- December 13, 2022: November CPI data released
- December 14, 2022: FOMC rates announcement
- We have been seeing COVID-level volatility on monthly opens/closes on the S&P for the last year. These price swings are not normal.
S&P 500 / $SPY
- RSI levels showed oversold and price action reflects what I’ve been observing for weeks: start of another downtrend
- VIX (Volatility Index) also shows an incoming swing up – which usually means prices will go down
- Next week will be particularly volatile for the markets after we get CPI and Fed rate announcements back-to-back
Personal Savings Rate
- Personal Savings Rates are approaching the lowest levels since 2005
- Any lower, and it’ll be the lowest savings rate ever recorded
- This isn’t good considering that Consumer Debt is at an all-time high (see chart below)
- In fact, consumer loans make up a larger market cap than the entirety of the crypto industry
- Clearly consumers are spending their money and it’s going somewhere – but where exactly?
- Here’s a hint: when was the last time you bought a product made in the USA?
Wages, Inflation, and Savings
- Wage growth is down
- Savings are down
- Inflation is down – but only relative to its peak at around 9% – inflation is still 7.7%
- Inflation rates still outpace wage growth and personal savings rates
- After the creation of the Federal Reserve in 1913, the US Federal Government has been keeping track of consumer purchasing power.
- This is where we are today – a ~96% drop from ATH
- The index hasn’t been able to make a higher-high since 1956
What does all this mean?
- No gold standard, no bank reserves – there is literally nothing stopping banks and the Fed from continuing to devalue the dollar
- Leverage, margin, loans, credit – all these concepts have repeatedly devalued the dollar because of the mismanagement of the money supply
- Everything the Fed has done during COVID lockdowns has permanently damaged consumers and taxpayers – the charts above speak for themselves
- If savings are at all-time lows, debt is at an all-time high, and wages are dipping / can’t keep up with inflation – then where is all the money?
- A crash is imminent