Tag: Inflation

Eggs-actly What We Need

Awhile back we were hit in the pocket book by the rapid rise of egg prices….the excuse for the price increases was that because of avian flu many egg layers had to be killed.

Of course I felt I needed to inject my humble opinion on the price of eggs….read it here…

Is It Price Gouging?

Now there is a wave of dissent against big ag…..

U.S. Sen. Bernie Sanders this weekend renewed his call to break up agricultural monopolies after the nation’s largest egg producer reported that its quarterly profits soared more than 700%.

Cal-Maine Foods, which controls about 20% of the U.S. egg market, announced last week that its revenue for the quarter ending February 25 rose 109% to $997.5 million, while profit for the same period skyrocketed 718% to $323.2 million.

In a statement, Cal-Maine president and CEO Sherman Miller attributed the company’s soaring profits to “the ongoing epidemic of highly pathogenic avian influenza which has significantly reduced the nation’s egg-laying capacity.”

According to the United States Department of Agriculture, “U.S. egg inventories were 29% lower in the final week of December 2022 than at the beginning of the year,” while “more than 43 million egg-laying hens were lost to the disease itself or to depopulation since the outbreak began in February 2022.”

Sanders (I-Vt.)—who took on agricultural monopolies while campaigning for president in 2016 and 2020—questioned Cal-Maine’s narrative in a tweet arguing that “we must break up Big Ag and enact a windfall profits tax.”

Sanders wasn’t the only congressional critic of Cal-Maine’s latest profits.

“While working families paid record prices for eggs, Cal-Maine raked over 700% more in profits—without reporting a single case of avian flu,” Sen. Elizabeth Warren (D-Mass.) tweeted on Thursday. “We need to crack down on corporate price gouging to provide Americans with relief at the grocery store.”

Rep. Katie Porter (D-Calif.), who is running for U.S. Senate, wrote on Twitter last week that “corporate greed is driving inflation.”

“We need more competition to drive down prices,” she added. “In the meantime, I’m demanding answers from Cal-Maine directly.”

https://www.commondreams.org/news/why-are-egg-prices-so-high

Granted the prices have come down a bit but they are still high and I will back Bernie on his crusade.

This is an all too familiar situation…price gouging that few ever pay a price for screwing the public.

I will watch to see how quick this investigation is thrown into the dust bin.

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–20Feb23

Inflation has been kicking the crap out of the American consumer….and it just keeps getting worse….

People are using the credit cards to help get by….

U.S. consumer credit card debt has jumped to nearly $1 trillion, the Federal Reserve Bank of New York said on Thursday.

Credit card balances increased more than $60 billion over the three months ending in December, lifting the total amount of U.S. credit card debt to an all-time high of $986 billion, the report found.

The skyrocketing credit card balance has coincided with an increase in the interest rates paid on such debt, crunching household budgets as high inflation eats away at the savings that many amassed during the pandemic.

The average credit card interest rate offered in the U.S. over the last three months of 2022 stood at 21.6%, according to WalletHub, a jump from about 18% a year prior. An aggressive series of interest rate hikes imposed by the Federal Reserve has caused the jump in credit card rates.

https://abcnews.go.com/Business/us-credit-card-debt-now-totals-1-trillion/story

A trillion dollars that is about the amount the War Department’s recent budget….

Eventually all this debt will be called in and thus an economic collapse will be in our future.

I am fortunate for I have no credit debt…but that is just me.

I Read, I Write, You Know

“lego ergo scribo”

 

 

Inflation–How Did It Come To This?

Tomorrow we go to our polling stations and cast our votes for the ‘future’ of this nation.

We are told by the MSM that the most important issue of this election is the economy more specifically rising inflation…..watching the events and the sounds around this election I do not agree that it will be the deciding factor.

If that is true why has seemingly no one explained how it came to this.

One side blames Biden for the disaster of the economy and the other side blames…well whatever is the most convenient…..but just what or who brought us to this moment in our election process?

One of the culprits for this crisis is being dropped at the feet of the Fed.

The Federal Reserve has made two major policy blunders in the last 25 years. 

The first was being unaware that the foundation of the U.S. banking system had been eroded away by complex mortgage securities that carried high credit ratings but turned out to be toxic during a broad housing downturn. The resulting meltdown in valuations caused the global financial crisis in 2008 that hobbled the U.S. economy for years.

