In August, U.S. consumer spending saw an uptick, but the underlying inflation trend showed signs of moderating. The year-on-year increase in prices, excluding food and energy, dipped below 4.0%.

Driven by surging gasoline prices, the inflation rate, as measured by the personal consumption expenditures (PCE) price index, climbed by 0.4% in August, following a 0.2% increase in July. Over the 12 months leading up to August, the PCE price index rose by 3.5%, slightly up from the 3.4% recorded in July. It’s important to note that this annual PCE inflation is influenced by a lower base of comparison from the previous year.

Market Reaction:

• Stocks: U.S. stock futures expanded gains following the release of the August PCE data.
• Bonds: The yield on the U.S. Treasury 10-year note continued to decline, reaching 4.5363% after the data was published.
• Forex: The dollar index experienced increased losses in the wake of the data.

Comments:

US sanctions are like a self-inflicted wound. They inflict more pain on us than on our adversaries.

Higher prices for consumers and businesses in the US

Job losses in the US

Damage to the US’s reputation as a reliable trading partner

Reduced US economic competitiveness

Bitcoin is a decentralized digital currency that is not subject to the control of any government or financial institution. This makes it a potential mechanism to avoid the politics of money.

The politics of money refers to the way in which governments and financial institutions use money to achieve their own goals. This can include using money to reward supporters, punish opponents, and influence public policy.

Bitcoin can help to avoid the politics of money in a number of ways. First, it is not subject to the control of any government or financial institution. This means that governments cannot use Bitcoin to reward supporters, punish opponents, or influence public policy.

Second, Bitcoin is transparent and auditable. All Bitcoin transactions are recorded on the public blockchain, which means that anyone can see them. This makes it difficult for governments and financial institutions to engage in corruption or other forms of financial misconduct.

Third, Bitcoin is global. It can be used by anyone anywhere in the world. This can help to reduce the power of governments and financial institutions over individuals and businesses.

Of course, Bitcoin is still a relatively new technology, and it is not yet clear how widely it will be adopted. However, it has the potential to revolutionize the way we think about money and to help us to avoid the politics of money.

Here are some specific examples of how Bitcoin can be used to avoid the politics of money:

• Sending and receiving money without censorship: Bitcoin can be used to send and receive money without censorship from governments or financial institutions. This can be useful for people who live in countries with repressive regimes or who are otherwise unable to access traditional financial services.
• Making payments without government surveillance: Bitcoin transactions are not subject to government surveillance. This can be useful for people who value their privacy or who live in countries where the government is known to monitor financial transactions.
• Protecting against inflation and currency devaluation: Bitcoin is a scarce asset with a fixed supply. This makes it a hedge against inflation and currency devaluation. This can be useful for people who live in countries with high inflation or unstable currencies.

Overall, Bitcoin is a promising new technology that has the potential to revolutionize the way we think about money and to help us to avoid the politics of money.

the very divided nature of US politics is likely to weigh on the economy for decades. Political polarization can lead to a number of negative economic consequences, including:

• Gridlock and inaction on important economic issues: When the two major political parties are unable to agree on anything, it can be difficult to pass meaningful legislation that could help the economy. This can lead to missed opportunities for growth and job creation.
• Uncertainty and instability: Political instability can create a climate of uncertainty that can deter investment and economic growth. Investors are more likely to invest in countries where they believe the government is stable and predictable.
• Increased spending on national security: Political polarization can lead to increased spending on national security, as the two parties compete to show that they are tougher on foreign policy. This can divert resources away from other important investments, such as education and infrastructure.
• Damage to the US’s reputation as a global leader: Political polarization can damage the US’s reputation as a global leader. This can make it more difficult for US companies to do business overseas and can attract less foreign investment to the US.

In addition to these economic consequences, political polarization can also lead to a decline in social cohesion and trust. This can make it more difficult for Americans to work together to solve common problems, which can further harm the economy.

There is no easy solution to the problem of political polarization. However, it is important to be aware of the potential negative economic consequences of polarization so that we can take steps to mitigate them.

Here are some things that can be done to address political polarization:

• Promote education and critical thinking skills: Education can help people to understand different perspectives and to think critically about the information they consume. This can help to reduce prejudice and stereotypes, which are often at the root of political polarization.
• Support independent media: Independent media can provide a more balanced and objective view of the news than partisan media outlets. This can help people to make more informed decisions about politics.
• Encourage people to engage in civil discourse: Civil discourse is essential for a healthy democracy. It is important to be able to have respectful conversations with people who have different political views.
• Support reform of the political system: There are a number of reforms that could be made to the US political system to make it more representative and responsive to the needs of the people. These reforms could help to reduce political polarization and improve the economy.

Shayne Heffernan