Tag: Inflation

Answers To Inflation

As the country is in the grip of runaway inflation especially on gas and food all our politicians are scrambling to look for answers ahead of the upcoming elections….and there are many solutions none of which will do much for us mere mortals.

The GOP has some big ideas…..

House Republicans gathered this week for an off-site hearing denouncing the Biden administration’s economic and energy agenda, blaming the president for record-high inflation and gas prices while proposing solutions that largely focused on reining in government spending and expanding domestic energy manufacturing.

Led by Rep. Andy Biggs (R-AZ), members of Congress heard from a panel of witnesses including former Trump administration Energy Secretary Rick Perry and Club for Growth co-founder Stephen Moore at an event held Tuesday at the Heritage Foundation.

For an hour and a half, Republicans considered proposals ranging from dramatically cutting taxes and government spending, enacting work requirements for social welfare programs, and abolishing “renewable energy mandates” that restrict the production of oil and other fossil fuels.

Although some policy disagreements among them were evident, the event’s attendees were unified in their harsh criticisms of President Joe Biden, fixing the blame squarely on his administration for the country’s economic woes.

“With gasoline at $5 per gallon and inflation at nearly 9% year over year, we need to hold the Biden administration accountable,” Biggs argued. “With Democrats in charge of the House, Senate, and the White House, they are the ones who produced this problem.”

https://www.washingtonexaminer.com/news/house/house-republicans-biden-inflation-gas-prices-heritage-biggs

As pertaining to a ‘gas holiday’….this seems to be popular with both parties….apparently the American voter is so stupid that paying $3 a gallon for gas will make them somehow comfortable….to me this is just a feel good solution that will do little to ease the economic pain of us peasants.

Bidenism in a nutshell: After blasting oil companies for price gouging, Biden announced a suspension of the federal gas tax for three months, a move which will do almost nothing to reduce prices at the pump but will almost certainly provide an even bigger boost to oil company profits.

The site fivethirtyeight.com takes a closer look at the idea of a gas holiday……

Earlier this week President Biden asked Congress to temporarily suspend collection of federal gas and diesel taxes for three months as a way to relieve pressure on Americans as national gas prices rise to $5 a gallon. If the price keeps going up, it could top highs not seen since the summer of 2008. High gas prices are also helping to drive overall inflation, which reached 8.6 percent as of May. 

It’s no surprise, then, that Biden is responding to pressure to do something — anything — about gas prices. As plenty of people have pointed out, the cost per gallon is displayed on giant signs everyone can see. Transportation and groceries are necessities that are purchased weekly or even daily, which means Americans feel these changes in a visible, visceral way. It also gets at why they’re so important politically, especially as surveys show that Americans are adjusting their budgets. 

Nearly three-quarters of Americans say they’ve altered their spending habits to save money because of inflation, according to a Morning Consult poll released this week. More than half, 53 percent, say they’ve changed their eating and drinking habits. Families are eating out less often, cutting back on meat and forgoing alcohol and organic produce.

A similar poll from last month found that middle-income households were spending slightly less on groceries overall and shifting to less expensive options, like store brands instead of name brands. (Higher-income families were just spending more.) 

A Gas Holiday Might Be Popular, But It’s Unlikely To Do Much To Lower Inflation

So far none of the solutions being offered by either party will do the trick at easing our economic pain…..at least that is my opinion.

There are answers but they would flying in the face of the oligarchs that have bought a Congress and that will NEVER happen in my lifetime…..the Congress gets paid too well to actually work for the people that send them to DC.

As I have stated inflation is eating away at the fiber of this country….its people…..and we should learn all we can about this deadly situation….

The focus of the US media and economists for the past several months has been increasingly on inflation.  In recent weeks, however, US policymakers awoke as well to the realization that inflation is chronic, firmly embedded, and growing threat to the immediate future of the US economy.