More recently, a misreading of the strength of the labor market and the persistence of price shocks sparked by the pandemic led to the highest inflation rate in 40 years and the final chapter of this saga is still to be written. The policy error paved the way to make 2022 the worst year in financial markets arguably since the 1930s. Both stocks and bonds have plummeted and Federal Reserve Chairman Jerome “Jay” Powell is at the center of the financial turmoil, landing him on the MarketWatch 50 list of the most influential people in markets. 

Critics have pounced on the Fed. Powell’s insistence that rising inflation was “transitory” and would quickly dissipate once the economy reopened more fully has been called “probably the worst inflation call in Fed history” by Mohamed El-Erian, chief economic adviser for Allianz. The economist Stephen Roach has compared Powell to former Fed chair Arthur Burns, whose indecisiveness under intense political pressure led to the crushing inflation of the 1970s. As recently as March 2022, when the Labor Department was reporting a 7.9% annual rise in consumer prices, Powell and the Fed were just wrapping up their injections of liquidity into financial markets.

How Powell, who is not a trained economist, is ultimately remembered will depend on whether he’s able to tame inflation without driving the U.S. into a deep recession. It could still all end relatively well, but the debate about what signs the U.S. central bank ignored and why will be studied and debated for years to come.

https://www.marketwatch.com/story/why-did-inflation-surge-to-a-40-year-high-here-are-4-causes-of-the-worst-monetary-policy-mistake-in-years-11667318263

I tried last week to help fill in the gaps in our knowledge of inflation and even included some ‘solutions’ given by some in the GOP….

It’s Election Time–It’s Inflation

If you want to help this country then please consider all angles….do not just vote for pasty faced old white guy….for their solutions are antiquated and not going to actually help in the 21st century.

Please take the time to vote.

I Read, I Write, You Know

“lego ergo scribo”

It’s Election Time–It’s Inflation

As I watch the news I hear daily that the major issue for the upcoming election is the economy most specifically it is the inflation that is crippling most Americans.

I do not agree….I agree that inflation is a huge problem but I disagree that the decision on voting will be decided by that problem.

First the big myth is that inflation is a hidden tax…..It is not a taxation but it is taxing….so to oversimplify the phenom politicians like the word “tax”.

Calling inflation “taxes” is simply inaccurate. People pay taxes to governments to achieve certain ends. Even if you think that government is inherently wasteful or lazy or inept and are sure that the pure magic of markets—which, again, were largely responsible for the pent-up supply chain problems that drove inflation—there are actions that happen as a result of those taxes paid. Schools, roads, defense, regulations of markets that have proven themselves when unsupervised inclined to cause disaster, all of this are benefits those taxes pay for.

So the GOP blames the Dems….the Dems blame the GOP…again it is an oversimplification.

First, the most important release from last week was the third quarter GDP data. It showed the economy growing at a 2.6 percent annual rate. This is a very healthy rate of growth and follows small declines reported in the prior two quarters.

The growth also should mean that we are again seeing positive productivity growth after seeing a record pace of decline reported in the first half of 2022. Productivity data are always erratic, and the numbers from the first half should not be accepted at face value (reported growth in the fourth quarter of 2021 was an impossibly high 6.3 percent), but there can be little doubt that productivity in the first half of this year was very bad.

The 2.6 percent growth in third quarter GDP was roughly equal to reported growth in hours in the payroll data, but there was sharp fall in the number of people who reported being self-employed. This should imply productivity growth in the neighborhood of 1.0 percent. We will get the actual figure this week when the Bureau of Labor Statistics reports third quarter productivity data.

A 1.0 percent rate of productivity growth is not great, but hugely better than the declines reported in the first half of the year. Productivity was likely weakened in the first half by supply chain problems, huge turnover, and possibly some labor hoarding. These problems should have been less of an issue in the third quarter, and even more so going forward, as the economy is operating closer to normal in most sectors.

Weak productivity would be a major factor raising costs for businesses and thereby creating inflationary pressure in the economy. If we are back on a normal productivity path, this would be a big positive for inflation prospects going forward.

Inflation and Recession: Where Are We Now?

Since the GOP is hammering Biden on inflation for the mid-terms…..how would they solve the problem?

