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This’ll annoy Spud – if he deigns to recognise it

The US economy is poised to make an “immaculate soft landing” from the inflation crisis leaving the British economy behind.

Key US inflation data continued to cool while consumer spending picked up in June, adding to momentum in the economy ahead of the third quarter.

The personal consumption expenditures price increased 3pc compared to a year ago — the slowest pace in more than two years — figures from the Commerce Department showed.

One detail, core, which is what the Fed actually looks at, was 4.1% but still, that’s better than the previous 4.6%.

But how, or why, has the US achieved this?

Well, the Fed raised interest rates earlier, started doing QT earlier, has done more QT… know, all those things Spud has been insisting must not be done?

10 thoughts on “This’ll annoy Spud – if he deigns to recognise it”

  1. The US economy is, I assume, as fiddled as everything else in the Land of the Senile Pedo Gerontocracy, but they have excellent reasons to be more confident than us about the mid term economic future.

    The USA still has access to the cheap, abundant energy the UK and European (and American) governments have driven out of the UK and Europe, so the USA retains a powerful advantage over most of the West.

    They’ll also be able to economically cannibalise their deindustrialising European allies, for a while. Fewer German factories spells opportunity for Americans.

    15 years ago, it would’ve been China taking advantage of their lower operating costs and our ecological insanity, but we’re in a new Cold War with China now. And it’ll probably turn into a hot war before this decade is out.

  2. Is it ‘Immaculate’ because of divine intervention, like another supposedly immaculate event?

  3. @TG: pendantry – it was Mary’s conception, not Jesus’s, that was meant to be “immaculate” (whatever the hell that means).

    P.S. Yesterday I came across a scholarly analysis of whether, in reporting Jesus’s adult life, the NT really says that his mum was called Mary.

    P.P.S. Dear schoolteachers, now I’m grown up I can write “Jesus’s” rather than “Jesus'” if I ruddy well choose. So there!

  4. The RC doctrine is that there is ‘original sin’ created when Eve tempted Adam to eat of forbidden fruit, and which we all inherit through conception. But Mary’s conception was exempt, hence ‘immaculate’. Rather like transubstantiation, this all gets more bizarre the more you think about it.

  5. @ jim
    I hope that you mean that the *reported statistics* on the US economy are fixed, like those on the USSR’s. Those of us old enough to have read Heinlein’s “The Moon is a harsh mistress” will not be surprised (he says that in order to combat communist lies and dictatorship and PR based on false data, he says the west would end up mimicing the USSR)

  6. “I hope that you mean that the *reported statistics* on the US economy are fixed”

    Yes, the ‘official data’ is obviously fixed, either by genuine subterfuge (making up the numbers) or by statistical manipulation – ‘seasonally adjusted’ and changes to definitions etc etc. I seem to remember a few years ago now someone calculating that US inflation would have been 10%+ at a point when the official data was 2% ish if the same way of calculating it from 20-30 years previously had been used.

  7. US soft landing? Get your bridges here. Lovely bridges. Feel the quality!

    Everything is being propped up at the moment by the Fed taking all sorts of dodgy paper as collateral at par in order to prevent more regional banks going Silicon Valley/First Republic. It’s called the Bank Term Funding Program and since it’s start in March has handed out over $100bn.

    Meanwhile, office blocks are already being sold at 20¢ on the dollar, and in real places not just Baltimore, and this thing is only just starting. The Fed is effectively buying the mortgages on these — which are typically non-recourse mortgages — at par, so when the mortgagee looks at their returns and goes “no, have the building back”, the Fed will end up stuck with a load of buildings that they paid way over the odds for: there would be no need to buy commercial paper at par it if wasn’t underwater, so by definition they’ve overpaid. This is way worse than QE because at least with QE they could (and did) run off the bonds — and they only took quality bonds, not junk — and nett out the money creation, but they can’t do that with an office block.

    80% of commercial mortgages are held by the regional banks, is the Fed going to take all of it? That’s over $2.8 trillion, and even Mr Powell wouldn’t be able to keep a straight face while saying that they’re trying to combat inflation while spuffing all that out the door.

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