Inflation Hits 40 year High

[lustylad]

Originally Posted by HDGristle

The point is that we can have similar convos about each of the staples in the CPI bucket. And there will be varying levels of things that the current admin can and can't do to address them. Or didn't do.

That the Fed can and can't do. Or didn't.

That are setup by previous administration policies.

That depend on public and private business decisions.

The average person doesn't scratch the surface of understanding inflationary drivers. On avg, blame is assigned to whoever is in charge at that moment when things go poorly. Praise is assigned to whoever is in charge at that moment when things go right. But they don't get there in a vacuum. Not everything can be just be handwaved and/or blamed on Democrat spending. Or people notnworking because of stimulus funds. Or COVID restrictions. Or the current guy. Or even the last guy.

But that's what we do because it's easy to not be informed. The media, left and right, are great at obfuscating, praising folks for shit they had little to do with and scapegoating for the same for their respective set of lemmings.

When we boil things down to "Are you better off today than you were 4 years ago?" we are purposely divorcing ourselves of context to focus on the surface level. I'm vastly more well off today than I was 4 years ago and compared to last year inflation included. I know many aren't.

Any time we pull a snapshot on inflation we need to understand the context of not just what happened from point F to point G, but go back further to understand the context of how we got to point F.

But if we only look at it through political lenses, driven by long-standing media strategies to take advantage of our cognitive dissonance and low levels curiosity then I guess we aren't as smart as we pretend to be when bashing the other side.

Don't quit your day job. You're clearly not an economist. You just spent half a page bloviating to make a simple point nobody is contesting - namely that inflation has multiple causes, some of which are not readily fixable by government.

I don't want the government to approach the problem of generally rising prices by tediously analyzing the drivers behind each fucking component of the CPI, like oranges, cars, rent, etc. When prices are heating up ACROSS THE BOARD, any economist worth his/her salt will tell you it's a MACRO problem, not a MICRO phenomenon. And the first thing you should do to cure it is to switch to more restrictive MACRO policies, on both the fiscal and monetary levels. That means, inter alia, you curtail spending and raise interest rates. Do you see Biden pushing for anything remotely close to that? Or the dim-retards in Congress, who are now trying to put together yet ANOTHER wasteful spending program after we've shoveled out $5.7 trillion in emergency "relief" since the pandemic started?

I'm old enough to have lived through previous inflationary periods, and yes the problem may be exacerbated by factors that are beyond the control of a single President. For example, it would be hard to blame Nixon for the 1973 Arab oil embargo and subsequent quadrupling of world oil prices. But every inflationary spiral is different, and I can tick off at least a dozen Biden policy decisions that have stupidly and recklessly worsened the problem rather than alleviated it. In previous episodes, it took years for inflation to accelerate to double digit levels. This time around, we're on track to set a fucking record. Kinda like that new Corvette EV that can go from zero to 60 in 3.4 seconds.

The CPI has soared by 7.5% in the past 12 months, after rising by only 1.4% in all of 2020. That means inflation has more than quintupled in a year! A spike as dramatic as that can't happen without the government opening up the fiscal and monetary spigots for it! So while you're busy wracking your brain to come up with excuses, the rest of us will just shake our heads and say "Heckuva job, Joey!"

Ever study Keynes? Probably not. Here are two of his quotes that you and Joey would do well to ponder:

1. "There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
From The Economic Consequences of the Peace, 1919

2. "The boom, not the slump, is the right time for austerity."
From The General Theory of Employment, Interest and Money, 1936

Originally Posted by HDGristle

If we wanted to solve the chip crisis we have today, when did it start? Why does most of the world get them from one place? Where do we get the materials? Where would we build the plants? What kind of workers do we need? What would the lead time be on getting this up and running? What's the projection on how long it would take to get them cranking out at full capacity? How long until we had supply under control? Why wasn't something done to shore this up before? What's being done now? Why isn't it solved yet?

That chip shortage has been a fucking killer headwind for our economy and the global economy at large. Would you care to discuss it and the impacts of it on inflation, lusty?

Been there, done that. I even posted a lengthy explanation from the WSJ right here in the sandbox. You must've missed it:

https://www.eccie.net/showpost.php?p...96&postcount=4

[lustylad]

Inflation Haunts the Biden Economy

An historic policy failure calls for a sharp turn at the Fed and White House.