It’s perfectly reasonable for Republicans to batter Democrats on inflation. Gas prices have fallen way off their June highs, but the rising cost of living is still a problem for Americans from most walks of life, and Democrats are the party in power. That’s politics.

But now that Republicans have chosen inflation—and particularly gas prices—as their number-one issue for this political cycle, it follows that their candidates would have detailed plans to turn things around if they’re elected. That’s governing.

We asked the campaigns of eight Senate candidates in competitive races—J.D. Vance in Ohio; Mehmet Oz in Pennsylvania; Herschel Walker in Georgia; Blake Masters in Arizona; Ron Johnson in Wisconsin; Ted Budd in North Carolina; Adam Laxalt in Nevada; and Mike Lee in Utah—the following:

  1. What is the candidate’s plan to lower gas prices?
  2. What is the candidate’s plan to fight inflation?

https://www.esquire.com/news-politics/a41819936/republicans-inflation-gas-prices-plan/

Will the GOP have all the answers to inflation?

I think not.

I do not believe that giveaways to the wealth will stop the ravages of inflation on us less fortunate….remember the beginnings of the idiotic ‘trickle down economics’? (a look back)

https://www.commondreams.org/views/2022/10/27/you-cant-fight-inflation-even-more-giveaways-rich

There is a way to hold down inflation….you go to the people that are fueling the problem….corporations…..

By now, you’ve probably heard the good news. After more than a year of surging inflation, gas prices are down, pandemic supply chain snarls are starting to ease, and shipping costs for companies are coming down. But instead of passing on the savings to customers, companies are making a different choice.

Big corporations are choosing to keep prices high for consumers, even as their own expenses, for things like materials and transportation, go down. While the Biden administration and its economic response to the pandemic have become easy scapegoats for those who wish to assign blame for stubbornly high prices, especially as midterm elections draw closer, the facts tell a different story. And ignoring the ways in which corporate price hikes are contributing to higher prices will only prolong the crisis.

This isn’t just speculation. My colleagues at Ground Collaborative and I pored over recent earnings reports from the nation’s biggest companies. We learned that their executives are admitting to the strategy of keeping prices high because it means bigger profits for their companies and massive payouts to their shareholders.

https://www.commondreams.org/views/2022/10/27/price-gouging-corporations-helping-drive-inflation-must-be-held-accountable

The outcome of the mid-terms will bring little relief for us mere mortals….

Sorry to be a downer.

I Read, I Write, You Know

“lego ergo scribo”

What About This Inflation Thing?

I have heard much ‘good’ news about the economy lately….but unfortunately the real facts say different….

Investors were fully expecting good news from the new monthly inflation report out Tuesday. But instead of declining, prices actually rose in August. Which means the Federal Reserve is all but certain to forge ahead with an aggressive rate hike at its Sept. 20-21 meeting. Details:

  • Monthly rise: Prices rose 0.1% in August from July, according to the Consumer Price Index, reports CNBC. Most analysts had forecast a decline of 0.1%. Investors were hoping for a sign that inflation had peaked.
  • Yearly increase: Compared to a year earlier, prices in August were up 8.3%, which is extremely high by historical standards, though below the annual figures of 8.5% in July and 9.1% in June, per the Wall Street Journal.
  • Market flips: Dow futures were up about 200 points before the report came out, with investors hoping an inflation cool-down would convince the Fed to temper its interest-rate hikes. But as soon as the report came out, Dow futures were down by 300 points, per CNBC.
  • The Fed: The new report is all but certain to keep the Fed “firmly in inflation-fighting mode,” per the New York Times. Most observers expect another hike of three-quarters of a percentage point. “Inflation is far too high, and it is too soon to say whether inflation is moving meaningfully and persistently downward,” Christopher Waller, one of the Fed’s governors, said last week. “This is a fight we cannot, and will not, walk away from.”

So the news is not so good and Wall Street reacting as could be predicted…..

The stock market fell the most since June 2020 following Wall Street’s humbling realization Tuesday that inflation is not slowing as much as hoped. The S&P 500 fell 177.72 points, or 4.3%, to 3,932.69. The Dow Jones Industrial Average fell 1,276.37 points, or 3.9%, to 31,104.97. The Nasdaq fell 632.84 points, or 5.2%, to 11,633,57. A hotter-than-expected report on inflation has traders bracing for the Federal Reserve to ultimately raise interest rates even higher than expected, with all the risks for the economy that entails. Bond prices also tumbled, sending yields sharply higher, after the government reported inflation decelerated last month by less than economists forecast.

