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Transcript
Hello fellow Rubble Capitals. Hope you're well. So, we had the new PPI data come out this morning and it was, drum roll please, negative month over month. That is correct. Negative. So, what this means for the Federal Reserve is the probability for a 25 basis point cut or a 50 basis point cut has skewed massively. Now, what's interesting is what's going on with the CME and this Fed watch because they're not really adjusting the probabilities to a significant degree. And I think I don't like to make too many predictions on this channel, but I think especially if we get a weak CPI number or below expectations tomorrow, well, that's the big print, that the that that is going to change everything as far as the Fed's calculation on whether or not they're going to lean more toward the 25 basis point cut or more toward the 50 basis point cut. Because up until now or up until yesterday, uh especially up until last week prior to getting the non-farm payrolls, everyone was saying, "Oh, it's just 20." In fact, they were saying it's either 25 or a pause. Like 50 wasn't even on the bingo card for the well, for most people, the mainstream media, let's say, wasn't even on the bingo card. Wasn't even a possibility. And all of a sudden, as we get more and more data, it's like the probability is going straight up. Are no certainties, only probabilities. But what we're talking about here is the big change in the probabilities. Okay, so let's go over to Well, let's go over to the BLS report and here's the punchline and then we'll go over to Zero Hedge. I made fun of Zero Hedge today and I always poke fun at them because they are like the go-to place for inflation, inflation, inflation, stagflation, hyperinflation. We're going to have hyperinflation. The dollar's going to crash. It just every single article is hyperinflation, hyperinflation, inflation, inflation. And then of course today they're making fun of the Marxists over at the University of Michigan for being wrong about inflation. And I love the guys over there. I'm like, "Come on, guys. Come on. You can't make fun of other people for predicting inflation come from zero hedge." And that'd be like Peter Schiff making fun of people for predicting inflation or that the dollar is going to crash or something. I mean, come on. Come on. All right. Anyway, getting to the data. So, right here, guys, you can see the producer price index edged. >> You need to share your screen, George. >> And by the way, when they say edged down, that's a nice way of saying negative. Okay, so getting back to this here. So, right here, producer price index for final demand edged down.1% in August. seasonally adjusted. Okay, so.1%. And what was really wild is the services component of that which I think is probably more important than the goods was down [Music] see final demand for services down negative.2 so negative.2 2 on the services and then a 0.1 on the goods. But regardless, this was way below expectations. Way below expectations. Let me show you what I'm referring to. We're going to go over to the calendar and let's zoom in a bit for you guys. There we go. So, Wednesday, we see that the month-over-month for the PPI was expected to be.3. That's a big miss. Big miss. And last month, by the way, it was a.7. So, we've gone from a.7 to a negative.1. I mean, then then you've got to kind of ask what all the guys and gals are doing that were screaming and yelling stagflation, stagflation, stagflation, stagflation, stagflation. And you guys remember on this channel I've said I'm blue in the face that although sure you can have months where the CPI or the inflation numbers are higher than expected but if you have a recession where you have a spike in unemployment a big softening in the labor market you you you don't get an acceleration of inflation just it's not a thing. Even in the 1970s, the inflationary decade of stagflation, when we had a recession and when the unemployment rate really spiked up and the labor market softened, we had disinflation. We did not have the CPI going higher and higher and higher and higher and higher, contrary to popular belief. And the reason is actually quite simple. Because if wages aren't going up, even if prices go up, that decreases aggregate demand. and then you just have everything rolling over. It's like in during the GFC when oil prices were going up to 120 130. Sure, that created short-term consumer price inflation, but what that did is it made the consumer rob Peter pay Paul along with everything else that was going on. So, that actually was probably one of the catalysts that led to the actual disinflation and deflation that we got going into 2009. All right, but getting back to this here, we've got core, that's less food and energy at.3. So, I think that's probably why the CME, the Fed watch didn't really change that much. But I think what we have to do is not just focus on the CME, the Fed watch, but we also have to look at the two-year Treasury versus the Fed funds rate to really think through, okay, are the probabilities shifting? And then the big numbers tomorrow. So, tomorrow they're expecting a.3. Now, what's interesting, what's really interesting is I was listening to one of my favorite