Note: Recently took a trip, and drove through through back country America. Poverty, Gambling, Disrepair, Cannabis, Sex Stores, Abandoned Houses, Abandoned Factories. Numberless smaller towns that look like hollowed out shells. The people left behind by the past 40 years of globalized train and brain drain were abandoned by their own country.
Meanwhile, consumer prices rose for a third straight month in June, jumping by 5.4 percent since this time last year. Everything, mainly staples like groceries and energy is putting more pressure many Americans, especially those that are already struggling financially.
The monthly Consumer Price Index, released Tuesday by the Bureau of Labor Statistics, is a broad measure of inflation for goods and services including groceries, airfares, cars and clothing, and shows how quickly prices are rising.
The spin coming out of Washington is that inflationary pressure is due to an economy that is finally recovering from the government’s Covid lockdown policies. There may be some truth to this, but let’s not forget it was policy that created this fine mess.
From the supermarket to the big box store to the gas station, we are paying more to get less. Shoppers are finding limited selection, slower service, longer waitlists, and lots of empty shelves.
Some so-called economists believe the economy needs some inflation to keep going and growing. It’s a dangerous line for policymakers to walk.
May’s CPI data showed that inflation was up 5 percent, the highest monthly increase in 13 years. For families already struggling to pay the bills, any price increase is hard.
Paul Plante says
Goofy old Joe Biden is all over the news feeds today telling us to not worry about inflation, as we see in a Reuters story entitled “Biden says inflation temporary; Fed should do what it deems necessary for recovery” by Steve Holland and Andrea Shalal on July 19, 2021, as follows:
WASHINGTON (Reuters) -U.S. President Joe Biden on Monday said an increase in prices was expected to be temporary, but his administration understood that unchecked inflation over the longer term would pose a “real challenge” to the economy and would remain vigilant.
end quotes
His administration would remain “vigilant,” i,e, keeping careful watch for possible danger or difficulties?
Do tell, Joe.
And what does your administration plan to do if your vigilance shows you are dead wrong, as you are quoted in the CNN story “Biden takes on inflation concerns as domestic agenda hangs in the balance: ‘These disruptions are temporary'” by Phil Mattingly and Kate Sullivan on July 19, 2021, as follows:
(CNN)President Joe Biden on Monday directly addressed concerns that his sweeping economic agenda will serve as an accelerant to inflation amid growing concern about price hikes across the economic spectrum.
“We also know that as our economy has come roaring back, we’ve seen some price increases.”
“Some folks have raised worries that could be a sign of persistent inflation.”
“But that’s not our view,” Biden said, speaking from the White House.
end quotes
If in the first place Joe and his crowd don’t believe inflation is a problem, then what kind of vigilance can we expect from them?
And secondly, will Joe be able to admit he was wrong in the case he is dead wrong and reverse his policies?
No way that is going to happen, people, which takes us back to Reuters, as follows:
“As our economy comes roaring back, we’ve seen some price increases,” Biden said, while rejecting concerns the recent increases could be a sign of persistent inflation.
The Democratic president said his plans to invest more in infrastructure, as well as better care for older people and children, would help reduce inflationary pressures in the future by boosting productivity.
“These steps will enhance our productivity, raising wages without raising prices,” he said.
“It will take the pressure off of inflation, give a boost to our workforce which leads to lower prices in the years ahead.”
end quotes
And there, the goofball sounds like he has been sniffing glue or taking some kind of hallucinogen, because raising wages raises prices and is a direct cause of price inflation, or at least that is a conclusion reached in a technical article entitled “Do Rising Labor Costs Trigger Higher Inflation?” by David A. Brauer in the Federal Reserve Bank of New York publication “Current Issues in Economics and Finance,” September 1997, Volume 3 Number 11, to wit:
Conclusion
The results presented here confirm a link from services sector wages and prices to overall inflation.
We find that if compensation growth accelerates in the service-producing sector, that growth is likely to show up directly as more rapid inflation in service prices.
Moreover, higher hourly labor costs in services can, through their contribution to the production and distribution of goods, indirectly affect goods prices.
Given earlier researchers’ findings showing a link from prices to wages, even these modest initial effects may therefore be enough to set off an inflationary spiral.
Since no such effects are found to arise from an acceleration of labor cost increases in the goods-producing sector, policymakers seeking to prevent a resurgence of inflation may wish to pay particular attention to hourly labor costs in the service-producing private sector.
end quotes
In the meantime, a 19/32-in x 4-ft x 8-ft sheet of OSB Sheathing, which is wood scraps and glue, was selling for $70.87 today, which is patently ridiculous.