Investments seen as the most expensive or the riskiest are the ones hardest hit by higher rates. Bitcoin tumbled 7.1%. In the stock market, all but four of the stocks in the S&P 500 fell. Technology and other high-growth companies fell more than the rest of the market because they’re seen as most at risk from higher rates, the AP reports. Apple, Microsoft, and Amazon all fell more than 4% and were the heaviest weights on the market. The communication services sector, which includes Google’s parent company and other internet and media companies, sank 4.8% for the largest loss out of the 11 sectors that make up the S&P 500 index.

Most of Wall Street came into the day thinking the Fed would hike its key short-term rate by a hefty three-quarters of a percentage point at its meeting next week. But the hope was that inflation was in the midst of quickly falling back to more normal levels after peaking in June at 9.1%. The thinking was that such a slowdown would let the Fed downshift the size of its rate hikes through the end of this year and then potentially hold steady through early 2023. Tuesday’s report dashed some of those hopes. “Right now, it’s not the journey that’s a worry so much as the destination,” says Brian Jacobsen at Allspring Global Investments. “If the Fed wants to hike and hold, the big question is at what level.”

Not to worry they will manipulate the economy to make everything look okay for us mere peasants…..but if you have to earn a living you know it is not ‘healthy’ by any stretch of the imagination.

But go ahead bury your head and plug along barely making it….or do something about it.

I Read, I Write, You Know

“lego ergo scribo”

Is Inflation Slowing?

The good news lately has been that the rate of inflation is slowing…..that report made most of the MSM……good news indeed….but is it all show much smoke and mirrors?

While many economists are anxious to have the Fed push forward with an aggressive path of rate hikes, there is good reason to be cautious. If we deliberately raise the unemployment rate, and throw millions of people out of work, it will be the most disadvantaged in the economy and society who will be hardest hit.

And, the impact is not just on the people who actually lose their jobs, but on millions more who will be fearful of losing their jobs. In addition, tens of millions may feel stuck at dead end jobs with poor working conditions and abusive bosses. We should always be cautious about a policy that deliberately throws people out of work and try to avoid going this route unless it is absolutely necessary. (We should also come up with better routes for dealing with inflation, but I’ll skip that one for now.)

The recent government data on inflation, along with a wide variety of private measures, give us good reason to believe that we are seeing at least a temporary pause where the monthly inflation data will be moderate. As noted, there is clear evidence of substantial labor market weakening, which could slow the pace of wage growth to a rate consistent with moderate inflation. The Fed should take advantage of this pause to slow its path of rate hikes and get a better sense of where the labor market now stands.

Inflation: Where Are We Now?

The things that I buy shows no slowing….food is still up….gas is down….

Economists see things that we mere mortals do not……but I can only say how it is affecting me and my family…..so far inflation is still biting hard.

How about you?

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–23Aug22

We all have been bitten hard by the growing inflation….food, gas, rent, etc. ….there is another area that is not getting attention in these days of high inflation….the cost of raising a child.

Inflation’s damage is being felt not just one loaf of bread or gallon of gas at a time, but in big-picture expenses—such as the cost of raising a child. A new Brookings Institution estimate puts the total for raising a child through age 17 at $310,605. The estimate is based on government data, with the effects of inflation added on, for a married, middle-income couple with two children, the Wall Street Journal reports. That’s 9% higher than the estimate two years ago, before prices took off, though it leaves out college. “A lot of people are going to think twice before they have either a first child or a subsequent child because everything is costing more,” said Isabel Sawhill, a senior fellow at Brookings.

Or parents might decide they have to work more, Sawhill said. Reducing expenses sounds like it would help, but many families already have hit that wall. “Switching cellphone plans, cutting back on eating out, helping your neighbor, buying from your local grocery store, your local farmers market,” a woman in Pittsburgh with one son said. “When you’ve done all those things naturally just to survive, you’ve run out and you’ve exhausted all of that.” The estimate, based on a child born in 2015, considers costs such as housing, food, clothing, health care, child care, diapers, haircuts, sports equipment, and dance lessons, per the Journal.