podcasts. I'll give him a shout out. It's um uh the Macro Trading Floor. I don't even know the name of it because it always just pops up on my iTunes. My buddy Macro Alf, he's he's awesome. And the guy he does it with is really good, too. Brent Donnelly. And it's called the Yeah, the macro trading floor. And what Brent was talking about on the last episode is this anomaly where usually the CPI comes out before the PPI. I didn't know this. I had no idea. and he did a um kind of some statistical research and he found that often there's a pretty good correlation between the PPI and the CPI as far as whether they come in below or above expectations. So in other words, if the PPI is below expectations, then there's I'm just throwing out numbers just for the sake of the example, then there's like a 75 or 80% chance that the CPI it also is under expectations. And but usually you have the CPI first, which is the more important number, but for whatever reason, I'm not really sure why, uh they do they did the PPI first for this month. So, I think if if Brent's right, which I'm sure he is, I mean, he's a really smart guy and I'm sure he did his homework, but just uh taking him for his word, then you would expect the probabilities of the CPI tomorrow coming in less than expected uh expectations, which is.3 is extremely high, extremely high. And same thing obviously with year-over-year. So I mean look at this in fact the PPI the expectation was.3 and for tomorrow the CPI is.3. So if PPI can come in negative.1 I I it's it's it's above zero possibility the CPI could come in negative and if that comes in negative then uh I can assure you the odds of the 50 basis point cut instead of the 25 basis point cut are really going to skyrocket even if they just kind of gradually nudged up today. So, let's go over I want to go to the twos and 10 or excuse me, the twoyear Treasury and Fed funds because most of you guys know from watching my videos, the the Fed funds really follows the two-year Treasury. If you look at a going back, you know, 40 years or so. And so, that gives us a a read kind of on what the Fed's going to do. It kind of we can isolate the signal through the noise. But before we get there, let's go over to Fed Watch. And and quite frankly, I was really surprised when I looked at this this morning. Really surprised because yesterday we were at a 7% chance of a 50 and today we're at uh 9.9, basically 10%. And I think that's because there's this narrative where the Fed really pays a lot more attention to core um than the uh headline number, but I I don't know how accurate that is, especially when you combine this with what's happening in the labor market, the downward revisions to not just the non-farm payrolls from the last few months, but this huge massive benchmark revision that we talked talked about yesterday where they revised down almost a million jobs, almost a million jobs from April 2024 to March of 2025. But let's get over to this chart that I actually, you know, I give the Fed a lot of a lot of crap, but I I I do need to give them props. The Fred website is fantastic. It is really a great great resource and a fantastic tool. Now you can argue about the data but the website itself is really great. So hats off to the people who run the FRED website because you can do you can customize charts, you can make them different colors. I mean it's it's really an awesome awesome tool. But anyway, let's zoom in. Okay, there we go. So, the blue line is the 2-year Treasury and the red line is Fed funds. What I want you to notice, if I could Oh, it's kind of hard to Well, let me just You're forget my pointer. It's too difficult to highlight the line. Just notice that usually you have the blue line go first and then you have the red line go. And so, uh, let's see. As an example, we're going to go right here is a good example. Um, right here is a great example. There we go. So you can see that blue line really start to go down and then uh Fed drops and then we have the blue line if I can highlight it. There we go. All right. Right here prior to do the blue line really starts to go and then what happens afterward? The red line follows. We go over to the GFC and as you would expect it is the exact same thing. Blue line leads, red line follows. Same thing during the surveys sickness, by the way, right here. Right there, you see the blue line really start to go down. In fact, the blue line was going down as the Fed was increasing rates, saying, "Ah, yeah, I don't think so. I don't think so." Now, more recently is what I want to focus on right now is we had the two-year Treasury really start to go down and the Fed is just, let's say, behind the curve, no pun intended. And it got to a point where the Fed dropped down to the 2-year. This was right around February of 2025. But since then, we see the exact same dynamic. the Fed pauses and the two-year the blue line just goes down further and further and further and further. And if history is a teacher, you would have to expect that sometime in the near future, maybe not this Fed rate cut, but sometime in the next 6 months or so, the red line is going to meet up with that blue line once again. And so the question becomes, is the red line going to meet up with the blue line by