So much for no inflation.
Paul Plante says
And while we have on the one hand goofy old Joe Biden telling us, as if he knew anything about it, that an increase in the prices we common folks who are not Joe Biden have to pay for the things we need and use was expected to be temporary, and that his administration, which is the very best administration we have ever had in this country, understands that unchecked inflation over the longer term would pose a “real challenge” to the economy and therefore would remain vigilant, i,e, keeping careful watch for possible danger or difficulties, what are other “market experts” saying about it?
For example, the Rigzone story “Oil Prices Swing Back Upward” by Bloomberg and Jill R. Shah on July 20, 2021, where we had as follows:
“The market has yet to adjust to the idea that the end of the pandemic might not be a clear binary event and it might not be soon,” said Paul Horsnell, head of commodities research at Standard Chartered.
Also, the slowing of monetary and economic stimulus next year will likely hurt growth, Hatfield said.
“We see next year’s economic situation as being dominated by ‘stagflation,’ so that’s not as positive for demand,” he said.
end quotes
Younger people in America who did not live through the seventies are most likely unaware of that word “stagflation,” and so, cannot appreciate the gravity of that comment, which I am sure Joe Biden and the CULT OF JOE would deny is a possibility, but nonetheless, there it is, in plain sight before us, that other point of view from the industry side of things, given that Rigzone is an oil industry publication.
For those unfamiliar with the term, stagflation, which we older Americans who still have functioning memories lived through in the seventies, is defined as “persistent high inflation combined with high unemployment and stagnant demand in a country’s economy.”
And yes, people, it did happen here, and yes, despite anything the goofball Joe Biden might say, it can happen here again, which takes us to a Reuters story entitled “U.S. Treasury yields rebound from 5-month lows” by Herbert Lash and Sujata Rao on July 20, 2021, to wit:
“Equity markets were pricing an explosion of growth and margins over the next two to three years and it’s clear now we won’t have that,” said Ludovic Colin, senior portfolio manager at Vontobel Asset Management.
“We don’t think we will have recession, just long-term growth that won’t be as beautiful as what was expected by investors in the January-March period,” Colin said.
end quotes
Hmmmmm, they must not be drinking the Biden KOOL-AID, or my goodness, they would be raving about how great the economy is going to be in the future as Joe Biden makes America great again (MAGA), which takes us to another Reuters story entitled “U.S. housing starts accelerate, building permits skid to eight-month low” by Lucia Mutikani on July 20, 2021, as follows:
WASHINGTON, July 20 (Reuters) – U.S. homebuilding increased more than expected in June, but permits for future home construction fell to an eight-month low, likely reflecting hesitancy caused by expensive building materials as well as shortages of labor and land.
Though lumber prices are coming down from record highs, builders are paying more for steel, concrete and lighting, and are grappling with shortages of appliances like refrigerators.
Permits for future homebuilding fell 5.1% to a rate of 1.598 million units in June, the lowest level since October 2020.
Permits are now lagging starts, suggesting that homebuilding will slow in the coming months.
The Mortgage Bankers Association Builder Application Survey, which was published on Tuesday, showed mortgage applications for new home purchases fell 23.8% in June from a year ago.
Applications decreased 3% compared to May.
end quotes
But fear not, people, for as we see from the following from that same article, the Biden-istas are all over it, as follows:
Homebuilders and a group of other stakeholders met last Friday with White House officials, including Commerce Secretary Gina Raimondo and Housing and Urban Development Secretary Marcia Fudge, to discuss strategies to address the short-term supply chain disruptions in the homebuilding sector.
end quotes
So that problem is most likely already ended, what with those high-level Biden administration officials on the scene!
Which then brings us to this Reuters story entitled “IMF says Fed ‘highly effective,’ must carefully communicate withdrawal plans” by Reuters Staff on July 22, 2021, to wit:
WASHINGTON (Reuters) – The International Monetary Fund’s Executive Board on Thursday said the U.S. Federal Reserve has been “highly effective” at managing the COVID-19 crisis and supporting recovery with its commitment to overshoot a 2% inflation target in the near term.
end quotes
Overshoot the 2% inflation target?
But doesn’t that mean higher inflation?
Stay tuned!
