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With Elections Mostly Behind Us We Face the CPI Next

Now that elections are mostly behind us (except for a handful of races) we can move onto the worryings of the consumer price index (CPI).

Tomorrow we have the CPI announcement at 7:30 a.m. (central) and consensus is for a reading of 7.9% as compared to the last reading of 8.2%. The core rate is forecast at 6.5% versus the last reading of 6.6%. NOW is the time when the Fed is gathering ‘data’ for their December FOMC meeting—gathering info to either reduce the rate of increases in interest rates or keep it at 75 basis points. We have tomorrows CPI reading as well as the November reading of CPI and 1 additional employment report before the December meeting, which occurs on December 13 and 14.

Today we have no economic news of consequence–although there will be lots of chatter around the elections–but generally it could be a relatively quiet day in equities and the bond market.

I see Meta (Facebook) has announced 11,000 folks are being laid off–it has been a long time since I remember tech firms laying off large numbers of folks. Of course Twitter laid off half their folks last week (before trying to hire some back). Not certain this is meaningful to the overall economy, but certainly the layoffs are high profile.

Bitcoin is down to $17,xxx as there is turmoil of sorts with liquidity–I obviously don’t follow this closely as I would never own something like this–I still don’t understand block chain and don’t plan to take the time to try to understand it–I’ll leave it to the smarter people. But like many things one has to keep an eye on a trillion dollar asset (which was previously $3 trillion)because it is large enough to have consequences.

Another day and it is unlikely I will buy anything today–maybe Friday will be a nibble day. With low cash levels there is no use stepping further into the fray until after the CPI tomorrow.

5 thoughts on “With Elections Mostly Behind Us We Face the CPI Next”

    1. Everybody and his brother has been predicting a pivot. Everybody except the Fed. Their priorities are different than the average pundits hopes and fears.

  1. Tim I don’t own any of the different types play money, but they have been known for large moves up and down. The question is, what happens if we have a herd stampede for the door?
    Long lived S & H green stamps and sister Blue Chip stamps remember those?
    People collected those and traded them for goods and services at redemption centers. Was so popular Warren Buffet even purchased a large share of the Blue Chip co. one of his investments he probably regretted.
    Got me to thinking yesterday. If I had even one Bit coin where could I spend it? Who would say, sell me some groceries for a coin worth 20,000 and give me back 19,800.00 in cash? Then I got to thinking, was there anyone who would sell me goods or services for a bit coin and give me change in US currency ? Maybe Gold or Silver?
    My mistake Warren did get See’s candies out of the deal.

    1. As a guy whose held a very, very tiny amount of crypto. I was selling computer components to crypto miners. I offered to accept crypto as payment b/c I could swap it to fiat after going thru many circus hoops. I wanted to get a read on the environment. Out of 20’ish transactions, no buyer ever showed interest or gave payment in crypto. It appears that the original use case of using crypto as a currency is dead, and now it is simply a speculative asset. Heck, even the Staples center is now the Crypto.Com Center, and do they accept their own crypto coin as a form of payment… nah, sure don’t. So yeah, nowhere to spend this Monopoly money.

    2. As someone who knows just enough about bitcoin to be dangerous, that’s not how it works.

      You never get change from a bitcoin transaction because you never pay more than requested. If the price is .001019 bitcoin, you submit .001019 bitcoin to the vendor. As bitcoins are not real, you can subdivide them into as many portions as you need. There’s no requirement to return change.

      I suppose a private transaction could occur such that you hand over your bitcoin token, and receive some goods, services, and currency. It’s probably not going to be USD given the volatility and dubious status of bitcoin in this country.

      I can imagine your counter party wants to flee his country, but he cannot take his currency with him due to export restrictions. So he hands you $17xxx (or whatever you demand) in his local as he would be forced to abandon his savings otherwise.

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