the blue line going up, which rarely ever happens, or is it going to meet by the red line going down, which happens 95% of the time. So my money would be on they're going to meet up, but it's going to meet up by the red line going down. So then what we have to do is we have to go over to the two-year Treasury and see where it's trading right now. And as you guys can see, 3.54. Now, I'd like to remind you that right now the Fed funds rate is 4.33. So, we're looking at a 80 almost an 80 basis point delta. So, even if the Fed dropped 50 basis points, they're still not down to the 2-year Treasury. I mean, and and I don't want to toot my own horn here, but how long have I been saying on this channel that not that the Fed really matters and I I'm you guys know my position on the Fed and their balance sheet and, you know, their ability to control the economy or lack of ability to control the economy, but I've always said that if I was the Fed, I would definitely be cutting rates here if I if I had a dual mandate and I was a a PhD economist and I was at the Fed and I had their worldview and I used their framework. Again, not that I do, but if I did, I I would definitely be cutting rates because they have this quote unquote dual mandate where it's all about the labor market over here and inflation over here. So, if there's more risks to inflation, then you're going to be hawkish. If there's more risks to the labor market, then you're going to be doubbish. And I mean almost I don't know how long I've been saying this what you guys know probably better than I do but at least 6 months where I'm or at least since they paused I'm like no the the Fed should be cutting that this is there's way way way way way more risk to the labor market getting weak and becoming increasingly weaker than inflation going let's just use the CPI as a proxy going from 3% to 6% to 8% to 9% % the 20% like all the people out there in team stagflation land uh like to lead you to believe, right? It's all about narrative versus reality. And if you want to build your portfolio around narrative, well, go nuts. You know, it's all about stagflation and the dollar is going to crash into oblivion and you know, whatever. You guys understand the narrative, right? But if you want to look at reality, the reality of the situation is that if you believe the economy is slowing and if you believe the labor market is getting very very weak and we would likely be in an environment where we're going to see the unemployment rate spike substantially or even let's say a lot of job losses because the unemployment rate would include the labor force participation. So, let's just say a lot of job losses, then then you have to believe that we're going to have disinflation. Now, are the numbers accurate? No, of course not. But I'm using it as a trend. So, I'm not saying that the real rate of inflation is 2.7%. Or wherever the CPI is. It's higher than that. Sure, absolutely. I totally agree. But we have to look at the trend. Um, I would also argue that we the inflation rate today is much lower than it was in the summer of 2022. Much lower. Um, even though it's higher than the data that we're receiving from the BLS. Again, all about the trend. And if you believe the economy is slowing, if you believe the labor market is softening, if you believe the unemployment rate is going to go up, we're going to have mass job losses, then you also have to believe we're going to have disinflation. The the stagflation or the acceleration of inflation or consumer prices while the job market is plummeting, that that doesn't work. It it's it's really it's it's not a thing. And it's not really the Phillips curve. It's different than that. And again, if you don't believe me, just look at the 1970s and look at the recessions we had then. Look at the unemployment rate and look what happened to the rate of inflation. Always goes down. Okay, but getting back to this here. So, we've got the PPI, we've got the CPI, that's going to be absolutely huge. We've got initial jobless claims tomorrow. Uh, that's projected to be 235. be very interesting to see what that comes in at um especially after we have seen the non-farm payrolls and the benchmark revisions that we were talking about yesterday. Okay, now let's go over to the 10-year and down at 4.05 05. So that is a decrease of call it 55 basis points this year alone. So again, my point here is that if I'm the Fed, I I'm I'm looking at the risks involved here, and I think the risk to the labor market is far far far greater than the risk of inflation just going straight back up to 9%. Uh using the CPI a proxy for that like we had in the summer of 2022. Look at the 30-year Treasury. Whoops, that's not it. 30-year Treasury right here, trading at 4.69. 