i'm very frustrated.

hey by the way quick shout out to Mr T

who came out and flew with me yesterday

as we explored real estate in Salt Lake

City if you two want to join this by the

way a course member of ours if you want

to join either the courses or a

shadowing experience check out the link

down below we'll see you soon all right

I have to say I am so frustrated about

the silliness that people say on the

internet when it comes to inflation

people are saying things like oh wow

since when did inflation go into 6.5

percent become bad news

oh my God it's like economics 101 is

missing from people's brains nobody is

saying that it is good news that

inflation is 6.5 but let's understand

what Nick T has said with the Federal

Reserve has had to say and some of the

other very important things that we need

to focus on first you have to understand

that much like the real estate market

inflections are what matter in economics

you could be right here and if you

compare year over year you might be

comparing to here and that growth might

be 6.5 but if you compare here to here

that growth could be negative and

eventually in the future when we're

let's say over here at the Green Point

and we compare to a year ago in the

future now all of a sudden we might

actually the year ago in the future

might sort of be like that we might be

looking at negative three percent

inflation this is why structural trend

and changes matter this by the way is

exactly the same thing we're seeing in

the real estate market in the real

estate market you're seeing home prices

down 10 to 15 percent off peak yet

what's actually happening is you look

year over year and you still see a lot

of cities positive right but it's just a

matter of time before we roll over on

that year over year comparison it's

basic Eco 101. of course then you have

the clowns that come out and say things

like oh well inflation can't go positive

or inflation can't come down that is

because after all China is going to

reopen so I sent this tweet here and I

said inflation can't like the other

people right inflation can't come down

because China will reopen and I'm like

uh China has been open for 37 of the

past 40 disinflationary years that we've

had in other words China has been quote

unquote open for the last 92.5 of

disinflationary years that we've had

over the last 40 years

but yet the clowns are like no no this

time's different if China reopens that's

it that's it China reopens big inflation

let's be real the inflationary problems

we had was not caused by

transitory U.S reopening it was caused

by Insane and stupid money printing it

was caused by a war in Ukraine that was

not expected and it was caused by a

complete rejiggering of Supply chains

around the world yet today companies

like Samsung and taiwan's semiconductors

are saying the supply chain snarls are

almost over Taiwan semiconductors

literally today is up six percent on the

news that they are almost done with the

supply chain issues regardless of what

happens with a Chinese reopening so

these arguments that people have that oh

no 6.5 inflation is is uh is somehow

still bad news is ridiculous we are on a

really good path for inflation

plummeting there's a reason we had

Hawker from the FED come out this

morning say all right we're probably

looking at uh you know basically uh 25

basis point hikes and there's a reason

the bond market is not only pricing in a

25 basis point hike maybe I mean

probably at this point once in February

maybe again in March or even a pause and

then the bond market prices in 1.7 in

rate cuts by the end of 2023 and the

bond market price is in five percent

that means going back to zero within the

next few years okay there's a reason

because inflation is plummeted now some

other people have this like counter

argument and somehow they think that oh

but Kevin

you're only thinking inflation's going

down if you take out housing well I'll

have you know housing's like the most

important part of people's expenses

duh okay duh yes yes people spend most

of their money on housing yes that is

true but the Chicago or sorry the

Cleveland fed themselves is well aware

of the massive lag that you get in

inflationary housing data that's because

they literally ask owners by picking up

the phone going hey what do you think

you could rent out your house for today

and you get a 6-12 month lag in when

people actually adjust what they think

their rent is worth to what the market

actually is in fact here it is I'll

provide the facts to you the Cleveland

working paper series that they just

released here in December of 2022 and

this is something that Jerome Powell

himself has referenced clearly clearly

shows that when we look at CPI rent CPI

rent the purple line is going up but all

other actual leading indicators of rent

whether you look at loopnet yardy a

basket of these put together Zillow

rents doesn't matter all of them are

trending down while the CPI report one

is still trending up it's just a matter

of time before the CPI reported flexed

down and then guess what huge anchor to

inflation now then of course you have

people that are like

it's not just how they uh actually it is

mostly just housing in fact the Bureau

of Labor Statistics literally said that

themselves they literally wrote The

Shelter index was the dominant factor in

the monthly increase in the index for

all items less food and energy

that's core okay shelter in fact they

said accounted for more than

half of the total increase of core

inflation and core services in fact you

even have the federal reserve's

mouthpiece Mr Nick t uh from The Wall

Street Journal look what Mr Nikki T had

to say this morning on Twitter December

CPI three-month annualized rates core

Goods negative 4.8 percent deflation

Services less shelter just

1.2 percent annualized well under the

two percent fed goal what's the only

area that's still exploding

shelter of 9.2 percent annualized that's

insane but the Cleveland fed themselves

says that number is getting ready to

plummet now of course the FED is

cautious right because they have to be

because as soon as they start saying oh

inflation is plummeting then everybody

throws in the towel and starts going out

and spending money again because fear

goes away so the FED has to keep on the

face of fear but the bond market is

being crystal clear in how it's

screaming to us the more the yield curve

inverts the more the Federal Reserve is

going to end up cutting rates in the

face of inflation falling on top of that

the bond market today is screaming to

you and saying look yields plummeting on

the 10-year under 3.5 percent why

because the days of rising inflation and

shocks to the upside inflation are over

and behind us so personally you get

frustrated when people are like oh but

but

then inflation minus food and minus

housing isn't fair because most people

spend most of their money on food and

housing

duh and eggs too we get it but the

leading indicators for actually a basket

of most food in the world and housing or

plummeting so that means it's cheaper to

rent stuff today it's just the reports

don't show it yet ah now I'll tell you

exactly why the Federal Reserve is doing

this if the Federal Reserve right now

came out and told you what the bond

market was expecting the FED to do which

generally the FED does what the bond

market suggests the FED does anyway it's

kind of crazy although they try to

manipulate each other

If the Fed right now came out and said

hey yeah we're probably gonna cut rates

by 1.7 percent by the end of 2023 and uh

we'll cut rates by five percent over the

next few years that's what the bond

market is telling us

If the Fed said that right now what do

you think would happen

every person and their mommy and their

daddy and their granny would go out and

spend money on debt they'd borrow they'd

go into margin debt to buy stocks

everybody would just YOLO on everything

they'd go buy new cars they'd go buy a

jet they'd go buy a new house everyone

would just go not spending money again

and then guess what boom inflation pops

back up fed loses all credibility that's

why they're keeping the hard face on

because they have to they don't trust us

they're putting the hard face on and

they're treating us like little dirty

brats like little step children not that

there's anything wrong with step

children okay I've had a lot of Step

siblings myself anyway they're trading

us like children

because they don't trust us not to go

blow it

and they're probably right

In fairness they're probably right kids

look it we would all be having a

freaking field day if they're like we're

gonna cut