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Peter Schiff: The Inflation War Is Over; Inflation Won!

Peter Schiff: The Inflation War Is Over; Inflation Won!


After the August CPI data came out, Paul Krugman declared that…



Peter Schiff: The Inflation War Is Over; Inflation Won!


After the August CPI data came out, Paul Krugman declared that the inflation war was over. The Biden administration and the Fed won the fight. In his podcast, Peter Schiff said he actually agrees with Krugman, at least in part. The inflation war is over. But who really won?

Last week’s CPI data showed price inflation heating up again, driven by climbing oil prices. Despite CPI rising to 3.7% in August after dipping to 3.2% a month earlier, Peter said most people still think everything is fine.

I think the more important aspect of the inflation data was how few people seem to comprehend what it means. Most of the talk I hear by the talking heads on the financial media is that everything is great. The inflation threat is pretty much behind us. Yeah, there are a few more bumps in the road, but we’re on the road to 2%. No problem. We’ll be there. The Fed is going to be cutting interest rates by next year, so these high rates aren’t really a problem. It’s just a temporary nuisance until we get back to low rates.”

Peter mentioned one pundit who proclaimed inflation has topped out and it’s coming down.

How can he say that when if you actually look at what’s happening, it’s the reverse? Inflation has bottomed out and now it’s rising.”

We had a long run of low inflation as the government measures it. (Not necessarily how people live it.) We enjoyed more than a decade with CPI averaging less than 2%. That all changed in 2021. Peter called it the “breakout year” for inflation. Then in 2022, it got even worse.

If you think of inflation like a stock, this was a massive breakout. You had a 10-year consolidation, kind of below this 2% resistance, and now it’s a massive breakout above 2%.”

Peter said it looks like 2023 will be a bit of a pullback.

If you were a trader, you would want to buy inflation. Inflation looks very bullish on a chart. It broke out and now you got a little bit of a pullback, and it’s an opportunity to buy the pullback following the breakout. All the evidence is inflation is heading a lot higher.”

Oil prices closed above $90 last week. They are up 8% in September already. Meanwhile, interest rates continue to climb. Americans have a lot of debt and they use a lot of energy. In other words, two important inputs in the US economy continue to get more expensive. At least some of those costs will be passed on to consumers and that will ultimately be reflected in the CPI.

It’s obvious to anybody who opens their eyes that inflation is not topped out and coming down. It’s bottomed out and going up. And the people who are blind to this, who are asleep, they are in for a rude awakening. That is a lot of investors.”

Peter said the thinks we’ll see much worse price inflation in 2024.

All of these rosy Goldilocks scenarios that are out there, they’re all going to fall apart in 2024.”

Nevertheless, after the August CPI data came out, Paul Krugman loudly declared the inflation war was over and the Fed won.

According to Paul Krugman, the economy is great, and we’ve won the war on inflation, and there’s no recession. I mean, how wrong can one guy be?”

Peter said he does think Krugman is right about one thing though.

I agree with Krugman that the inflation war is over. I just disagree on who won. I think inflation won!”

Of course, the Federal Reserve hasn’t officially surrendered, but Peter said when it does, gold is going to go ballistic.

You don’t want to wait for that to buy it. You want to head over to SchiffGold and buy your gold now, and your silver, before this next breakout. Because when it moves, I am convinced it’s going ot be fast.”

Tyler Durden Wed, 09/20/2023 - 12:05

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Lightning Labs releases Taproot Assets alpha, bringing stablecoins to Bitcoin

Taproot Assets is “how we bitcoinize the dollar and the world’s financial assets,” says Ryan Gentry, director of business development at Lightning…



Taproot Assets is “how we bitcoinize the dollar and the world’s financial assets,” says Ryan Gentry, director of business development at Lightning Labs.

Bitcoin layer-2 infrastructure firm Lightning Labs has released the mainnet alpha of Taproot Assets, a protocol aimed at enabling stablecoins and real-world assets to be issued on the Bitcoin and Lightning Network.

The current version, Taproot Assets v0.3, will provide a “feature-complete developer experience” to issue, manage and explore stablecoins and other assets on the Bitcoin blockchain, according to Ryan Gentry, head of business development at Lightning Labs.

“We believe this new era for Bitcoin will see a myriad of global currencies issued as Taproot Assets, and the world's foreign exchange transactions settled instantly over the Lightning Network.”

“With this release, developers can issue financial assets on-chain in a scalable manner,” Lightning Labs stated on Oct. 18 in a separate post. “Today marks a new era of multi-asset bitcoin.”

This version of Taproot Assets will work by routing through existing Bitcoin liquidity on the Lightning Network.

Gentry says the integration will extend Bitcoin’s network effects and move it one step closer toward “bitcoinizing the dollar.” He added:

“This is how we make bitcoin the global routing network for the internet of money. This is how we bitcoinize the dollar and the world's financial assets.”

Gentry described developer demand for stablecoin applications on Bitcoin as “overwhelming” — particularly given that some stablecoin issuers hold more United States Treasuries than the likes of Germany, South Korea.

“[It] signifies the importance of these assets globally, and gives a sense of scale for the global user demand,” Gentry added.

Related: BitVM wasn’t created to make Bitcoin a pseudo-Ethereum, says developer

Nearly 2,000 Taproot Assets were minted on testnets over the last several months in the lead up to the mainnet alpha launch, according to Gentry.

Alpha launches typically mean the development isn’t in its final state. Lightning Labs said the alpha tag indicates that they expect the community to test it for potential bugs.

Bitcoin Drivechains (through Bitcoin Improvement Proposal-300), Botanix Labs’ Spiderchain and the BitVM are among the other developments in the Bitcoin ecosystem looking to expand Bitcoin’s capabilities.