4.69. And by the way, the Fed funds is at 4.33. So, we've got a 30 basis point spread between Fed funds. And oh, by the way, the 10-year Treasury is inverted. When you look at Fed funds, it's 30 basis points lower. So th this is not this is not what you would have in stagflation. I assure you in stagflation if the Fed was at 4.3 the 10-year Treasury would be at eight. If we we if we had stagflation or we are going into an environment where the uh 10-year Treasury would likely be accelerating. But the big takeaway here, guys, is we're going to really, really have to watch the CPI number tomorrow. This is going to be huge. Lot of very, very important data. So, make sure you stay tuned to the Rebel Capitalist channel because we'll not only give you the data, but give you the analysis that you need to make a a thorough uh calculation, let's say, as to what you should be doing with your portfolio based on your own framework. And that's going to be different for every single person out there. I had a couple people mention gold. I almost forgot. Let's go over to the GDXJ because man oh man, do you want to look at a good looking chart. Wow, this is fantastic. You know, another thing that I'll point out is let's see if I've got the chart. I really like to show you guys this chart. Do I have it up? Let's first and foremost go back to I know I've got long-term trends. I had it up here. Where is it? That's the Buffett indicator. Josh, can you No, no, no. We don't have time for that. Bottom line here, guys, we don't have the chart, but that's okay. My point is, did you know that gold was hitting all-time highs during the GFC? So the latter part of 2008 going into 2009, gold was hitting all-time highs as the whole entire world was crumbling and we had disinflation and Q2 Q2 of 2009 we had actual deflation. I think it was negative.4. So we had a quarter of deflation and from the end of or you know the summer of 2008 going into 2009 we had disinflation disinflation disinflation disinflation disinflation disinflation and then Q2 we have bam goes negative actual deflation and what was gold doing during not the entire time but what was gold doing in the latter parts of 2008 going into 2009 even during in Q2 of 2009. Answer: All-time highs. All-time highs. So, don't think that just because we go into a recession or just because we might have some disinflation or maybe even deflation that gold will go down. No. Go. Gold really doesn't react to inflation. It's contrary to popular belief. It's really more so about the confidence in the global economy, the confidence in geopolitics, and the confidence in the monetary system because it doesn't have any counterparty risk. So, that's something we have to watch out for. Although, I will say that if we have a liquidity event, a liquidity crisis, then you're going to see a dip in gold. You're definitely going to see a dip in gold. But that doesn't mean that when you come out of that that gold isn't going to continue to go up to all-time highs. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. We'll see you on the next video.
New Inflation Data Just Changed Everything
Summary
Want the cheat code to protect and grow your wealth? Check out Rebel Capitalist Pro https://rcp.georgegammon.com/pro.Transcript
Hello fellow Rubble Capitals. Hope you're well. So, we had the new PPI data come out this morning and it was, drum roll please, negative month over month. That is correct. Negative. So, what this means for the Federal Reserve is the probability for a 25 basis point cut or a 50 basis point cut has skewed massively. Now, what's interesting is what's going on with the CME and this Fed watch because they're not really adjusting the probabilities to a significant degree. And I think I don't like to make too many predictions on this channel, but I think especially if we get a weak CPI number or below expectations tomorrow, well, that's the big print, that the that that is going to change everything as far as the Fed's calculation on whether or not they're going to lean more toward the 25 basis point cut or more toward the 50 basis point cut. Because up until now or up until yesterday, uh especially up until last week prior to getting the non-farm payrolls, everyone was saying, "Oh, it's just 20." In fact, they were saying it's either 25 or a pause. Like 50 wasn't even on the bingo card for the well, for most people, the mainstream media, let's say, wasn't even on the bingo card. Wasn't even a possibility. And all of a sudden, as we get more and more data, it's like the probability is going straight up. Are no certainties, only probabilities. But what we're talking about here is the big change in the probabilities. Okay, so let's go over to Well, let's go over to the BLS report and here's the punchline and then we'll go over to Zero Hedge. I made fun of Zero Hedge today and I always poke fun at them because they are like the go-to place for inflation, inflation, inflation, stagflation, hyperinflation. We're going to have hyperinflation. The dollar's going to crash. It just every single article is hyperinflation, hyperinflation, inflation, inflation. And then of course today they're making fun of the Marxists over at the University of Michigan for being wrong about inflation. And I love the guys over there. I'm like, "Come on, guys. Come on. You can't make fun of other people for predicting inflation come from zero hedge." And that'd be like Peter Schiff making fun of people for predicting inflation or that the dollar is going to crash or something. I mean, come on. Come on. All right. Anyway, getting to the data. So, right here, guys, you can see the producer price index edged. >> You need to share your screen, George. >> And by the way, when they say edged down, that's a nice way of saying