A qualitative ‘threshold of awareness’ was reached this past week when the US central bank, the Federal Reserve, accelerated its pace of rate hikes by 75 basis points—purportedly to bring the rate of price hikes under control. Whether the Fed can succeed in taming inflation and do so without precipitating a recession remains to be seen but is highly unlikely. Taming inflation without provoking a recession is thus the central economic question for the remainder of 2022.

Clearly some think this is possible—i.e. that further rate hikes will moderate the pace of inflation without driving the real economy into recession and result in what is called a ‘soft landing’. Clearly the Fed and the Biden administration believe that will happen. But a growing chorus of even mainstream economists and bank research departments don’t think so.  Almost daily new forecasts by global banks and analysts appear indicating recession is more than 50-50 likely—and arriving sooner in late 2022 than in 2023.

The Anatomy of Inflation

Hard answers are needed……weak responses will be the norm.

I Read, I Write, You Know

“lego ergo scribo”

Does Recession Loom Large?

All the indicators point to a recession on the horizon (some think it has begun already)…rising prices, food shortages, housing problems, markets unstable, all the indicators are there….

As the economic issues get worse and worse many are asking what is happening and what can we do…..

We all want answers so we can cope…..maybe this will either terrify you or help with your questions.

The stock market actually rose Wednesday in the immediate aftermath of the Fed’s decision to raise rates by a whopping 0.75%. Thursday, not so much. Major indexes fell more than 2% in early trading and sent the Dow below 30,000, its lowest level in more than a year, reports the Street and CNBC. In short, the new bear market only deepened. Now the big question: Will a recession follow? A look at coverage, including some of the many advice pieces now moving:

  • Context: A recession might well be on the way, if it hasn’t already arrived, writes Jeff Sommer in the New York Times. Its dry definition—”a significant decline in economic activity that is spread across the economy and lasts more than a few months”—doesn’t capture the “grim” economic toll it will take on households. But Sommer puts things in context, noting that recessions and bear markets might be more common than you think. The US, in fact, has been in recession 14% of the time since WWII. Among Sommer’s tips: Consider putting cash into I bonds from the Treasury Department, as well as money market funds, which will now be paying more interest.
  • Impact: Among other things, the steep rate hike means home and auto loans will continue to get more expensive, and you’ll pay more in interest on credit card debt, per Axios. The average rate for a 30-year fixed mortgage, for example, is now about 6%, double last year’s figure. And the average rate for credit cards is now 16.7% (and rising), up from 16% last year.
  • How bad? CNBC rounds up the opinions of economic strategists, and they seem pretty certain a recession is imminent. For example, Andrea Dicenso of Loomis Sayles puts the chances of a global recession at 75%. The silver lining: Dicenso and others say the Fed’s aggressive action could make the recession a “shallow” one and thus less painful. “If it’s a shallower recession, which I suspect it would be in the third quarter, the Fed actually has some room now to come back off of some of those rate increases,” says Michael Yoshikami of Destination Wealth Management.
  • Advice: A Washington Post column by Michelle Singletary has tips on handling a bear market and a possible recession. The first is in the don’t-panic vein. “Just shift your view a little bit and look at this as an opportunity if you’re a longer-term investor,” says one strategist. But in terms of tangible things to do: Eliminate credit debt, perhaps with a low-interest personal loan or a balance-transfer credit card. (See a related point in the item below.) Also, consider a side gig to boost emergency reserves, because “the standard advice of having three to six months’ worth of living expenses may not be enough.”
  • What not to do: Veronica Dagher at the Wall Street Journal digs into three common mistakes people make at such times. One is dipping too deeply into emergency funds to pay off credit card and other debt. It’s a balancing game that requires more finesse. A lot of people also reduce or eliminate allotments into their 401(k) funds, but that has some drawbacks, including the loss of employer matching funds. A third is not changing spending habits at all.

I hope this will answer few of your questions for the coming days…..and helps you prepare.

