by David Brady
The latest economic information is driven by the following:
1. The surprising increase in non-farm payrolls, which drove stocks and bond yields higher. I believe this is at best temporary given the ongoing destruction of the mainstream economy. The euphoria that followed will likely be short-lived.
2. We have both deflation and inflation. Deflation in discretionary products and services and inflation in everything people need, i.e., necessities such as food and energy costs. This means that for the vast majority of people, inflation is going up, not down, signaling stagflation has already begun. In my opinion, it is likely to get worse as supply shocks become more pervasive. For now though, everyone is focused on deflation.