For over a decade, and even through COVID-19, financial market traders lived in an upside-down world where terrible news was greeted with frenzied buying activity. Like Pavlov’s dogs, investors were trained to buy every dip because bad news was good news – but in 2022’s second half, it looks like a reversion to reality is afoot.

The media spends plenty of time talking about high gasoline prices, but that’s not the only sign of rampant inflation in the U.S. Skyrocketing electricity bills are also problematic for the economy and for the American middle class, and don’t expect relief anytime soon.

Is the U.S. economy resilient, or is it actually falling apart at the seams? Naturally, we can expect a positive spin job from the powers that be. Still, the government can only go so far in stretching the truth when so many Americans are struggling just to get by.

In the long term, all assets will eventually be priced at their fair value. This is the “weighing machine” of the markets. When you’re only looking at short-term price moves, however, sentiment is the main driver and not everything is going to make logical sense.

The path of righteousness is narrow: it’s a Biblical principle that expresses how it’s not easy to stay on the right path and so easy to stray onto the path that leads to inevitable destruction. It’s a timely principle that can easily be applied to today’s central bankers, who have paved a very narrow and treacherous path for themselves.

The truth always comes out, sooner or later. In May, Joe Biden praised high gasoline prices as part of an “incredible transition.” At the time, the price of a gallon of gas reached $6 in California. Now, more of Biden’s innermost thoughts are seeping out, and they’re pointing to endless pain at the pump for Americans.

Be careful what you wish for because you might just get it. In the Federal Reserve’s case, they wanted 2% inflation, and they finally got it – but they overshot, and the economy and markets are now in a tailspin.

If Joe Biden’s goal was to promote equality and close the wealth gap in America, he half-succeeded. The wealth gap is widening, so Biden failed miserably on that front. However, there’s some form of equality because people are getting slammed by inflation across the board.