I Read, I Write, You Know

“lego ergo scribo”

Big Moves On Inflation

We are suffering from rising inflation….gas, food, housing, etc……and back in February Biden promised to do something to ease the monetary suffering of the American people…..

Biden To Attack Inflation

And then in May more promises and BS…..

Biden On Inflation

And now Biden has ‘big’ plans for inflation….

Amid sky-high inflation and a reeling stock market, the Biden administration is looking for remedies, and two are making headlines. However, neither is seen as being able to make a substantive dent in the problems:

  • Tariffs: The White House may roll back some or all of the tariffs imposed on China by former President Trump, reports the New York Times. If all such penalties were removed, it might save US households about $800 a year. However, given the fraught politics of the issue, it’s highly unlikely President Biden would wipe out all the tariffs, making any resulting benefits even more modest, per the Times. One estimate is that Biden’s rollbacks might shave, at best, a quarter of a percentage point off inflation, now running at a red-hot 8.6%.
  • Oil companies: President Biden on Wednesday sent a letter to major oil refiners, including Exxon Mobil, BP, and Shell, and urged them to ramp up production as a way to bring down gas prices, reports the AP. “At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” he wrote, per NPR. A post at CNBC is skeptical about what this might actually achieve: “Refiners can’t just ramp up output, and utilization rates are already above 90%. Additionally, some refiners are now being reconfigured to make alternate products like biofuel.”

BRAVO!

This ‘big’ plan will do little to solve the problems of the average American….just what I anticipated from a politician of any stripe…..

Where will this be of immediate assistance to us mere mortals?

Do you really believe that agri-business cares about you or your family?

Or the shipping industry?

Then there is Congress that is more interested in the brides that can rake in ‘legally’ than your and your family’s well-being.

All this is so much bullsh*t….and yet we fall of these antics every election….the only real help is drastic measures not these half handed crap piles that actually aids NO ONE.

Let me know just how any of Biden’s ‘big’ plans will help you tomorrow.

I will wait!

I Read, I Write, You Know

“lego ergo scribo”

Biden On Inflation

Inflation is roaring to new heights daily…..high gas prices….runaway food prices….everything is making life difficult for most Americans…..

With an election approaching Biden has decided to sound more in control than he is…….

How about those gas prices?

About a month ago, President Biden ordered the release of a million barrels of oil a day from national reserves to help curb steep gas prices. On Tuesday, however, those gas prices reached their steepest point on record—an average of $4.37 across the US, reports the Hill. No state has gas for less than $3.90, and drivers in California are paying $5.84. When adjusted for inflation, Americans paid more in 2008, the equivalent of an average of $5.37 a gallon in today’s dollars. But Biden himself on Tuesday acknowledged the hit to people’s wallets from rising prices in general.

“I know that families all across America are hurting because of inflation,” he said in a White House speech Tuesday, per Reuters. “I want every American to know that I am taking inflation very seriously and it is my top domestic priority.” Biden, apparently trying to head off voter resentment before the midterms, sought to blame Republicans for holding up his agenda and contrasted his plans with one floated by GOP Gov. Rick Scott of Florida for a minimum federal income tax, reports the Washington Post.

“The bottom line is this: Americans have a choice right now between two paths reflecting two very different sets of values,” Biden said. “My plan attacks inflation and lowers the deficit. … The other path is the ultra MAGA plan.” Emma Vaughn, a spokesperson for the Republican National Committee, counters: “Voters know that Republican-led states are leading in economic recovery and job creation, and will vote for Republicans and our proven agenda come November.”

This is all so much bullsh*t!

How will he work ‘lower deficits”?

I mean we are throwing money at Ukraine in a shocking amounts….money that is needed here….but no somebody somewhere has decided war is more important (read profitable) than the people of this country.

I want to see this ‘plan’ more in detail….but what little information I have it is nothing more than election posturing that is no help to those Americans struggling with their monetary lives.