Magazine: Recursive inscriptions — Bitcoin ‘supercomputer’ and BTC DeFi coming soon

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The GDP Outlook: Now and Near Future

The October WSJ forecast survey is out. The mean forecast is for no downturn (no 2-quarter negative growth). It’s also a lot higher than three months…



The October WSJ forecast survey is out. The mean forecast is for no downturn (no 2-quarter negative growth). It’s also a lot higher than three months ago.

First, here’s the forecast compared to three months ago, in levels.

Figure 1: GDP as of 2023Q1 3rd release (bold green), WSJ July mean forecast (light green), GDP as of 2023Q2 3rd release/comprehensive revision (bold black), WSJ October man forecast (sky blue), all in logs, 2022Q4=0. Source: BEA via FRED, ALFRED, WSJ (various), and author’s calculations. 

The upshift in levels is partly due to GDP higher than forecasted for Q2. But Q3 and Q4 GDP growth is also forecasted to be higher than 3 months ago — by about 1 ppt (annual rate), while 2024Q1 growth is about the same (0.36 ppts). 2024Q2 forecasted growth is about halved — from 1.06 ppts SAAR to 0.56 ppts.

It’s not that there aren’t some forecasting a recession. Figure 2 depicts the mean growth rate, along with the 20% trimmed high/low bands. While mean is all positive growth, median (Panday at S&P Global Ratings) has -1% and 0% growth (SAAR) in 2023Q4 and 2024Q1, respectively.

Figure 2: GDP (bold black), October WSJ survey mean (sky blue), 20% high/low forecasts (light gray lines), Atlanta Fed GDPNow as of 10/17 (blue square), all in billions Ch.2017$ SAAR. Source: BEA 2023Q2 3rd release/comprehensive revision, WSJ (October survey), and author’s calculations.

GDPNow, which uses data up to the 17th, is higher in Q3 than the 7th highest growth rate (out of 65 respondents), so the economy seems to be outperforming what respondents thought in early October.

Jonathan Holt at ScotiaBank forecasts two consecutive quarters of growth, in 2024Q1-Q2. Generally, most negative growth quarters are 2023Q4 through 2024Q2. So some people are still forecasting a rule-of-thumb recession (on GDP metric), even as less than half of respondents are now predicting a recession in the next year (specifically, 48%).



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WVU partnering with industry to improve health, environmental outcomes for disadvantaged communities

A West Virginia University team of industrial engineers is looking to turn $800,000 worth of Environmental Protection Agency funding into direct support…



A West Virginia University team of industrial engineers is looking to turn $800,000 worth of Environmental Protection Agency funding into direct support for local industry.

Credit: WVU Photo/David Malecki

A West Virginia University team of industrial engineers is looking to turn $800,000 worth of Environmental Protection Agency funding into direct support for local industry.

They are partnering with industrial facilities in disadvantaged communities statewide, providing free technical assistance to help those businesses improve their energy efficiency and minimize their waste streams, air pollution and carbon footprints.

“Many chronic health issues in West Virginia can be linked to exposure to industrial emissions and disadvantaged communities are often affected to a greater extent,” said project lead Ashish Nimbarte, professor and chair of the Department of Industrial and Management Systems Engineering at the Benjamin M. Statler College of Engineering and Mineral Resources. “We will help these facilities reduce their impact on environmental and community health through updates to processes or equipment. This project is about supporting our state’s businesses in making changes that will really benefit their communities while maintaining their profitability.”

The funding, authorized by the Bipartisan Infrastructure Law, comes from the EPA’s Pollution Prevention Grant Program. That program advances the federal Justice40 Initiative, which is intended to direct 40% of certain federal benefits to communities overburdened by pollution and marginalized by underinvestment.

To identify industrial facilities in West Virginia, Nimbarte said his team will use data from the Council on Environmental Equality’s Climate and Economic Justice Screening Tool, which characterizes census tracts as disadvantaged based on a set of criteria related to climate change, energy, health, housing, legacy pollution and transportation. After that, they’ll begin the process of pre-visit assessments and outreach.

“Right now, we’re focused on identifying facilities with the largest impact on environmental and public health in disadvantaged communities,” Nimbarte said. “A majority of these businesses are busy running daily operations and may not have the resources to review the environmental and health impacts of the energy, water and materials they use. We want to partner with such businesses to assess their operations, to look at productivity improvement as well as resource conservation and waste minimization.”

Assistant Professor Avishek Choudhury said one of the biggest barriers facilities in disadvantaged communities face in developing and implementing source reduction plans is lack of technical support.

“That’s why we do onsite assessments — so our team’s recommendations can target each facility’s specific pollution, emissions and waste. Every assessment will be customized to the businesses, and we’ll develop highly collaborative relationships with the managers, who are often already aware of pollution prevention opportunities but may not have the resources to turn opportunities into operations.

“Our team will make sure managers have the sound technical knowledge they need to execute recommendations that can enhance their facilities’ environmental performance, competitiveness and profitability. Return on investment is a priority for them, so it will be an important measure in every write-up we provide,” Choudhury said.

The onsite technical assistance to facilities will include not only assessments and recommendations, but in-person trainings, videos, self-guided modules and interactive media.

Chris Moore, research associate, added onsite technical assistance isn’t the only form of support their team will offer businesses. They will also widely distribute information through online platforms such as e-newsletters, and they’ll organize a conference to present case studies and talk about ways technology and processes can prevent pollution through production reformulations, raw material substitutions, and improvements in maintenance, training or inventory control.

“In West Virginia’s most vulnerable communities, unemployment is high and incomes, education levels and life expectancies are low,” Nimbarte said. “Through this work, local businesses can serve as catalysts to improve the health and environment of struggling residents.”

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