Paul Plante says
There was some interesting commentary today about inflation and the Biden administration feeding us the BULL**** mantra about “tempoary inflation” in the RIGZONE story “Oil Up On Weaker Dollar” by Bloomberg | Ari Hawkins on August 11, 2021, to wit:
Prices were under pressure earlier in the session after the U.S. called on the OPEC+ alliance to revive production more quickly.
The world’s largest oil-consuming nation has seen gasoline prices firmly above $3 a gallon in recent months, putting pressure on drivers who are back on the road as pandemic restrictions ease.
The coalition agreed last month to restart the remaining offline supplies in careful installments, of 400,000 barrels a day each month.
The tentative pace seemed in line with the market, which has seen prices soften in recent weeks as the delta variant prompts fresh lockdowns in China and other key fuel consumers in Asia.
However, oil prices haven’t come down fast enough to substantially lower retail gasoline in the U.S., which have been at a seven-year high this summer and source of consternation for the White House.
“While OPEC+’s recent tapering helped stop crude’s ascent, for the White House that’s not enough,” said Bob McNally, president of consultants Rapidan Energy Group and a former White House official.
“The Biden administration is under enormous political pressure due to inflation, with galloping gasoline the most publicly visible and vexing.”
end quotes
And oil isn’t coming down – it is marching ever higher, and as it goes, so goes the cost of a gallon of gasoline.
So much for temporary inflation.
Paul Plante says
Talk about inflation impacting on the poor in this country, yesterday, I contacted Amazon after seeing an advertisement in here for Sawzall hacksaw blades which Amazon had listed for worth $21.98.
When I went to order them, I was told that Shipping & Handling for these Sawzall blades worth $21.98 was going to be $26.99, which is just plain stupid as well as being highway robbery on the part of the seller!
Needless to say, the order was canceled.
I’ll do without, or pay the inflated price the local hardware store charges with shipping and handling costing that much now.
Think about it, people – Sawzall blades, a package of which you can hold in your hand that probably weighs a pound or two.
So how can it cost $26.99 to handle and ship them?
Paul Plante says
On another note, there was a local restaurant up this way that was popular with older folks because it was a family setting, the food was good, portions adequate and the prices were quite reasonable.
Whenever I would drive by, the parking lot was always full.
Then recently, they cut back on the serving sizes and jacked up the prices at the same time.
An eight-inch submarine sandwich, a staple for many poor families, went from around nine dollars to over $13, for example.
Now, when I drive by, the parking lot is pretty much empty.
Inflation has cut their throat for them big time.
David L Moore says
SIMPLE….It cost that much because there is an AMERICAN HATING, AMERICA LAST party in charge right now. Next question.
Paul Plante says
REUTERS
“FACTBOX-Key elements of U.S. House Democrats’ tax-hike plans to fund Biden spending”
By David Lawder
SEPTEMBER 13, 2021
TOBACCO TAXES
– Doubles the current rate of excise taxes on cigarettes, small cigars and roll-your-own tobacco.
Taxes large cigars and smokeless tobacco by weight at $49.56 per pound.
These increases would appear to be at odds with Biden’s pledge against raising taxes on people earning less than $400,000.
Paul Plante says
BRIEFING ROOM
Remarks by President Biden on the Economy
SEPTEMBER 16, 2021
East Room
2:00 P.M. EDT
THE PRESIDENT: Good afternoon.
I believe that America, at this moment, is facing such a choice.
And the choice is this: Are we going to continue with an economy where the overwhelming share of the benefits go to big corporations and the very wealthy?
end quotes
Meanwhile, back at the ranch:
CNBC
“Powell orders ethics review after Fed presidents disclosed multimillion-dollar investments”
Thomas Franck @TOMWFRANCK
PUBLISHED THU, SEP 16 2021
Federal Reserve Chairman Jerome Powell directed staff to review the central bank’s ethics rules for appropriate financial activities after disclosures that several senior central bank officials made multiple multimillion-dollar stock trades in 2020, while others held significant investments.
Last week, financial disclosures filed by the Fed’s 12 regional presidents revealed some had actively traded in 2020, while others held million-dollar financial positions without making changes to their portfolios.
Powell ordered the review “because the trust of the American people is essential for the Federal Reserve to effectively carry out our important mission,” the spokesman said.
Documents released last week revealed that Dallas Fed President Robert Kaplan made multiple trades worth $1 million or more last year in individual stocks including Apple, Amazon and Delta Air Lines.
Boston Fed President Eric Rosengren held stakes in four real estate investment trusts and several purchases and sales of similar property-owning vehicles, according to filings.
He also held stock in Pfizer, Chevron and AT&T.