But what the big story is that inflation may be slowing before the plan is announced…

Inflation slowed in April after seven months of relentless gains, a tentative sign that price increases may be peaking while still imposing a financial strain on American households. Consumer prices jumped 8.3% last month from 12 months earlier, the Labor Department said Wednesday. That was below the 8.5% year-over-year surge in March, which was the highest rate since 1981, reports the AP. On a month-to-month basis, prices rose 0.3% from March to April, a still-elevated rate but the smallest increase in eight months. Consumer prices had spiked 1.2% from February to March, mostly because of a sudden jump in gas prices triggered by Russia’s invasion of Ukraine

Still, the Wall Street Journal points out that the so-called core-price index—which drops some volatile categories, like food and energy—was up 0.6%, a “sharp pickup” from March’s 0.3% rise. Nationally, the price of a gallon of regular gas has reached a record $4.40, according to AAA, though that figure isn’t adjusted for inflation. Gas had fallen to about $4.10 a gallon in April, after reaching $4.32 in March. The April report “suggests that the deceleration is going to be painstakingly slow,” Principal Global Investors chief strategist Seema Shah tells CNBC.

New disruptions overseas or other unforeseen problems could always send US inflation back up to new highs. If the European Union decides, for example, to cut off Russian oil, gas prices in the United States would likely accelerate. China’s COVID lockdowns are also worsening supply problems and hurting growth in the world’s second-biggest economy.

My question now is…did Biden make his announcement because he saw the news for political gain?

I guess it did not matter for the inflation news was worse than the media had pretended otherwise….

Stocks fell on Wall Street Wednesday, led by more drops in technology companies, after a report on inflation came in worse than feared. The S&P 500 fell 65.87 points, or 1.6%, to 3,935.18. The Dow Jones Industrial Average fell 326.63 points, or 1%, to 31,834.11. The Nasdaq fell 373.44 points, or 3.2%, to 11,364.24. Wednesday’s report from the US Labor Department showed inflation slowed a touch in April, down to 8.3% from 8.5% in March. Investors also found some glass-half-full signals in the data that inflation may be peaking and set to ease further. Nevertheless, the numbers were still higher than economists forecast.

They also showed a bigger increase than expected in prices outside food and gasoline, something economists call “core inflation” and which can be more predictive of future trends. Economists said the inflation report will keep the Fed on track for rapid and potentially sharp increases in interest rates in upcoming months, the AP reports. “Core inflation came in hot, and that’s what really matters to the Fed at this point,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

Where will this American nightmare end?

I will be watching!

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“lego ergo scribo”

It’s Putin’s Fault (Why Not?)

Inflation is soaring in this country, maybe the world, and now we have a brand new excuse…..It is Putin’s fault.

Just Stop It!

Let’s be honest…..2021 was a banner year for the oil industry alone…..

While millions of working people have been hurt by surging gas prices, a new analysis out Tuesday shows that 25 of the world’s biggest fossil fuel corporations collectively pulled in an “eye-popping” $205 billion in profits last year—and Big Oil is exploiting Russia’s war on Ukraine to charge even more at the pump in 2022 and advance its financial interests.

(commondreams.org)

We here in the US blame so many others for our growing problems…..for the GOP it is Biden’s fault or Clinton or Dems…..the Dems along with Biden are blaming the Ukrainian conflict and Putin as the culprit….

“Today’s inflation report,” US president Joe Biden told us on March 10, “is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike.”

It’s the latest in a long line of dodges on the causes of US inflation, which took a dive in early 2020, then began its steady climb toward the current official rate of 7.9%.

The first explanation was that inflation increases were “transitory.” That explanation made sense. Or would have, anyway, if Congress and the Biden administration had brought government borrowing and spending levels back to pre-COVID-19 levels. Instead, they decided to go bigger. When the causes aren’t “transitory,” the effects won’t be either.

Because Biden and Congress were unwilling to rein in borrowing and spending (requiring the Federal Reserve to continue flooding the economy with newly created money), new excuses were required.

