"FORWARD BIDENCE"

We continue our trip into the Unknown, along with a 2028 Forecast

Houston, we have a problem.

Inflation is still here, and Shrubstack readers know by now that Tamagotchi Yellen short-circuits when Plebl-ation gets closer to 6% (please re-read this piece “Wealth-flation vs Pleb-flation” if you want to understand the origins of the Tamagotchi and the Reaction Function of Central Banks).

We are not quite at 6% yet, but super-core inflation at 4.8% is not far off (and that’s with stripping a bunch of stuff that the Plebs need, so Pleb-flation must be higher)

Incidentally, the one segment of CPI that recorded a drop were car prices coming down. But Yellen went to China to threaten tariffs on Chinese autos so maybe those auto bargains won’t last long. After all, we can’t have those Plebs emitting CO2 in their own cars. The bus or subway will do!

But just today, Producer Price Inflation came out lower than expected, injecting a glimmer of hope to the Fed, the Biden, the Yellen and the Monkeys chasing shiny objects in the markets. I went through the detail and it’s fascinating:

Egg prices are down 29% MoM but chicken prices are up +14%. So the Plebs can finally enjoy an omelette again, but please skip the fried chicken.

But yesterday, an important event happened. While the market was panicking about Inflation and while Yellen was thinking of how to arrest the sharp drop in bond prices, Biden stepped up.

Biden single-handedly changed the regime from “FORWARD GUIDANCE” to “FORWARD BIDENCE” (h/t @jupiters_string you legend).

Biden said “Well, I do stand by my prediction that, before the year is out, there’ll be a rate cut”. He added that Wednesday’s report could delay a rate cut by at least a month. He also added that he was ultimately unsure how the central bank would act… Ok….

BIDEN: “STANDBY PREDICTION FOR RATE CUT.”

BIDEN: “THERE WILL BE RATE CUT BEFORE THE END OF THE YEAR”

On the same day, there was the least shocking “Exposé” ever, where a journalist secretly filmed a Fed staffer who “revealed” that Powell hates Trump. I mean, anyone with 2 brain cells knows that (I have written about the personal motivation of Powell and Yellen against Trump in “Re-Election Cycle”).

My buddy Joseph Wang (@Fedguy12) mentioned in an interview that 95% of NY Fed employee political donations are to the Democrats. He shared this chart:

So, to none’s surprise, Biden has a formitable Re-Election team around him: not just Tamagotchi Yellen, not just Powell, but pretty much the whole Establishment.

So I’ll say it again: The game is Rigged. This is a Re-Election Cycle. The Tamagotchi Yellen is on the loose and she will pull all the levers to keep her candidate in the driver’s seat.

How does it end?

Let me give you my own “Forward Bidence”:

“The year is 2028. President Biden is on his last year in office. The Debt Crisis has escalated into a Currency Crisis. President Biden calls President Milei of Argentina and says he wants to peg the US Dollar to the Argentinian Peso.”

This isn’t financial advice. This is the equivalent of reading MAD magazine for finance but worse: This is the trading blog of a shrub.

Don’t be Stupid. Seriously. How many times do I have to repeat this ….