The study did not factor in race, but research has found Black families are hurt more by volatility in prices. Sawhill said lower-income families are affected by inflation more than wealthier people, per the Hill. Overall, she said, skyrocketing prices have made it “a greater burden than it used to be to have children.” One woman who just canceled her cable TV service said she and her husband had to call off an annual week long gathering at her home of the boys in her family: her three sons and their cousins. “It costs a lot to feed almost 10 boys,” she said.

Just a little something to think about….those figures do not include any college aspirations the child may have…those figures will make one start drinking.

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–09Aug22

In these days of high inflation we all have been jammed up at the pump….those damn gas prices are just too damn high…..but not to worry they have started their slow drop……but will they ever return to the days of yore when gas was affordable?

The answer to that question is….probably not!

Nothing can make or break a president’s political fortunes like the price of gasoline. As Ben Lefebvre reports for Politico, President Biden is trying to ease the pain by tapping the Strategic Petroleum Reserves, easing rules on ethanol sales, and proposing a temporary gas tax cut. Such bandages might bring temporary economic and political reprieve, but they’re not likely to last, according to Lefebvre. Others may disagree. For example, Republicans blame Biden’s climate agenda and are apt to call for more drilling. Environmentalists and transportation analysts say oil prices are bound to fall amid rising demand for electric vehicles and renewable fuels. That may be true, eventually, but US demand for gasoline will remain high for the foreseeable future, and there’s not much anyone can do about it, writes Lefebvre.

The problem boils down to the nation’s refining capacity, which has fallen steadily in recent years, not because of political directives or decreased demand but—in several ways—as a result of climate change. First, there’s the physical threat posed by intensifying storms along the Gulf Coast. That’s why Phillips 66 closed a Louisiana refinery damaged by Hurricane Ida last year, and it’s also why insurance rates are skyrocketing. Meanwhile, Shell shuttered a Louisiana refinery as part of its “strategic shift to shrink its fossil fuel asset portfolio.” It’s being converted to produce biodiesel. Others are following suit as executives and investors adapt to the economic and politic realities of climate change. Nobody plans to build new refineries, and those that remain are old and getting older. And that’s why any future presidents should expect to feel Biden’s pain. Read Lefebvre’s analysis here.

Sorry to be a bummer and pee on the parade….but I thought you needed to know before you got too excited.

You see they, oil industry, will keep a tight control on supply so they can maximize their profits.

I Read, I Write, You Know

“lego ergo scribo”

Will Inflation Slow?

A good question for us armchair economists…..and I am sure there is a wealth of opinions out there…..this is just mine.

Let’s begin with the new Inflation Reduction Act before the Congress……

The bill, introduced last week after a long-awaited deal was struck between Senate Majority Leader Chuck Schumer (D–N.Y.) and moderate Sen. Joe Manchin (D–W.Va.), was pitched as a way to lower costs for consumers while also reducing the federal budget deficit and spending billions on environmental initiatives meant to combat climate change.

It didn’t take long for a problem to present itself.

“The impact on inflation is statistically indistinguishable from zero,” concluded the Penn Wharton Budget Model (PWBM), a number-crunching policy center based at the University of Pennsylvania. In fact, if the bill’s passage had any impact on inflation in the short term, it would be to increase it very slightly until 2024, according to the group’s preliminary analysis, released on Friday.

Other parts of the Inflation Reduction Act would do what Manchin and Schumer claim. According to the PWBM report, the bill would reduce future deficits by a cumulative $247 billion over the next decade and would marginally reduce the national debt as a result. It would spend about $370 billion on new environmental and climate initiatives. It would pay for all that by raising taxes and by boosting IRS enforcement, in hopes of chasing down revenue that currently goes unpaid.

But again, the Inflation Reduction Act won’t actually reduce inflation.

The ‘Inflation Reduction Act’ Won’t Actually Reduce Inflation

Once again the answers to the nation’s economic problems is a bill or action that does little to help.

I have made my thoughts known and the comments were as I expected…..but like I say….they are my opinions not a game plan although my ideas would help.