Next came “well, if you really think about it, inflation is GOOD – look, higher wages!” And, the US Labor Department did report an average pay increase 4.7% in 2021. But since prices jumped by at least 7%, those “higher wages” actually amounted to significant pay cuts.

(antiwar.com)

Inflation is caused by increasing the money supply faster than society increases its production of goods and services for sale. Everything else is an effect, not a cause.

Vladimir Putin came to Biden’s rescue and gave him yet another lame excuse to draw out pain instead of facing, and acting on, the truth.

Keep in mind that inflation was high before the invasion of Ukraine….and now Biden has an excuse he can use to the benefit of the greed of corporations.

All this ‘found’ cash over a $1 billion to send to Ukraine will just add to the deficit and give the GOP a weapon to be used in campaigns…..and the next Congress will have to face this question and the debate to cut social services will be the game of the day.

In other words the people of the US will pay the price for all our ‘support’ for Ukraine and their struggle against Russia.

For Christ sake…..stop worrying about a world away and start caring about your neighbors for they are far more important.

Sadly most of this will fall on deaf ears for few Americans actually care about their neighbors or their countrymen.

It is pathetic!

Turn The Page!

I Read, I Write, You Know

“lego ergo scribo”

Biden To Attack Inflation

In a recent news conference Biden addressed our growing inflation…..

The administration is going after rising prices by trying to solve the problems in the supply chain, Biden said, per the Washington Post. “We’ve been able to make progress on speeding up the access to materials,”

Seriously?

Let’s say Biden solves the supply thing….does anyone think prices will come down?

I do not!

It has not solved the problem yet so why would it now?

Food is not calculated in the inflation stats….so will we continue to pay outrageous prices for the stables?

So just how will Biden solve the inflation problem?

Tax cuts for corporations?

That has never worked in the past and in this age of corporate greed it will be no better than a fart in the wind.

Biden big idea was to consult so-called experts….

iberal CNN political analyst Bakari Sellers slammed President Biden Friday for responding to a question about the worsening inflation crisis gripping the U.S by referring to what “Nobel laureates” and “corporate leaders” told him about the issue rather than offering a solution to the American people.

During an appearance on “New Day,” Sellers called Biden’s response “terrible,” argued Americans weren’t concerned about the input of Nobel laureates, and declared that the problem was now Biden’s to fix.

Pundits always have answers but have no actual solutions just their hearsay…..

Dems will pay the price for this in the mid terms……as I have said many times there is a easy solution but NO one in DC has the guts to propose…..

The term “price controls” refers to the legal minimum or maximum prices set for specified goods. Price controls are normally mandated by the government in the free market. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods and services, including rent, gasoline, and food.

The American people do not need talk or promises of a solution….they need action and politicians are not capable of giving that solution.

Interest rates by the Fed will not help anyone today…..when hamburger cost $5+ a pound the interest rate will not effect whether I get a grilled sandwich or not.

Biden is doing what all presidents do….let think tanks decide…..instead of asking a cross-section of average Americans what would benefit them the most.

The solution will preserve corporation high profits and not worry about whether I can afford a steak once a  month.

So as usual…..we will not benefit from Biden’s limp ass solution.

Turn The Page!

I Read, I Write, You Know

“lego ergo scribo”

2022–First News

You have begun a new year…a year of elections, pandemic and far Right silliness and hatred….so I feel bad about being the messenger of more bad news for us mere mortals…..

Our holiday season of last year was the most expensive in recent history….sorry to say 2022 is not looking like any improvement…..

