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Economic Commentary No. 1454

(SGS Subscription required) • Deepening Economic Woes and Soaring Inflation Ahead
• Underlying Economic and Labor Numbers through November Indicate Contracting or Flattening Fourth-Quarter 2020 GDP, Well Shy of Economic Recovery
• On Top of Downside Revisions, Declining November Real Retail Sales Showed Renewed Economic Deterioration
• November New-Home Sales Collapsed by a Meaningful 11.1% (-11.1%) in the Month, On Top of Major Downside Revisions to Sales in Each of the Prior Three Months
• November Industrial Production and Its Dominant Manufacturing Sector Showed Deepening Year-to-Year Declines, While the Mining Sector Showed a Narrowed Annual Plunge, Thanks to Rising Oil Prices
• Federal Reserve Sees Continuing Need for Inflation-Boosting Monetary Stimulus, With No Economic Recovery Expected Before 2023
• Continuing Massive Expansions of Federal Government Deficit Spending and Federal Reserve Monetary Stimulus Promise Massive Inflation
• Liquidity-Strapped Consumers Move to Cash, Spiking Traditional Money Supply M1
• Minimizing Reporting of Such, the Fed Just Redefined Money Supply M1; Given Newly Defined M1-Like Liquidity Characteristics for M2 Savings Deposits, Savings Have Been Shifted Retroactively from M2 to into M1, Effective as of May 2020
• Redefined November Money Supply M1 Just Jumped from 31.7% to 92.7% of Total M2; November 2020 Year-to-Year Growth in the Traditional Money Supply M1 Soared to a Record 53.2%, the Redefined New Series Reflects a Record 348.4% Jump
• Weakening U.S. Dollar, Rebounding Gold and Oil Prices Foreshadow Rising Inflation

Economic Commentary No. 1453

(SGS Subscription required) • Four Million Unemployed People Are Missing from the Headline Labor Force
• Pandemic-Disrupted U.3 Unemployment Effectively Was 9.0% in November 2020, Not the Headlined 6.7%
• November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity
• For the Second Straight Month, Payrolls Declined Year-to-Year by 6.0% (-6.0%)
• Theoretically Equivalent Third-Quarter 2020 GDP (Product) and GDI (Income) Rebounded by Varying Annualized Quarterly Gains of 33.1% and 25.5%, Still Holding Far Shy of Economic Recovery
• Unprecedented in 40-Plus Years of Weekly Monetary Reporting: Money Supply M1 Jumped by 14.1% in the Last Two Weeks, in a Post-Election / COVID-19 Flight to Cash, From M2 to M1
• Year-to-Year Gain in Monthly November M1 Jumped to a Record 53.2% from the Prior Record of 42.3% in October, Surged to 65.6% in Week-Ended November 30th
• The U.S. Dollar Is at Its Lowest Level Against the Swiss Franc Since January 2015, Down by 10.0% (-10.0%) Year-to-Year A Weak Dollar Is Highly Inflationary for the United States and Bullish for Gold
• Collapsed Oil Prices Still Suppressed November CPI and PPI Annual Inflation; Yet, Oil Prices Suddenly Are Surging Anew
• Holding Physical Gold Protects the Purchasing Power of Dollar Assets, Irrespective of Any Near-Term Volatility in, or Manipulation of, Gold Prices

Flash Commentary No. 1452

(SGS Subscription required) • October 2020 Cass Freight Index® Turned Positive Year-to-Year, Gaining 2.4% Against an Unusually Sharp, Unseasonable Decline the Year Before
• Such Was the First Annual Gain in Freight Activity Since November 2018, When Excessive Fed Tightening Was Being Used to Constrain Consumer Liquidity and Domestic Economic Growth
• Where Pandemic Forced the Shutdown of the U.S. in March 2020, FOMC Rate Hikes Already Had Strangled Business Activity
• October Industrial Production Continued in L-Shaped Recovery, With Annual Change Flattening Out in Negative Territory
• Annual Boom of 5.7% in October Real Retail Sales Was Not Credible; Related Retail Employment and Consumer Goods Production Continued in Annual Decline, Despite the Gain in Freight Activity
• On Top of an Upside Revision, Housing Starts Gained 4.9% in the Month; This Was Not Statistically Significant at the 90% Confidence Interval
• On Top of a Downside Revision, October Building Permits Monthly Change Flattened Out at a Statistically Significant 0.0%

Flash Commentary No. 1451

(SGS Subscription required) • Positive News on COVID-19 Vaccines and Treatments Rallied Stocks to Pre-Pandemic Peaks
• Pandemic-Related Structural Damage to the , However, Promises a Troubled Recovery, With Meaningful Fiscal and Monetary Stimulus Likely Continuing Beyond 2021
• FOMC Will Maintain Its Emergency Monetary Expansion For the Duration of the Economic Crisis, Looking to Boost Inflation
• At Historic Highs, October 2020 Money Supply Continued to Surge
• With Presidential Election Results Under Challenge, Political Uncertainties Can Roil the Financial Markets
• Democrat Control of Both the Congress and Executive Branch Would Threaten U.S. Dollar Stability and Exacerbate Inflation Risks
• October 2020 Employment Growth Continued Faltering in an L-Shaped Economic Recovery
• Headline October Inflation Remained Muted by the Oil-Price War
• Third-Quarter 2020 Trade Deficit Was Worst in History

Flash Commentary No. 1450

(SGS Subscription required) • Economic Rebound Continues to Falter
• Advance-Estimate, Third-Quarter 2020 GDP Growth Exploded at an Unprecedented, Annualized Real Pace of 33.08%
• The Third-Quarter 2020 GDP Annual Year-to-Year Decline Also Narrowed to 1.78% (-1.78%), from 9.03% (-9.03%) in Second-Quarter 2020
• Third-Quarter GDP Activity Held Well Shy of Recovery, Even Though It Rebounded Sharply from a Record Annualized 31.38% (-31.38%) Second-Quarter Plunge
• The Level of Real, Inflation-Adjusted Third-Quarter GDP Was the Lowest Since First-Quarter 2018
• Unlikely Annualized Fourth-Quarter 2020 Real GDP Growth of 15.2% Still Would Be Needed for a Full Economic Recovery This Year
• Instead, Key Monthly Economic Series Have Been Locking Fourth-Quarter Activity Into a Faltering, L-Shaped Recovery