I’m on NewsMax today, talking about a whole host of issues. This should be a fun one! On to the talking points:
PPI and Inflation
The latest Producer Price Index was released yesterday: https://www.bls.gov/news.release/ppi.nr0.htm
A quick note on what the PPI measures:
Basically, this is a way to measure inflation by looking at the prices that producers pay to, well, produce things.
It’s not so much in contrast to the Consumer Price Index (CPI), released Wednesday, which measures inflation by looking at the prices that consumers pay, as much as it is just a different way to try to measure largely the same thing.
Differences between the two are sometimes indicative of underlying issues, other times they’re just… different.
It’s kind of like taking someone’s temperature at two different parts of the body with two different thermometers. Should they read the same number? Probably. Do they usually? Not really. Does that always mean that something’s wrong? Nah.
So what’s going on here?
If we look at PPI figures, they jumped in December (+0.5) and January (+0.6) from the previous months.
The reason for this, I think, is that producers saw Trump win the election, heard him promise to raise tariffs (which are taxes), and stockpiled as many materials as they could in advance of the increased price.
That we’re seeing no additional inflation this month in the PPI reflects the fact that producers have stockpiled and are slowing their purchasing now that the tariffs are being levied, delayed, and threatened.
Oh, Canada
Link: https://thehill.com/homenews/administration/5191732-commerce-secretary-canada-51st-state/
I’ll be completely honest, this is grotesquely offensive to me and that it keeps being said is deeply disturbing.
I’ve yet to hear anyone in Canada express a desire to make this happen.
We are two separate nations because we are two separate peoples.
Imagine the opposite case, which would be equally viable: what if the US became Canada’s 11th province?
We (Americans) would probably be pretty reticent to this idea and it probably strikes most of us as offensive.
This is exactly how Canadians, writ large, feel about this.
We need to drop this talk. Now.
Tariffs…
I’ll just share this here:
First off, we don’t make “champagne.” We make “sparkling wine.”
Second, the EU was not formed to “[take] advantage of the United States.”
But let’s get into the nitty-gritty of this.
If we look at US imports from all countries, “beverages, spirits, and vinegar” combined make up less than 1% of our total imports, roughly $32.6 billion worth.
The simple fact is that our purchases of EU wine/champagne are pretty small, so this is hardly going to affect the EU at all.
AND, as if that weren’t enough, they have plenty of other customers around the world that they can sell to, so it’s hardly going to even register to the producers of these products.
Who is it going to impact? American consumers. For the duration of this tariff, we don’t get to have nice things.
So once again, Trump is basically throwing a temper tantrum and hurting Americans, not the supposed foreign adversaries.
This whole thing reeks of an attention-seeking president who’s more concerned about being talked about than actually helping the American people.
Stock Market “Rally”
The stock market has turned around from its resoundingly downward trend, rising ever so slightly. Why is this?
Think of it this way: the US and its markets have faced incredible uncertainty and on multiple fronts. I’ll highlight two:
First, and most obviously, the tariff situation. Will he, won’t he, he did, oh we’re walking these back after 48 hours in some industries, oh now in more industries but only for 30 days? All of this absolutely wreaks havoc on businesses.
But so does the threat of a government shut down.
Last night, Chuck Schumer came out and said that he’d hold his nose and vote to avoid a government shut down.
Frankly, I’m glad he finally faced a “lesser of two evils” situation. This is what the American people have been faced with come election time for decades so it’s good to see him experience something the everyday American experiences, too.
By signaling that Democrats are (potentially) willing to go along with this Continuing Resolution, a good deal of uncertainty in the US was mitigated and this is reflected in the stock market.
Still swamped by the uncertainty of tariffs, but we need to take what we can get at this point.
So What Happened?
I was joined by my wonderful colleague and friend, Tom Savidge. Tom’s insightfulness is matched only by his affability.
We talked primarily about the stock market rally and tariffs, which was great fun. Jointly, we hit most of the talking points above, though Tom had a wonderful tie-in to small businesses.