold onto power indefinitely. [Please view this warning now](. [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Friday, you beauty! It’s pizza day in the Ring Household, as it is every Friday. But not before coffee… and then a crisp, cold beer with Mrs. Ring for lunch. As you know, I love old movies. Casablanca, To Catch a Thief, and Raiders of the Lost Ark… all masterpieces. But I’ve never mentioned my love for Errol Flynn. Flynn was the one old movie star I could take watching with Philosopher-Truck Driver John Ring as a young boy. And that’s because he played heroes. Don Juan, Captain Blood, and, of course, Robin Hood were my favorites. There’s this wonderful scene in The Adventures of Robin Hood where Robin enters the archery contest against all advice. The greatest archer in England would surely win the contest and give himself away. But such is Robin’s hubris that he thinks he will win and manage to escape. The poorly disguised Robin, who didn’t have a hope of fooling the great Basil Rathbone’s Guy of Gisbourne anyway, looks as though he’s lost the contest after all. The archer before him shot a perfect bullseye. Undaunted, the coolly arrogant Robin walks up to his shooting position, takes aim, and pulls back his bowstring. He lets fly his arrow… and against all probabilities, he splits the previous archer’s arrow. In the movie, the announcer shouts, “He split the arrow!” [SJN] Robin is declared the winner but gets arrested immediately. Of course, the Merry Men rescue him, and they all live happily after all. But it was odd today. As soon as the CPI numbers came out, I swear I heard someone yell, “He split the arrow!” What Happened? Well, nothing… really. The CPI month-on-month, the Core CPI, the CPI (year-on-year), and the Core CPI (year-on-year) all came in exactly as predicted. This is a snapshot from [MarketWatch]( [SJN] Here’s a look over time: [SJN] Credit: [The Wall Street Journal]( Since the numbers were right on the consensus, I expected equities to take off. But they didn’t, really. [SJN] It was a snooze fest, to be honest. The SPX barely moved, while the Nazzie and Dow were each up 0.64%. However, the energy complex rocketed, with some stocks over 3% up. But I couldn’t understand why the equities market - especially the Nasdaq - wasn’t zooming or why energy stocks were flying (with a seemingly low inflation number). I proclaimed my confusion on Paradigm’s Slack channel and asked someone to explain the market reaction to me. Enter Alan Knuckman to the rescue! Alan wrote: Crude is last of the assets to find bottom base...reality of rate hikes at end can’t help Dollar so only move is DOWN DX... Crude 70-90 for six months closing in on 80 pivot for pop MONEY MAKING energy stocks holding only 5% off fall top though crude is down 40% Let me translate: - Crude oil is finding its bottom right now after everything else already has. - The next rate hikes, however many we have, won’t lift the USD, so the dollar index will fall further. - Once crude oil hits $80, it’ll pop higher. - Energy stocks are holding up incredibly well - only 5% away from the autumn highs - despite crude being down 40%. Ah, that makes much more sense. But I think I will have to reevaluate my dollar index thesis, at the very least. At the end of the day, at least inflation looked like it was “tamed.” Blindsided By the Jobless Claims Let’s look at the numbers again, but focus on the ones in the green box: [SJN] Now here’s the interesting part: jobless claims came in much better than expected, with only 205,000 claims being filed versus the 210,000 consensus number. Also, continuing claims edged down from 1.7 million to 1.63 million. That probably means the labor market is still hot. And that means Chairman Pow may have other ideas in mind. [Trump’s Final Gift To America]( [Click here to learn more]( There’s a little-known way Trump could – one day – have his revenge. It involves a Federal Ruling he oversaw in the final year of his Presidency that could change America forever… unleash an estimated $15.1 trillion in new wealth… and create countless ways for everyday Americans to benefit. What is this little understood decision? And how will it impact you? [All the important facts are here.]( [Click Here To Learn More]( What Will the Fed Do Now? This is where we enter into the area of conjecture. If you look at the chart below, the Fed and the market still disagree on when the Fed will stop hiking rates and start cutting them. [SJN] Credit: [The Wall Street Journal]( Do we still trust Chairman Pow to get to 5.25%? We must allow that it’s a higher probability that he will if the labor market continues to show the strength it has been. And if we have genuinely seen the equities bottom, as men like Alan Knuckman think? Then surely Powell will keep his foot on the hiking brake. However, are the bond vigilantes back? Will they force the Fed’s hand and make him cut? That, too, is a possibility. The futures market has the fed funds rate peaking at under 5% and cutting far before the Fed does. This discrepancy between the Fed and the bond market must be resolved somehow. [Akane Otani and Nick Timiraos]( - affectionately (or not) known to The Street as NikiLeaks - write: At their meeting last month, Fed officials projected interest rates will continue rising through the spring, to around 5.1%. None of them penciled in cuts this year. They have generally signaled a somewhat more aggressive path for interest rates either because they are less optimistic than investors, who see a speedier slowdown in inflation this year, or because they are less pessimistic about the probability of a serious recession. In last night’s Daily Reckoning, my friend and colleague Brian Maher wrote: Jim Rickards, incidentally, is with Mr. Market. Jim believes the Federal Reserve will begin hacking rates in June. This he believes because he is confident the economy will soon enter a recession — likely a severe recession — and it will be obvious even to the Federal Reserve. They will therefore be compelled to execute the June about-face. This forecast, also incidentally, rhymes very nicely with our own. My money’s on Jim and Brian. Either way, get out the popcorn. Wrap Up As there’s a US holiday on Monday, there will be no Rude. So, I wish you a wonderful, restful long weekend. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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