Red-hot inflation has been showing up in tangible form in everyone’s grocery bills throughout 2021. Is there relief on the horizon in the new year? Not so much. The Wall Street Journal surveyed several major food manufacturers and finds that prices for just about everything will keep rising. Kraft Heinz, for example, projects an average price increase of 5% for its products, though some will go as high as 20%. Fans of the company’s Grey Poupon mustard should brace for a hike of up to 13%. Another big name, Mondelez International, plans to raise the price of its cookies, candy, and other goodies by up to 7% starting in January. General Mills also will be raising prices next month. Produce, dairy, bread, juice, mac-and-cheese, frozen meals, mayo—you name it, it’s probably going up.

“There’s nothing immune,” says Tony Sarsam of of food retailer and distributor SpartanNash Co. The story cites by-now familiar problems, including supply-chain issues and higher labor and packaging costs. Not surprisingly, this will not only affect those who cook at home but those who eat out, notes Mashed. The costs of some items have risen higher than others over the past year, including beef (24%), bacon (20%), and eggs (12%), and no short-term relief looks to be in sight. Virtually all restaurants surveyed report major supply-chain problems with key ingredients, and menu prices are on track to keep rising. The Cheesecake Factory, for example, just raised prices 3% and may add another 2% in 2022.

Not to worry as wages stagnate the billionaires will still go to space and rake in fed money as they wait their turn in the rocket.

My prediction for 2022….nothing will change…the GOP will continue to do what they do best…..obstruct, the Dems will rant and rave and in the end do nothing, the MSM will continue to push a pro-war agenda of the MI-C….Americans will suffer from high prices and low wages…in other words the same crap we have suffered with for many decades.

Sorry to pee on the new year’s parade but forewarned is forearmed…..

Be well and be safe….

I Read, I Write, You Know

“lego ergo scribo”

Inflation Is On The Rise

If you have been shopping anytime recently then you will be paying more for goods and services….and sadly it does not look like there is any relief any time soon…..

Prices for US consumers jumped 6.2% in October compared with a year earlier as surging costs for food, gas, and housing left Americans grappling with the highest inflation rate since 1990. The year-over-year increase in the consumer price index exceeded the 5.4% rise in September, the Labor Department reported Wednesday. The Wall Street Journal notes it’s the fifth month in a row where the increase was north of 5%. From September to October, prices jumped 0.9%, the highest month-over-month increase since June.

Energy costs soared 4.8% just from September to October, with gasoline, natural gas, and heating oil surging for the same reason that many other commodities have grown more expensive: Demand has risen sharply as Americans are driving and flying more, but supplies haven’t kept up, reports the AP. “If you … fill your gas tank on the way home so you can go to work or take your kids to school, you’re feeling this,” Mary Daly, president of the Federal Reserve Bank of San Francisco, tells NPR, noting that pain is looming in the form of ramped up heating bills this winter. To wit, the Energy Department forecasts those bills will be up 54% this winter over last.

Economists still expect inflation to slow once supply bottlenecks are cleared and Americans shift more of their consumption back to pre-pandemic norms. As COVID-19 fades, consumers should spend more on travel, entertainment, and other services and less on goods such as cars, furniture, and appliances, which would reduce pressure on supply chains. But no one knows how long that might take, though predictions skew pessimistic. “The inflation overshoot will likely get worse before it gets better,” said Goldman Sachs economists in a research note Sunday. “Inflation is clearly getting worse before it gets better,” echoes Principal Global Investors’ head strategist to CNBC.

Inflation is where Biden is losing support….to the point that the White House is trying to find a way out of the downward spiral….

For months, the White House downplayed concerns about inflation by describing the steep rise in prices as “transitory”—just a temporary blip related to the pandemic recovery. But as Kevin Liptak writes in a CNN analysis, President Biden didn’t use the term Wednesday when discussing the news that inflation had surged to a 30-year high. Biden has no choice but to shift his message—”Did you ever think you’d be paying this much for a gallon of gas?” he asked—given that Americans are facing inflation every day at the gas pump and grocery store, and there’s no end in sight. Coverage:

