Economic Commentary No. 1454

• 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