Tag Archives: Inflation

Davos Men, by Bill Bonner and Joel Bowman

It should be Davos poor-excuse-for-men. From Bill Bonner and Joel Bowman at bonnerprivateresearch.com:

Your moral betters prepare for their annual, world improving confabulation

Bill Bonner, reckoning today from Paris, France…

Paris is gray. But not grim. People are out and about. Face masks have almost disappeared.

But everybody grumbles…and in France, as in America, elite deciders are making everyday life harder. One thing: they’ve banned the use of outdoor heaters, which were ubiquitous in sidewalk cafes. You used to be able to sit outside near the gas heater and enjoy the street life. No more…

Meanwhile, we are working our way through a list of things that can go wrong. The World Economic Forum (WEF) calls it a “polycrisis.” We prefer the half-word “cluster” as it is more descriptive of the disaster to come.

Inflation, for example. The WEF’s Global Risks survey signals higher living costs as one of its near-term flash points. And here’s the latest. CNBC reports:

Inflation just dropped to 6.5%—but the ‘most important’ factor in predicting if it will keep falling is up 0.4%

In Thursday’s CPI report, “services less rent of shelter” showed a 0.4% increase in December. …since wages are “the largest cost in delivering these services,” [Powell] said, that might indicate out-of-control wage growth…

There is “sticky” inflation…and inflation of the Teflon variety. The non-sticky inflation includes things that go up and down readily – such as oil and commodities. The ‘sticky’ inflation comes from things such as wages and shelter, that don’t get marked-to-market on a daily basis.

Yesterday’s numbers tell us that the sticky part may become a tar baby – hard to get rid of. In the ‘services including rents’ category, for example, prices are up more than 7%. Much of that is wages. And nobody takes a wage cut to fight inflation.

Continue reading→

An Economic Candle Burning From Both Ends, by Jeffrey Tucker

The past often dictates the future. It’s no longer a question of if the economy collapses, only when. From Jeffrey Tucker at The Epoch Times via zerohedge.com:

Some facts of our times follow. As you read, consider your own household and portfolios and how they measure up.

Disposable personal income per capita has been in decline in real terms for 19 straight months. This is not just dollar amounts but dollars adjusted for purchasing power. We are just now level with 2019, which is to say that Americans have lost three years of financial progress.

Savings has hit a new low of 3.2 percent, which is where it stood just after the 2008 financial crisis, and this contrasts with 6 percent rates after 1980 and 10 percent average rates in the postwar period.

Credit card debt just jumped to a 20-year high and is still soaring.

(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)

Money, credit, and capital are draining from long-term investments, drying up the venture capitalists and putting a tight credit squeeze on large businesses where firings in the professional sector have already begun.

Inflation is still embedded and this is because consumers have come to expect it and adjust their spending habits accordingly, plus wage costs are rising in sectors like hospitality, retail, and manufacturing.

As an example, the latest housing-price data shows annualized inflation at 15.4 percent year over year, even as the buyers’ market is mostly locked up. That’s the very essence of stagflation: rising prices amidst declining output.

Continue reading→

If You Say Democracy Often Enough the Voters Will Reward You, by Philip Giraldi

The Democrats are hiding behind a word because they’ve got nothing else. From Philip Giraldi at unz.com:

To be sure there is an election coming up today in the United States and President Joe Biden has clearly taken the low road in the lead up to it by speaking before friendly audiences and repeating over and over the bromides that cause the brain to go numb. During the past week it was all about saving “American democracy” from the MAGA barbarians. And Democracy is, inevitably, tied to the Democratic Party etymologically, which, in a sense, makes it the presumed sole possessor of the right stuff when it comes to delivering freedom to all, including most recently a truly delusional pledge by Biden to “free Iran.”

The problem for the president is that Bidenspeak is being seen by some as devoid of content, choosing to skip over any discussion of the actual policies that have benefitted or harmed the American people over the past two years. That omission is convenient as many voters look around and see high inflation, a struggling economy, surging crime rates and an open border that may have produced, according to Tucker Carlson, a tidal wave of as many as five million illegal immigrants in the country. And, of course, there is also the war threatening to go nuclear over the Russian intervention in Ukraine, a conflict that threatens no American interest but which nevertheless has been elevated into a genuine saga of good versus evil through the combined efforts of the US and British governments ably assisted by the western mainstream media.

