Thursday Morning Fairytales: What Deflation?

(Near 20’03” NH by 86’23.5” W – about off Cancun, Mexico)

Peoplenomics Subscriber Note:  The regular Saturday report this week will be posted on Sunday afternoon because I need a lot more bandwidth that what’s here shipboard to run www.nostracodeus.com software scans and  get a better bead on what lies ahead.

We begin this morning with the tale of the three little pigs:  This one printed money, this one printed none and hoarded gold, while the third little piggy was overthrown in a “peoples revolution” which is why neither the proletariat nor royalty can be trusted.

Of course, neither can the bureaucrats since they all work for royalty, and this tees up our next fairytale:  The Consumer Price Index press release, just out.  Nitro pill ready?

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.7 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.

Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment. The energy index fell 9.7 percent as the gasoline index fell 18.7 percent in January, the sharpest in a series of seven consecutive declines.

The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1 percent had the gasoline index been unchanged. The fuel oil index also fell sharply, and the index for natural gas turned down, although the electricity index rose.

The food index was unchanged in January, with the food at home index falling for the first time since May 2013. The index for all items less food and energy rose 0.2 percent in January. The shelter index rose 0.3 percent, and the indexes for personal care, for apparel, and for recreation increased as well. The medical care index was unchanged, while an array of indexes declined in January, including those for household furnishings and operations, alcoholic beverages, new vehicles, used cars and trucks, airline fares, and tobacco.

The all items index declined 0.1 percent over the last 12 months, the first negative 12-month change since the period ending October 2009. The energy index fell 19.6 percent over the span, with the gasoline index down 35.4 percent. The food index rose 3.2 percent, and the index for all items less food and energy increased 1.6 percent.

On the Peoplenomics side of the house, I explained yesterday how you are getting shoved into the poor house while at the same time the banker class is worried about deflation.

Vastly simplified, of course, if you don’t count food and energy costs, core PCE will be down and way under the target 2%.  This morning’s data hints at more serious deflation, so don’t worry about a Fed raise just yet. 

And thus, 16-days later than is acceptable is how this morning’s “we’ll get around to it” numbers played out.

As for market reaction?

Stock futures were about flat, oil down a buck.  The herd isn’t sure if this price decline stuff is good or bad.  Does argue for a drop in the 10-year Treasury later on.

Gold being up may not be directly indicating inflation in the wings – could just be the reported government investigation into big bank gold price suppression is getting up steam.

I’ll leave it to you to decide which of the three pigs you want to model your personal portfolio on, but paid up property in a low tax/rent area and precious metals holdings since 2003 has been a reasonable thing.  Even after punitive taxes on the metals, which somehow don’t qualify for long-term gains for the physical. 

Got to admire how the money-printers snuck that in.  Paper trumps physical, but only for so long.  Then the paper collapses and we’re patient.

Obama’s Blame Game

Some of my best friends are or were liberals.   I recommend counseling because everyone’s a crook in today’s world – and everyone plays the Blame Game version of House of Thrones.

This is not to say Fearless Leader is a liar however; we live in a land where things are self-evident.

Take, for example, his blaming  – six years in – the Bush administration for the immigration problem.

Yes, boys and girls, six years on this fellow it still trying to blame everyone but himself for a) the swarming hoards of illegals and the b) tax breaks  for illegals and c) having the option to let illegals who are DUI/DWI off the hook, and shipping illegals to innocent cities.

There’s a reason former henchman Rahm didn’t get swept back into office and will have to face some of the music up in Chicago.  People may be wising up.

“But Wait, There’s More!”

Then there’s the matter of Internet pricing and access.  The FCC is expected to begin issuing what’s bound to be a set of rules on internet access.

A couple of (republicorps) are disappointed (and whining) about how the head of the FCC didn’t come to confessional on the Hill before the report due out today.

Meantime, George Sorespot and the Ford Foundation have been piling in the dough in support of “net neutrality” but since both sides claim their stand is “net neutrality” it’s a little absurd.