Even the appearance of self-dealing at the Fed could prove problematic to an institution tasked with the impartial oversight of U.S. employment and inflation.
The trades quickly came under scrutiny given the Fed’s critical role in managing the U.S. economy as well as its influence over interest rates and liquidity markets.
The Covid-19 pandemic and ensuing recession magnified the Fed’s power in 2020.
Congress allows the Fed, with the Treasury Department’s approval, to embark on a wide range of emergency lending measures to flush the economy with cash during times of crisis.
Separately, Warren sent letters to all of the Fed’s regional bank presidents demanding tighter restrictions on the type of financial activity officials can engage in.
“As the Fed took extraordinary actions to address the risks to the economy and the banking and financial systems from the COVID-19 pandemic, you and your colleague Eric Rosengren made extensive trades in individual stocks and real estate investment trusts,” Warren wrote in her letter to Kaplan.
That trading, she added, “has prompted concerns about conflicts of interest among high-level officials with far-reaching policymaking influence and extraordinary access to information about the economy.”
https://www.cnbc.com/2021/09/16/fed-chi … rades.html
Paul Plante says
BRIEFING ROOM
Remarks by President Biden on the Economy
SEPTEMBER 16, 2021
East Room
2:00 P.M. EDT
THE PRESIDENT: Here’s the simple truth.
For a long time, this economy has worked great for those at the very top, while ordinary, hardworking Americans — the people who built this country — have been basically cut out of the deal.
end quotes
And Joe is right:
CNBC
“Fed Chief Powell, other officials owned securities central bank bought during Covid pandemic”
Steve Liesman @STEVELIESMAN
PUBLISHED FRI, SEP 17 2021
Amid an outcry about Federal Reserve officials owning and trading individual securities, an in-depth look by CNBC at officials’ financial disclosures found three who last year held assets of the same type the Fed itself was buying, including Chairman Jerome Powell.
None of these holdings or transactions appeared to violate the Fed’s code of conduct.
But they raise further questions about the Fed’s conflict of interest policies and the oversight of central bank officials.
Powell held between $1.25 million and $2.5 million of municipal bonds in family trusts over which he is said to have no control.
They were just a small portion of his total reported assets.
While the bonds were purchased before 2019, they were held while the Fed last year bought more than $5 billion in munis, including one from the state of Illinois purchased by his family trust in 2016.
Boston Fed President Eric Rosengren held between $151,000 and $800,000 worth of real estate investment trusts that owned mortgage-backed securities.
He made as many as 37 separate trades in the four REITS while the Fed purchased almost $700 billion in MBS.
Richmond Fed President Thomas Barkin held $1.35 million to $3 million in individual corporate bonds purchased before 2020.
They include bonds of Pepsi, Home Depot and Eli Lilly.
The Fed last year opened a corporate bond-buying facility and purchased $46.5 billion of corporate bonds.
Among those questions: Should the Fed have banned officials from holding, buying and selling the same assets the Fed itself was buying last year when it dramatically widened the types of assets it would purchase in response to the pandemic?
A Fed ethics officer determined that the holdings did not violate government rules.
But Dennis Kelleher, CEO of the nonprofit Better Markets, said if some of these Fed actions are not against the rules, the rules need to change.
“To think that such trading is acceptable because it is supposedly allowed by Fed’s current policies only highlights that the Fed’s policies are woefully deficient,” Kelleher told CNBC.
Paul Plante says
So, yes, people, inflation!
According to the RIGZONE story “Oil Futures Down In Steady Trading On OPEC Demand Concerns” by Julia Fanzeres and Devika Krishna Kumar on October 13, 2021, Americans making less than $400,000 are going to get raped but good by inflation this winter as they try to heat their houses, to wit:
The Energy Information Administration boosted its forecast for annual average WTI and Brent prices in 2022 by $5.87 to $68.24/bbl and $71.91 a barrel, respectively, according to the agency’s monthly Short-Term Energy Outlook on Wednesday.
The agency also warned that spending on energy for those households primarily using heating oil will rise 43% compared with last winter, according to its Winter Fuels Outlook report.
end quotes
Makes me glad I heat with wood or I would be freezing this winter for sure, and many older Americans on a fixed income may well be!
And then we had the CNBC story “10-year Treasury yield falls after inflation data, Fed minutes” by Hannah Miao and Vicky McKeever on October 13, 2021, as follows:
Consumer prices increased slightly more than expected in September with the consumer price index for all items rising 0.4% for the month, compared to the 0.3% Dow Jones estimate, the Labor Department reported Wednesday.