Continue reading→

Why Bonds Are Behaving Like Risky Assets, by MN Gordon

Bonds are always risky assets. People just forget that after an almost 40-year bull market. From MN Gordon at economicprism.com:

“When the [credit] delusion breaks, people all with one impulse hoard their money, banks all with one impulse hoard credit, and debt becomes debt again, as it always was.  Credit is ruined.”

– Garet Garrett, 1932, A Bubble that Broke the World

Down, Down, Down

Third quarter 2022 ends today [Friday].  We’re entering the year’s home stretch.  Thus, we’ll take a moment to observe where money and markets have been, so we can conjecture as to where they’re going.

To begin, United States stock markets are in an epic battle between bulls and bears.  For most of the year, the bears have been delivering heavy blows.  But the bulls have not taken their punches lying down.  Here’s a quick review of the three major U.S. Indexes…

After peaking out on January 4, 2022, at 4,814.62 the S&P 500 declined 24.46 percent to an interim bottom of 3,636.87 on June 17, 2022.  The DJIA fell approximately 19.71 percent over this time.

The NASDAQ’s decline commenced on November 22, 2021, at a peak of 16,212.23.  It then cascaded to an interim bottom of 10,565.14 on June 16, 2022, for a top to bottom decline of 34.83 percent.

The indexes then rallied into mid-August.  Many investors thought the bear market was over.  They invested accordingly.  But, alas, it was merely a sucker’s rally.  September was ugly.

Continue reading→

What Did We Do About Inflation Before Economists? By John Tamny

Inflation is a currency problem, not a growth problem. Very high rates of growth have occurred with low or no inflation or even deflation. Production increases supply, which lowers prices. From John Tamny at realclearmarkets.com:

What Did We Do About Inflation Before Economists?

(AP Photo/Rick Bowmer)

In their new book America In Perspective, David Sokol and Adam Brandon report that in 1700, what eventually became the United States had a population of 250,000. By 1770 it was 2.1 million. One hundred years later there were 40 million Americans. By 1914, the number had ballooned to 99 million.

What explains the surge of humans from all over the world? It’s a waste of words to answer the question, but for those still a little bit sleepy, the answer to the question is economic growth. Word travels fast on the matter of prosperity. Abnormally fast growth logically proved a magnet for the world’s strivers in search of something better.

Was all the growth a driver of inflation? It’s a waste of words to answer this question too, but the words will be wasted owing to a growing desire among members of the Left and Right to re-define inflation as a consequence of too much “demand” born of, yes, growth. What a laugh.

Indeed, the surest sign the U.S. didn’t have an inflation problem was the growth itself. Figure that the latter is an obvious consequence of investment (not the “demand” bruited by conservatives and liberals who’ve replaced common sense with textbooks), and investment is all about the production of more and more for less and less. Yes, investment is generally about productivity enhancements meant to produce abundantly and cheaply what used to be expensive and scarce. If you’re wondering if an economy is growing, just look at prices. If once pricey items are becoming more and more accessible, you know there’s growth.

Continue reading→

It’s Worse Than Anyone Wants To Admit, by Jeffrey A. Tucker

The economy is worse than the Biden administration will admit, and it’s going to get a lot worse. From Jeffrey A. Tucker at The Epoch Times via zerohedge.com:

The news on July 28 was entirely consumed in the throes of another definition change. What everyone understood is that what it means to be in a recession has been suddenly changed by government edict. It’s not a recession, they say.

The great economist Frédéric Bastiat in the 19th century emphasized that the real costs of policy-inspired destruction is not what you see but what you do not see. (Steve Johnson/Unsplash.com)

Everything is going just great, they say, unless you are among the troglodytes who desire plentiful and low-priced energy, food, housing, and overall human thriving. Once you understand the beautiful world on the other side of the “transition”—to use the favorite word of the White House—you would see this suffering as actually beneficial in the long run.

These broken eggs are making omelets.