  • Context: “The metaphor of frogs in a pot of water has never been a more apt analogy,” writes Mark Cudmore in an assessment of rising inflation at Bloomberg. “A year ago, if you had told any investor the inflation … they would be seeing today, there would have been disbelief and uproar.” Since last year, inflation is up a whopping 6.2%.
  • Biden’s problem: By many traditional measures, the pandemic rebound is booming, notes CNBC. But inflation is so tangible that most Americans—57% in an NBC poll—disapprove of Biden’s handling of the economy. In fact, fears about inflation and the economy appear to be outpacing those of COVID. Democrats will try to counter with legislative achievements on infrastructure spending and climate change, but the political “headwinds” related to prices will be fierce heading into the midterms, predicts policy analyst Ed Mills.
  • Echoing that: The president is “in a particularly precarious position because there is little he can do to quickly alleviate the problem,” notes an analysis in the Los Angeles Times. “And even as the job market rebounds and wages rise, inflation threatens to swallow those gains and provide a daily reminder of the problem whenever voters dig into their wallets or swipe their credit cards.” In the meantime, Republicans are intensifying their attacks, blaming Biden for worsening the problem.
  • Big voice: Republicans are also happy that Lawrence Summers, a former economic adviser to Barack Obama, has been criticizing the White House for months on inflation. He previously warned that the $1.9 trillion coronavirus relief bill passed in the spring would make things worse. “I think that the policymakers in Washington unfortunately have almost every month been behind the curve,” Summers said on CNN Wednesday, per the Hill. “They said it was transitory; it doesn’t look so transitory. They said it was due to a few specific factors; doesn’t look to be a few specific factors. They said when September came and people went back to school, that the labor force would grow, and it didn’t happen.”
  • Bigger picture: Reuters takes a point-by-point look at the inflation criticisms being lobbed at Biden and concludes they’re frequently off base in terms of pure economics, and that many of the underlying problems preceded his administration. But given that inflation is expected to endure well into 2022, that may be of small comfort to Democrats on the campaign trail.

If Biden and the posse cannot find a cure for this economic problem then he can kiss re-election good-bye….what is the old saying….”gonna get worse before it gets better”…..

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How About Some Economic News?

Trump tells us that since the markets are making CEOs wealthy the rest of us are doing super good…..let me say here…there is more to an economy than what the markets do or don’t do…..but hey you believe the crap you want then don’t coming crying when it all goes to sh*t.

Markets are up….unemployment is high…..foreclosures on the rise…..food expensive…….medical expensive…..but according to Trump all is well….even good.

First let’s look at Q2 (Second Quarter)……

The US economy plunged at a record rate in the spring but is poised to swing to a record increase in the quarter that just ended. The Commerce Department reported Wednesday in its final estimate for the April-June quarter that the gross domestic product, the economy’s total output of goods and services, fell at a rate of 31.4%. (This estimate, the third, is down from the initial estimates of 33% and 31.7%.) The report shows a decline that is almost four times larger than the previous record-holder, a fall of 10% in the first quarter of 1958 when Dwight Eisenhower was president. The Washington Examiner reports the biggest GDP drop during the Great Recession was 8.4%. The Q1 decline was 5%.

The AP reports economists believe the economy will expand at an annual rate of 30% in the current quarter as businesses have re-opened and millions of people have gone back to work. That would shatter the old record for a quarterly GDP increase, a 16.7% surge in the first quarter of 1950 when Harry Truman was president. The government will not release its just-ended July-September GDP report until Oct. 29, just five days before the presidential election. Many are forecasting that growth will slow significantly in the final three months of this year to a rate of around 4% and could actually topple back into a recession if Congress fails to pass another stimulus measure or if a rising number of coronavirus cases sharply curtails economic activity.

I hate to be the bearer of bad news…..but inflation is already here….at least for the stuff you buy as a normal person…..