negative. Okay, so getting back to this here. So, right here, producer price index for final demand edged down.1% in August. seasonally adjusted. Okay, so.1%. And what was really wild is the services component of that which I think is probably more important than the goods was down [Music] see final demand for services down negative.2 so negative.2 2 on the services and then a 0.1 on the goods. But regardless, this was way below expectations. Way below expectations. Let me show you what I'm referring to. We're going to go over to the calendar and let's zoom in a bit for you guys. There we go. So, Wednesday, we see that the month-over-month for the PPI was expected to be.3. That's a big miss. Big miss. And last month, by the way, it was a.7. So, we've gone from a.7 to a negative.1. I mean, then then you've got to kind of ask what all the guys and gals are doing that were screaming and yelling stagflation, stagflation, stagflation, stagflation, stagflation. And you guys remember on this channel I've said I'm blue in the face that although sure you can have months where the CPI or the inflation numbers are higher than expected but if you have a recession where you have a spike in unemployment a big softening in the labor market you you you don't get an acceleration of inflation just it's not a thing. Even in the 1970s, the inflationary decade of stagflation, when we had a recession and when the unemployment rate really spiked up and the labor market softened, we had disinflation. We did not have the CPI going higher and higher and higher and higher and higher, contrary to popular belief. And the reason is actually quite simple. Because if wages aren't going up, even if prices go up, that decreases aggregate demand. and then you just have everything rolling over. It's like in during the GFC when oil prices were going up to 120 130. Sure, that created short-term consumer price inflation, but what that did is it made the consumer rob Peter pay Paul along with everything else that was going on. So, that actually was probably one of the catalysts that led to the actual disinflation and deflation that we got going into 2009. All right, but getting back to this here, we've got core, that's less food and energy at.3. So, I think that's probably why the CME, the Fed watch didn't really change that much. But I think what we have to do is not just focus on the CME, the Fed watch, but we also have to look at the two-year Treasury versus the Fed funds rate to really think through, okay, are the probabilities shifting? And then the big numbers tomorrow. So, tomorrow they're expecting a.3. Now, what's interesting, what's really interesting is I was listening to one of my favorite podcasts. I'll give him a shout out. It's um uh the Macro Trading Floor. I don't even know the name of it because it always just pops up on my iTunes. My buddy Macro Alf, he's he's awesome. And the guy he does it with is really good, too. Brent Donnelly. And it's called the Yeah, the macro trading floor. And what Brent was talking about on the last episode is this anomaly where usually the CPI comes out before the PPI. I didn't know this. I had no idea. and he did a um kind of some statistical research and he found that often there's a pretty good correlation between the PPI and the CPI as far as whether they come in below or above expectations. So in other words, if the PPI is below expectations, then there's I'm just throwing out numbers just for the sake of the example, then there's like a 75 or 80% chance that the CPI it also is under expectations. And but usually you have the CPI first, which is the more important number, but for whatever reason, I'm not really sure why, uh they do they did the PPI first for this month. So, I think if if Brent's right, which I'm sure he is, I mean, he's a really smart guy and I'm sure he did his homework, but just uh taking him for his word, then you would expect the probabilities of the CPI tomorrow coming in less than expected uh expectations, which is.3 is extremely high, extremely high. And same thing obviously with year-over-year. So I mean look at this in fact the PPI the expectation was.3 and for tomorrow the CPI is.3. So if PPI can come in negative.1 I I it's it's it's above zero possibility the CPI could come in negative and if that comes in negative then uh I can assure you the odds of the 50 basis point cut instead of the 25 basis point cut are really going to skyrocket even if they just kind of gradually nudged up today. So, let's go over I want to go to the twos and 10 or excuse me, the twoyear Treasury and Fed funds because most of you guys know from watching my videos, the the Fed funds really follows the two-year Treasury. If you look at a going back, you know, 40 years or so. And so, that gives us a a read kind of on what the Fed's going to do. It kind of we can isolate the signal through the noise. But before we get there, let's go over to Fed Watch. And and quite frankly, I was really surprised when I looked at this this morning. Really surprised because yesterday we were at a 7% chance of a 50 and today we're at uh 9.9, basically 10%. And I think that's because there's this narrative where the Fed really pays a lot more attention to core um than the uh headline number, but I I don't know