By The Editorial Board
Feb. 10, 2022 6:53 pm ET


So how’s the U.S. government’s grand experiment in modern monetary theory turning out? Not well. Consumer prices over the past 12 months rose 7.5%—the most in 40 years—while real wages declined 1.7%, the Bureau of Labor Statistics reported Thursday.

The report jolted financial markets, as stocks fell and bond yields rose. But nothing in the January report should be shocking. This is what happens when the government massively expands the money supply and over-stimulates demand. Yet the Federal Reserve and Biden Administration last year dismissed inflation as “transitory.” They have belatedly dropped that line, but they still won’t concede that inflation is becoming more entrenched as price increases have exceeded 5% for eight months in a row.

Food prices increased 0.9% in January and 7% over the year. Gas prices ticked down 0.8% last month but are still up a whopping 40% from a year ago. It’s striking that the core index that excludes food and energy rose 0.6% in January—about twice as much as last summer—and is up 6% year-over-year.

The White House points out that used car prices are moderating, but this is small consolation since rising prices for other goods and services are more than compensating. Clothing prices were relatively flat for most of the pandemic as people stayed home, but they rose 1.1% last month and are up 5.3% year-over-year. Airline fares climbed 2.3% in January even amid the Omicron surge.

Fed oracles predicted prices would ease for goods that were in high demand during lockdowns. That didn’t happen. They also forecast that the inflation rate would decline as consumption shifted to services. That also hasn’t happened. Americans are consuming more services, which has pushed up prices for travel, medical care and dry cleaning—the service index was up 4.6% from a year ago.

The economy needed support early in the pandemic. But Congress’s $900 billion Covid relief bill in December 2020 and the $1.9 trillion in spending that Democrats passed last March were overkill. The enormous income transfers reduced incentives to work while at the same time giving people more money to spend.

The Fed has helped mop up Congress’s spending with bond buying, doubling its balance sheet to an astonishing $8.9 trillion. Its monthly purchases of Treasurys and mortgage-backed securities were intended to reduce long-term interest rates, increase asset prices and create a wealth effect that stimulated consumption. You might say it over-achieved.

Housing prices have risen nearly 25%, and the Dow Jones Industrial Average is up some 20% from February 2020. Many Americans no doubt felt flush from rising asset prices and generous transfer payments—at least until the inflationary side effects hit.

Price increases are erasing even hefty nominal wage gains. Real average hourly earnings ticked up 0.1% in January but are 1.7% lower than a year ago. Real average weekly earnings are down 3.1%. Wages have been surging for lower-skilled workers especially in leisure and hospitality, but not enough to offset rising prices, since they spend more of their paychecks on food, energy and rent.

The biggest inflation mistake since the 1970s calls for a sharp turn in fiscal and monetary policy. President Biden’s floundering Build Back Better Act, even in smaller form, deserves a final burial. Sen. Joe Manchin was right to oppose the bill, and his worries about inflation have been borne out, as he noted Thursday. The economy needs a trade and deregulation agenda that will lower prices, not a regulatory onslaught that will raise them.

The Fed’s challenge is also increasing, as markets may finally be acknowledging. The central bank’s preferred path of three or four quarter-percent hikes in interest rates will still leave rates negative. The Fed’s bond portfolio will also have to be reduced sooner rather than later. Unwinding this two-year unprecedented monetary experiment will itself be an experiment, and one risk is the Fed gets spooked by the market reaction to its tightening.

The pain might have been lessened if the Fed had begun to withdraw its pandemic money rush more than a year ago. But Washington had grown to believe that a new era of cost-free spending and low interest rates had dawned. The old fiscal and monetary verities no longer held, and those who warned about inflation were proclaimed to be dinosaurs from the Reagan era.

Relearning those lessons will now be much harder than it should be, and the American worker will now pay the price.

https://www.wsj.com/articles/inflati...x-11644531980?

[HDGristle]

Lusty, that's the depth of convo necessary.

But you need to look at both the micro and macro causes of inflation. The orange crop actually needs MORE attention than it's getting, not less.