On a year-over-year basis, prices increased 5.4% vs. the estimate for 5.3%.
“The print reflected that while transitory factors continue to roll-off, stickier more persistent factors are becoming more prevalent, which the Fed is more likely to respond to,” Bank of America analysts said in a note.
end quotes
Again, that inflation is a tax on people in the United States of America making less than $400,000.
And then we go to the CNBC article “Fed says it could begin ‘gradual tapering process’ by mid-November” by on 13 October 2021, as follows:
The committee also released the summary of its economic expectations, including projections for GDP growth, inflation and unemployment.
Members scaled back their GDP estimates for this year but upped their outlook for inflation, and indicated they expect unemployment to be lower than earlier estimates.
end quotes
Hey, kids, look at that – the Federal Reserve is talking again about STAGFLATION in our futures!
And CNBC again with the story “Consumer prices rise more than expected as energy costs surge” by Jeff Cox on 13 October 2021, as follows:
On a year-over-year basis, prices increased 5.4% versus the estimate for 5.3% and the highest since January 1991.
Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%.
Fuel oil shot up 3.9%, for a 42.6% year over year surge.
Federal Reserve officials have called the current inflation run “transitory,” and attribute it largely to supply chain and demand issues that they expect to subside in the months ahead.
However, that view has been receiving substantial pushback lately.
“This is one more data point to say, ‘Fed, your trying to convince us that inflation is transitory is just not believable,’” Doll said.
“If you know anybody who doesn’t have to live somewhere, doesn’t eat any food and doesn’t use energy, then inflation is maybe not a particular problem.”
“But come on.”
Also on Tuesday, Atlanta Fed President Raphael Bostic said the factors that have pushed inflation higher “will not be brief.”
end quotes
And of course, that implicates the lack of credibility of Joe Biden himself on the subject of inflation, which takes us the Reuters article “Fed lays out plan to reduce bond purchases, flags inflation worries” by Ann Saphir, Jonnelle Marte and Lindsay Dunsmuir on October 13, 2021, as follows:
In a change from readouts of Fed meetings over the summer, policymakers were no longer described as “generally” expecting inflation pressures to ease as transitory factors “dissipated.”
Instead, the minutes suggested there were intensifying worries within the Fed over inflation, with “most” policymakers now seeing upside risks, and “some” concerned about elevated inflation feeding through to inflation expectations or more broadly into prices.
end quotes
Which takes us to another Reuters article entitled “Higher inflation squeezing U.S. consumers as food prices, rents accelerate” by Lucia Mutikani on October 13, 2021, to wit:
WASHINGTON, Oct 13 (Reuters) – U.S. consumer prices increased solidly in September as Americans paid more for food, rent and a range of other goods, putting pressure on the Biden administration to urgently resolve strained supply chains, which are hampering economic growth.
“Inflation is no longer ‘transitory,'” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles.
“Supply-chain bottlenecks are getting worse.”
“The logjam is unlikely to ease anytime soon despite the latest intervention by the White House.”
end quotes
WHOA!
Hey, wait a minute!
I thought Joe Biden and Peter Buttigieg had that all worked out and fixed!
Which takes us to a Reuters story entitled “White House asks U.S. oil-and-gas companies to help lower fuel costs -sources” by Jarrett Renshaw on October 13, 2021, as follows:
(Reuters) -The White House has been speaking with U.S. oil and gas producers in recent days about helping to bring down rising fuel costs, according to two sources familiar with the matter.
“We are closely monitoring the cost of oil and the cost of gas Americans are paying at the pump.”
“And we are using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets,” a White House official said.
The U.S. Energy Department said on Wednesday that household heating costs are expected to rise dramatically this winter for all fuels, but particularly for heating oil and propane.
Any call by the White House for an increase in U.S. production is likely to fall on deaf ears, according to one oil executive, who did not want to be identified criticizing the approach.
The industry has also been unhappy with some of President Joe Biden’s earlier actions, including a temporary drilling halt on federal lands, that they see as an attack on the industry.
“By pursuing policies that restrict supply and make it harder to produce oil and natural gas here in America, Americans will have to pay more for their energy,” said Anne Bradbury, chief executive officer at the American Exploration and Production Council, which lobbies for independent oil-and-gas producers.
end quotes
And as they say in the media biz, that’s the news, folks!
MORAL OF THE STORY: buy that loaf of bread now while you can still afford it!