We can argue all day about the definition of recession, but it doesn’t take us to the intellectual place we need to be. The bottom line is that what we are experiencing now includes anomalies from previous downturns precisely because it is much worse. Only a few months ago, many worried that we were going back to the 1970s. That box has been checked. Then, we worried we were going back to the 1930s. My fear is that we might wish that were true.

The White House talks about the low technical rate of unemployment without referencing the falling labor participation rates that never recovered from lockdowns because so many people just left the workforce. Millions of previously employed Americans are living off legacy largesse from families or tapping plentiful unemployment benefits just to get by month to month. Real wages and salaries have been slammed, savings rates are sinking, and credit card debt is exploding.

It’s all hard to put in a picture but we can try, nowhere more saliently expressed than the change in real wages and savings, versus savings as a percent of personal income. The stable public data here go back to 1960 and here we see just how shocking these times truly are. Personal savings is half what it typically was from the 1960s through the 1990s, and even as recently as 2012. Real disposable personal income is falling dramatically.

Continue reading→

ShadowStats Visualized


h/t The Burning Platform

In Biden’s Annual Economic Report, The Word “Gender” Is Used 40 More Times Than The Word “Inflation”, by Michael Snyder

Different genders must pay different prices for stuff. From Michael Snyder at themostimportantnews.com:

I think that the phrase “out of touch with reality” doesn’t even come close to describing what we are witnessing here.  We all knew that the Biden administration was completely out of touch with what is going on in Real America, but it appears that things are even worse than we thought.  Right now, inflation is the number one political issue in the entire country, and the persistent shortages that we have been experiencing are right up there as well.  But the Biden administration apparently has other priorities.

The Biden administration has just released the “Economic Report Of The President” for 2022, and you can find it on the official White House website right here.  But unless you are a glutton for punishment, I would strongly advise against reading the entire thing, because it is dreadfully boring.

Continue reading→

Perception vs. Reality, by Michael Snyder

The mainstream media doggedly pursues its mission to make itself completely irrelevant. From Michael Snyder at theeconomiccollapseblog.com:

If you only get your news from the mainstream media, you would be tempted to believe that global conditions are relatively stable right now. Yes, there is a war between Russia and Ukraine, but the mainstream media is assuring us that Ukraine is winning that war. Other than that, the mainstream media seems to think that everything is just fine. Of course the truth is that our planet is facing a whole host of extremely challenging problems at the moment. The UN has warned that we are entering the worst global food crisis since World War II, inflation has started to spiral out of control all over the world, the war in Ukraine is making our supply chain nightmares even worse and an absolutely horrifying bird flu plague is killing millions upon millions of chickens and turkeys.

But if you flip on one of the corporate news channels tonight, they will be focusing on other things.

And you probably won’t even hear them talk about the food riots that have suddenly begun erupting around the world at all.

Continue reading→

Fast-Food Meal Costs Family $100 After They Idle In Drive-Thru For Ten Minutes

From The Babylon Bee:

FRESNO, CA—A local family ended up spending over a hundred dollars on their fast-food meal Monday when they got stuck idling in the drive-thru for ten minutes. Due to high gas prices, what used to be a convenience has turned into a crippling expense for millions of American families.

“Oh no!” exclaimed Suzy Williams as she steered into the drive-thru lane. There were five cars ahead of her. “This is going to take forever! It’s going to cost me a fortune!!!”

She quickly put the car in reverse and was ready to put the pedal to the metal, but another vehicle came from behind and blocked her in.

“NOOOOOO!!!!!” she cried. “I can’t afford this!”

According to sources, the entire family became upset. Suzy’s husband, who’d passively opted for the passenger seat, was now regretting his decision.

“We’re going to go bankrupt!” he grumbled. “If I was driving this would have never happened!”

“Don’t you think I know that!” she screamed. “MOOOOOOOOVE!”

Witnesses report Suzy Williams then laid on her horn as if it would help matters. Unfortunately, it did not. Now the Williams family may not be able to afford rent this month.

The Williams family filed for government assistance later that day, knowing they would continue to experience hardship related to rising gas prices. Unfortunately, their application was denied because they failed to buy an electric car.