If it feels like the price of everything you buy has been soaring, that’s because it has—even as central bankers everywhere worry about the danger of deflation.
The gap between everyday experience and the yearly inflation rate of 1.3% in August is massive. The price of the stuff we’re buying is rising much faster, while the stuff we’re no longer buying has been falling, but still counts for the figures.
Economists will be relieved that the laws of supply and demand are still working, at a time when so much in the discipline is in doubt. But for investors it hangs a veil over the outlook for perhaps the single most important issue for the markets: whether we’re headed for a future of inflation, deflation or a continuation of the past decade’s lackluster price rises.
 
Have you noticed that banks can do whatever they want and never have to pay for their stealing and perjury?
 
Take JP Morgan got caught manipulating the stock and what was the penalty….a slap on the wrist and a fine…..
Following hard on the heels of revelations that major global banks have been involved in a network of criminal money laundering, JPMorgan Chase has been fined $920 million for manipulating markets on two of its trading desks.

The charges involved the practice of spoofing—quickly placing and then withdrawing buy and sell orders to give other traders and their algorithms the false impression that there is a surge of activity.

The spoofing activity covered trades in gold, silver and other metals futures markets as well as markets for Treasury bonds and cash. It covered thousands of trades and involved numerous traders and staff at JPMorgan in New York, London and Singapore.

The Commodity Futures Trading Commission (CFTC), which conducted the investigation, said traders knowingly placed orders on trading platforms they did not intend to fulfil in the hope this would trick others and enable the JPMorgan traders to obtain a better price.

https://www.wsws.org/en/articles/2020/10/01/jpmo-o01.html

Now think back to 208….Morgan was part of the problem that cause the recession and the economic crash….and they are still doing illegal stuff and getting away with it.

And you think it is a fair and equatable system…..NOT!

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Land Of The Lost (Decade, That Is)

I am sure when the word “Lost” is mentioned we will have a wealth of people that will tear up at the mere mention of the now defunct TV show……thanks to say this is NOT about a bunch of fictional people lost on the island of Manhattan…..but rather…..

Back in the 1990’s I was a frequent player on the stock exchange…made some money…lost even more….but I recall the days of my adventurism……Japan was a shining light of capitalism especially in the later 80’s….but that was about to change…..

The economic miracle ended abruptly at the very start of the 1990s. In the late 1980s, abnormalities within the Japanese economic system had fueled a massive wave of speculation by Japanese companies, banks and securities companies. Briefly, a combination of incredibly high land values and incredibly low interest rates led to a position in which credit was both easily available and extremely cheap. This led to massive borrowing, the proceeds of which were invested mostly in domestic and foreign stocks and securities.

This popped the bubble in spectacular fashion, leading to a massive crash in the stock market. It also led to a debt crisis; a large proportion of the huge debts that had been run up turned bad, which in turn led to a crisis in the banking sector, with many banks having to be bailed out by the government.

Overall, this has led to the phenomenon known as the “lost decade”; economic expansion came to a total halt in Japan during the 1990s. The impact on everyday life has been rather muted, however. Unemployment runs reasonably high, but not at crisis levels (the official figure is a little under 5%, but this is a considerable underestimate – the real level is probably around twice that).

I will bet you wonder why I mention this……does it sound familiar?  It should or you are not paying attention to your life.

I gave you a little economic history because I see this happening in the US and I am not alone….Paul Krugman writes:

It’s not that nobody understands the risk. I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy. But in practice it’s all they can do to contain the tightening impulses of their colleagues, who (like central bankers in the 1930s) remain desperately afraid of inflation despite the absence of any evidence of rising prices. I also suspect that Obama administration economists would very much like to see another stimulus plan. But they know that such a plan would have no chance of getting through a Congress that has been spooked by the deficit hawks.

We hear daily that the US could become the next Greece because of the growing deficit….which seems to be the call of most conservatives these days,,,,,,,but I see it differently….I see the possibility of the US becoming another Japan with a “Lost Decade” and many years of suffering for the working majority of the country.  Slow growth, high unemployment and a rise in the inflation rate.