how accurate that is, especially when you combine this with what's happening in the labor market, the downward revisions to not just the non-farm payrolls from the last few months, but this huge massive benchmark revision that we talked talked about yesterday where they revised down almost a million jobs, almost a million jobs from April 2024 to March of 2025. But let's get over to this chart that I actually, you know, I give the Fed a lot of a lot of crap, but I I I do need to give them props. The Fred website is fantastic. It is really a great great resource and a fantastic tool. Now you can argue about the data but the website itself is really great. So hats off to the people who run the FRED website because you can do you can customize charts, you can make them different colors. I mean it's it's really an awesome awesome tool. But anyway, let's zoom in. Okay, there we go. So, the blue line is the 2-year Treasury and the red line is Fed funds. What I want you to notice, if I could Oh, it's kind of hard to Well, let me just You're forget my pointer. It's too difficult to highlight the line. Just notice that usually you have the blue line go first and then you have the red line go. And so, uh, let's see. As an example, we're going to go right here is a good example. Um, right here is a great example. There we go. So you can see that blue line really start to go down and then uh Fed drops and then we have the blue line if I can highlight it. There we go. All right. Right here prior to do the blue line really starts to go and then what happens afterward? The red line follows. We go over to the GFC and as you would expect it is the exact same thing. Blue line leads, red line follows. Same thing during the surveys sickness, by the way, right here. Right there, you see the blue line really start to go down. In fact, the blue line was going down as the Fed was increasing rates, saying, "Ah, yeah, I don't think so. I don't think so." Now, more recently is what I want to focus on right now is we had the two-year Treasury really start to go down and the Fed is just, let's say, behind the curve, no pun intended. And it got to a point where the Fed dropped down to the 2-year. This was right around February of 2025. But since then, we see the exact same dynamic. the Fed pauses and the two-year the blue line just goes down further and further and further and further. And if history is a teacher, you would have to expect that sometime in the near future, maybe not this Fed rate cut, but sometime in the next 6 months or so, the red line is going to meet up with that blue line once again. And so the question becomes, is the red line going to meet up with the blue line by the blue line going up, which rarely ever happens, or is it going to meet by the red line going down, which happens 95% of the time. So my money would be on they're going to meet up, but it's going to meet up by the red line going down. So then what we have to do is we have to go over to the two-year Treasury and see where it's trading right now. And as you guys can see, 3.54. Now, I'd like to remind you that right now the Fed funds rate is 4.33. So, we're looking at a 80 almost an 80 basis point delta. So, even if the Fed dropped 50 basis points, they're still not down to the 2-year Treasury. I mean, and and I don't want to toot my own horn here, but how long have I been saying on this channel that not that the Fed really matters and I I'm you guys know my position on the Fed and their balance sheet and, you know, their ability to control the economy or lack of ability to control the economy, but I've always said that if I was the Fed, I would definitely be cutting rates here if I if I had a dual mandate and I was a a PhD economist and I was at the Fed and I had their worldview and I used their framework. Again, not that I do, but if I did, I I would definitely be cutting rates because they have this quote unquote dual mandate where it's all about the labor market over here and inflation over here. So, if there's more risks to inflation, then you're going to be hawkish. If there's more risks to the labor market, then you're going to be doubbish. And I mean almost I don't know how long I've been saying this what you guys know probably better than I do but at least 6 months where I'm or at least since they paused I'm like no the the Fed should be cutting that this is there's way way way way way more risk to the labor market getting weak and becoming increasingly weaker than inflation going let's just use the CPI as a proxy going from 3% to 6% to 8% to 9% % the 20% like all the people out there in team stagflation land uh like to lead you to believe, right? It's all about narrative versus reality. And if you want to build your portfolio around narrative, well, go nuts. You know, it's all about stagflation and the dollar is going to crash into oblivion and you know, whatever. You guys understand the narrative, right? But if you want to look at reality, the reality of the situation is that if you believe the economy is slowing and if you believe the labor market is getting very very weak and we would likely be in an environment where we're going to see the unemployment rate spike substantially or even let's say a lot of job losses because the unemployment