You also need to go beyond Fed policy adjustments because of the most unique labor market we've had in quite some time. Even once the stimulus funding stopped, folks didn't come back to work and a substantial number of Americans will not return to the industries they were in pre-pandemic. Critical sectors that were already seeing worker shortages have been hollowed out even further not because folks felt flush but because of burnout, softening demand, or better paying opportunities that siphoned away critical labor and critical talent. Moves out of dense urban areas that were pandemic-fueled overreactions. And then there were the company's that forced out workers to right their balance sheets and now regret it as they're paying maasive premiums on replacements as their workforces tire of doing more work with less heads. Prior administration immigration policy, that has remain unchanged in unexpected areas, has helped undermine the food supply as there are not enough temporary seasonal workers to do the work that many American abandoned long ago.

The money from the infrastructure bill hasn't truly entered the market yet.

This has been part of an ongoing convo with berry over time where he points solely at government spending. But you're hitting on exactly what I've been trying to draw out and for that, I thank you.

[HDGristle]

Originally Posted by lustylad

Been there, done that. I even posted a lengthy explanation from the WSJ right here in the sandbox. You must've missed it:

https://www.eccie.net/showpost.php?p...96&postcount=4

Didn't miss it at all. Posted in that thread, hence the invitation.

[Jacuzzme]

Originally Posted by berryberry

the Senile Biden Economy

Bacon? This means war!

[berryberry]

Biden’s Inflation Is Only The Beginning. The Real Problem Is Far, Far Worse.

https://www.dailywire.com/news/biden...-far-far-worse

[berryberry]

Joe Manchin: This inflation is real. It's harming people. It's 7.5%. That's a tax, and it continues to increase. It's not decreasing. So the feds have to step up to the plate and do something..it's going to be absolutely horrible what it's going to do to the American economy.

This is not a time to be throwing fuel on the fire. We have, we have inflation, and we have basically an economy that's on fire. You don't throw more fuel on the fire that's already on fire causing the problems that we have. So we've got to get our house in order.

[Grace Preston]

Originally Posted by Jacuzzme

Bacon? This means war!

Grab your pitchforks!!!




Of course, I don't know if I agree with every item on this list... in prepping for my tour, I've found that hotels are less expensive than they were 4 years ago.

[berryberry]

[berryberry]

But oranges

Single-Family Home Rents Surge At Fastest Pace Ever

New data from CoreLogic Inc. shows rental prices for single-family homes soared to an all-time high in 2021. This comes as on-time rent collections deteriorates as households are pressured by soaring shelter, food, and energy inflation.

CoreLogic's new report says rent prices for single-family homes increased by 7.8% in 2021, a record high. In December, rent prices jumped 12% year over year for the month.

https://www.zerohedge.com/markets/si...y-deteriorates

[HDGristle]

By all means, berry. Walk through the drivers of rents and let's discuss the whole story.

For once, try going deep rather than just taking some shallow pumps and relying on the stories of others.

[berryberry]

But oranges

Biden Energy Policies Added $1,000 To Typical Household's Costs In 2021: Report

A new analysis by the Heartland Institute reports the typical American family’s home heating and cooling costs increased by as much as $1,000 in 2021 as a result of President Joe Biden’s energy and environmental policies.

“The average U.S. household in 2021 spent an extra $600 in higher gasoline costs and $70 in higher electricity costs. Further, households that use natural gas spent an extra $300, on average, and those using home heating oil paid $1,000 more. Cumulatively, the average American household paid about $1,000 in higher energy costs in 2021, compared to 2020,” Heartland authors Linneau Lueken and Jack Taylor write in the report.

“It’s also important to note that these higher energy prices have been baked into the costs for all goods and services bought and sold in the economy, contributing to across-the-board inflation. With those costs in mind, it’s clear the Biden administration’s disastrous energy and climate policies cost the average U.S. household— irectly or indirectly—much more than $1,000 over the past year,” Lueken and Taylor continued.



https://www.zerohedge.com/economics/...ts-2021-report

[HDGristle]

Thanks for staying true to form, buddy.

[Salty Again]

What could be better than showing the HIGH petrol gas prices?!

WHY go deep when the FACTS are surely out in the open?

#### Salty

[HDGristle]

Originally Posted by Salty Again

What could be better than showing the HIGH petrol gas prices?!

WHY go deep when the FACTS are surely out in the open?

#### Salty

Some saying about apples and oranges applies