Inflation Finally Rears Its Head – Ep. 228

* We had a very significant day in the currency and gold markets yesterday
* We had some good follow through today that really buttresses the point that I want to make
* We got some economic news that was released yesterday that would have been considered bullish for the dollar and bearish for gold
* By most people, other than me, who trade currencies and who trade gold
* But the fact that gold did not sell off or the dollar did not rally was very significant
* The news was the CPI and Retail Sales
* First of all, Retail Sales came out stronger than expected, they were looking for a gain of .1% and we got a gain of .4%
* They actually revised the prior month's gain from +.6% to  +.1%
* Now a lot of the gain in retail sales, though has to do with the fact that prices are higher
* Retail sales are not adjusted for inflation
* Prices are going up
* Retail sales may be going up, particularly things like gasoline
* It's not just the price of gas that's going up; everything is going up
* The CPI came out at the same time as Retail Sales and that is the bigger number
* We got a .6% rise in consumer prices
* That's versus the expected .3%
* Even the core - you take out food and energy - we were up .3% there versus an estimate of .2%
* Year over year CPI 2.5% that's the official number
* Obviously prices are going up a lot faster than that but according to the government they're going up at 2.5%
* Even if you take out food and energy and just look at the core, year over year the change is 2.3%
* Now remember the Fed is saying their target is 2%
* When Janet Yellen testified this week she said that she's confident this week that we're going to hit her objective
* Well, we've already surpassed her objective