rate would include the labor force participation. So, let's just say a lot of job losses, then then you have to believe that we're going to have disinflation. Now, are the numbers accurate? No, of course not. But I'm using it as a trend. So, I'm not saying that the real rate of inflation is 2.7%. Or wherever the CPI is. It's higher than that. Sure, absolutely. I totally agree. But we have to look at the trend. Um, I would also argue that we the inflation rate today is much lower than it was in the summer of 2022. Much lower. Um, even though it's higher than the data that we're receiving from the BLS. Again, all about the trend. And if you believe the economy is slowing, if you believe the labor market is softening, if you believe the unemployment rate is going to go up, we're going to have mass job losses, then you also have to believe we're going to have disinflation. The the stagflation or the acceleration of inflation or consumer prices while the job market is plummeting, that that doesn't work. It it's it's really it's it's not a thing. And it's not really the Phillips curve. It's different than that. And again, if you don't believe me, just look at the 1970s and look at the recessions we had then. Look at the unemployment rate and look what happened to the rate of inflation. Always goes down. Okay, but getting back to this here. So, we've got the PPI, we've got the CPI, that's going to be absolutely huge. We've got initial jobless claims tomorrow. Uh, that's projected to be 235. be very interesting to see what that comes in at um especially after we have seen the non-farm payrolls and the benchmark revisions that we were talking about yesterday. Okay, now let's go over to the 10-year and down at 4.05 05. So that is a decrease of call it 55 basis points this year alone. So again, my point here is that if I'm the Fed, I I'm I'm looking at the risks involved here, and I think the risk to the labor market is far far far greater than the risk of inflation just going straight back up to 9%. Uh using the CPI a proxy for that like we had in the summer of 2022. Look at the 30-year Treasury. Whoops, that's not it. 30-year Treasury right here, trading at 4.69. 4.69. And by the way, the Fed funds is at 4.33. So, we've got a 30 basis point spread between Fed funds. And oh, by the way, the 10-year Treasury is inverted. When you look at Fed funds, it's 30 basis points lower. So th this is not this is not what you would have in stagflation. I assure you in stagflation if the Fed was at 4.3 the 10-year Treasury would be at eight. If we we if we had stagflation or we are going into an environment where the uh 10-year Treasury would likely be accelerating. But the big takeaway here, guys, is we're going to really, really have to watch the CPI number tomorrow. This is going to be huge. Lot of very, very important data. So, make sure you stay tuned to the Rebel Capitalist channel because we'll not only give you the data, but give you the analysis that you need to make a a thorough uh calculation, let's say, as to what you should be doing with your portfolio based on your own framework. And that's going to be different for every single person out there. I had a couple people mention gold. I almost forgot. Let's go over to the GDXJ because man oh man, do you want to look at a good looking chart. Wow, this is fantastic. You know, another thing that I'll point out is let's see if I've got the chart. I really like to show you guys this chart. Do I have it up? Let's first and foremost go back to I know I've got long-term trends. I had it up here. Where is it? That's the Buffett indicator. Josh, can you No, no, no. We don't have time for that. Bottom line here, guys, we don't have the chart, but that's okay. My point is, did you know that gold was hitting all-time highs during the GFC? So the latter part of 2008 going into 2009, gold was hitting all-time highs as the whole entire world was crumbling and we had disinflation and Q2 Q2 of 2009 we had actual deflation. I think it was negative.4. So we had a quarter of deflation and from the end of or you know the summer of 2008 going into 2009 we had disinflation disinflation disinflation disinflation disinflation disinflation and then Q2 we have bam goes negative actual deflation and what was gold doing during not the entire time but what was gold doing in the latter parts of 2008 going into 2009 even during in Q2 of 2009. Answer: All-time highs. All-time highs. So, don't think that just because we go into a recession or just because we might have some disinflation or maybe even deflation that gold will go down. No. Go. Gold really doesn't react to inflation. It's contrary to popular belief. It's really more so about the confidence in the global economy, the confidence in geopolitics, and the confidence in the monetary system because it doesn't have any counterparty risk. So, that's something we have to watch out for. Although, I will say that if we have a liquidity event, a liquidity crisis, then you're going to see a dip in gold. You're definitely going to see a dip in gold. But that doesn't mean that when you come out of that that gold isn't going to continue to go up to all-time highs. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. We'll see you on the next video.