June Federal tax data showed that the market rationale for the rallies in stocks and bonds was just plain wrong.
I wrote about it last night in my regular monthly update of the end of month Daily Treasury Statement. That highly useful publication shows the US Government’s revenues and outlays, line by line, every day. It is real time information, published one day after the fact.
The strength in withholding collections suggests that the economic consensus of tepid nonfarm payrolls growth is too low. If the heavily manipulated BLS number is reasonably close to reality, the jobs number will be much stronger than the market expects.
…On that basis, I must conclude, yet again, that the economy is not weakening. The Fed does not yet have an excuse to lower interest rates or ease policy in any material way.
June Federal Tax Data Warning Isn’t New
But these warnings aren’t new. I have been reporting for months that the rallies in stocks and bonds have been predicated upon a false narrative. The tax data has persistently shown that the Wall Street seers who have been proclaiming month after month that the US economy is weakening and that the Fed must cut rates, are charlatans. Their only purpose is to suck you into handing your hard earned money over to them so that their trading desks have someone to sell to.
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Meanwhile, here’s the withholding tax chart that shows that, far from weakening, the US economy is actually booming. Perhaps overheating is a better word.
I update this chart for subscribers a couple of times each month. It gives us a real time snapshot of just how the US economy is progressing. This is hard real time data. It’s not statistically manipulated by some Federal Agency tasked with making the Trump Regime look good.
Beware! Other Federal Tax Data Is Sending You a Clear Warning Too!
In addition to withholding taxes, I also update individual and corporate income tax, and excise tax collections, illustrated with charts that tell the real story at a glance. If you’re short on time, there’s no need to read carefully. Just look at the charts and you’ll see for yourself.
I also report the US Treasury’s total day to day cash, and chart that for you. That’s particularly useful right now. With the reimposition of the debt ceiling back in March, the Treasury is being forced to spend down all of its cash. By watching the tax flows and Treasury cash levels, we’ll have a really good idea of just when the government will run out of money.
That’s when the political Kabuki Theater will reach a climax and the government will finally raise the debt ceiling. And THAT, my friends, will have devastating consequences for the financial markets. It’s contrary to the conventional wisdom. These reports will explain exactly why that is, and why and how you need to prepare for that eventuality.
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Subscribe by 11:00 PM Pacific Time Friday, July 5 and get the first month free! Get this report and access to all past reports right now. Then read Lee Adler’s Liquidity Trader risk free for 90 days! Satisfaction guaranteed or your money back. Free first month, and 90 day risk free trial offer is for first time subscribers only. Quarterly billing will begin on the 31st day unless you cancel before that date.
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