“Inflation” is the new buzzword of the year. It is the reason for the Federal Reserve’s interest rate hikes designed to increase the costs of some loans. It is the excuse given against renewing the expanded child tax credit program that briefly lifted millions of American families out of poverty. It forms the name of one of the key pieces of legislation that may salvage President Joe Biden’s first term: the Inflation Reduction Act. And, it is the basis of Republican complaints against Democrats heading toward the midterm elections this fall.

With all this concern over inflation, one wonders why so little heed has been paid to another “i” word: inequality.

For decades, government officials, media pundits, mainstream economists, politicians, and others were content to allow and even enable money to flow upward, enriching the already wealthy. They paid little heed to increasing inequality, beyond shrugging their shoulders and lamenting the injustice of it all.

To fiscally conservative politicians, it seems that inflation equates to trouble, but inequality is perfectly tolerable.

To Reduce Inflation, Control Corporate Profits

We are told daily how tough things are for the corporations…..and yet they find enough cash to buy other companies even football teams when times are tough.

So yes….I agree with the article above.

Turn The Page!

I Read, I Write, You Know

“lego ergo scribo”

 

What Happened To Productivity?

Inflation is running rampant and no one in DC will do a goddamn thing about it…..the latest numbers tell the tale…..

The consumer price index for June is worse than expected—and what was expected was bad. The CPI was up 9.1% year-over-year in June, above economists’ prediction of 8.8%. Even that estimate was worse than May’s 8.6%. The last time inflation was this high was in November 1981, reports MarketWatch. The so-called core CPI, which takes volatile food and energy prices out of the equation, was up 5.9%, slightly higher than the 5.7% estimate. The AP observes the reports “likely seal[s] the case for another large interest rate hike by the Federal Reserve, with higher borrowing costs to follow.” Dow futures were down 300 points on the news.

“A higher inflation rate … will put more pressure on the Fed to increase the interest rate more than expected, and that increases the possibility that the US is going to enter a recession,” University of Cincinnati economist Hernan Moscoso Boedo told ABC News prior to the CPI data being released.

The Wall Street Journal reports gasoline prices surged more than other categories, with an 11.2% gain over May. Some economists are hoping we’re at or near an inflation peak: Gas prices, for instance, were at $5 a gallon in mid-June but were down to a $4.66 nationwide average Tuesday—”still far higher than a year ago but a drop that could help slow inflation for July and possibly August,” per the AP.

They say (whoever the Hell ‘they’ are) that productivity is a better indication of the health of an economy than jobs (which is the focus of any economic report)….

We all are suffering from the creeping inflation that is plaguing this country…..and the best our government can do is try to protect profits for the oligarchs that control everything.I suggested that Biden consider price controls to give our citizens a break from the crushing inflation…..I was scolded for such a idea because it would make our national productivity suffer…..and yet without this ‘control’ it is already down…..

June’s employment report surprised most analysts, as US businesses added 372,000 jobs, way above expectations. The strong numbers dampened talk of impending recession, but what do they say about the strength of the economy overall? By themselves, they don’t really say much, according to New York Timeseconomics columnist Peter Coy. To get a truer sense of what’s happening—and what the future may hold—Coy says to pay attention to productivity, defined by the BLS as output per hour worked. That number shrank in the first quarter at a surprising 7.3% annual rate and is “on track for one of its worst 12-month performances” since 1947, Coy writes. That means GDP isn’t growing despite strong hiring.

The pandemic has a lot to do with it, but not for reasons most people might have expected in 2020. Back then, the economy experienced a productivity surge, which many analysts chalked up to deployment of new technologies to accommodate a homebound workforce. But it turns out 2020’s labor output was skewed by a change in the mix of workers, as lower-skilled, lower-paid workers were laid off but skilled workers remained.

Low-skilled workers are in high demand now, forcing companies to hire “less productive workers that in normal circumstances would not be active,” and output is inevitably falling as a result. Increased hiring and decreased productivity tend to signal that “businesses’ costs are rising and profits are getting squeezed,” and that scenario tends to end with layoffs.

Read the whole column here.

Lots of excuses of why this is……excuses does not help the situation…..many blame the output of the workers….why?  Workers only produce what they are told to produce…..

I still think that some sort of price controls would help me and my fellow Americans that are struggling with the situation these days.

I Read, I Write, You Know

“lego ergo scribo”