I’m deeply in the “all bits are created equal” camp, myself.  Big corps want to be able to pay for bigger bandwidth costs by higher rates.  However….

This gets us to the lack of a real presidential sales job to promote the rollover of ‘Merica to fiber as part of a national infrastructure upgrade.

This is just one of my many disappointments in Obama.  I don’t see he’s done much to rectify the busting up of black families, an unintended consequence of goofy welfare rules, either. But that’s a conversation for another day.  Unless you want to go over how another Obama appointee candidate wants to release illegals; I mean that’d be fine.

I should simply note in passing that keeping people poor and in the clutches of the Nanny State has become the ruling business model, as corporate-run prisons, social service agencies, and toll roads all go to point out.  It’s also what healthcare “reform” was all about:  Mandatory profit-making for health insurance companies.

New Woes for WhatsHerName

Yes, Hillary and Bill seem to be at it again:  While She For Whom I Will Not Vote  was busy playing Secretary of State, the Washington Post has a smashing piece on how foreign governments were heaping money into the Clinton Foundation.

This is not to say the Clinton Foundation doesn’t do good work, mind you.

It’s just that the Clintons continue to ignore one of the tenets of good government taught me by my long-ago mentor, past Seattle City Council president and county Superior Court judge:

You can’t just follow the letter of the law.  You need to avoid even the appearance  of any conflict of breach of the public trust.”

By this simple measure, as I see it, both the Clintons have failed to maintain that trust.  Far as I can figure, anyone who’d give a dime to Hill’s 2016 scampaign ought to seek  remedial accounting courses.

You can’t outbid the big guys and go read the numbers.  This is more like eBay and America.

Just like the insiders get first whack at IPO’s based on portfolio size, so to the American Kelptocracy (like the Bushes and Clintons) “work the circuit” to buy the job.  T’ain’t right. But it is what it is.

I’ll take an honest socialist, like Senator Bernie Sanders over checkbook republicans and democrats any day.  At least he’s consistent and you know where he’s coming from.  Socialists in conservative’s clothing?  No thanks.  Lots of ‘em around, though.

Checking the various administration website makeovers for the White House, ever notice how there’s no “Bad Sell Claim Form?”  There is on a more honest auction site like eBay.

The Dope’s In Washington

Maybe now that marijuana is legal in the District of Coercion, things will mellow out a bit. 

I’d start ‘em off slow on a sativa (B-52?) and if we can’t figure out a flat income tax with a tax credit for under $50,000 annual incomes, we move them up to a Purple Kush, or so.

Maybe they’re already on ‘shrooms…that would explain a lot come to think of it.

This May Not Matter

But some new science being reported explains a bit more about how the Universe evolved.

I’m giving Universe 50-50 odds of outlasting me, but it’s odds seem to be going up daily.

Comments

Thursday Morning Fairytales: What Deflation? — 5 Comments

  1. How to avoid punitive taxes on precious metals? Start a business that uses the stuff in it’s every day operations such as a jewelry maker or a dental lab. Sales are just regular business and scrap refines, minus 10% or less, are just added back to the top line. These business’ are also a good way to invest in PMs as well. The mark up by industry suppliers is very tiny compared to coins and bullion from traditional investment sources.

  2. “the swarming hoards of illegals and the b) tax breaks for illegals and c) having the option to let illegals who are DUI/DWI off the hook, and shipping illegals to innocent cities.”
    Simple to fix easy peasy.. just go Adolph on them while they are crossing the border. go Adolph on anyone hiring them as well as the president of the company and the board of directors of such company or the landlords renting to them and seize all of their assets.. give those living here ten days to either move back or get a visa or go Adolph on them. It wouldn’t be nice but it would solve this whole issue. No body in their right mind would want to come to a land with the knowledge that once discovered it was over as well as any company big or small with that very same knowledge .. Or let them come on over as long as they don’t have a criminal record to work and raise their families charge them a non resident tax along with all the other taxes associated with being a citizen to our country without benefit of any of the perks until they become a citizen of our country. no huge expense of a fence that will end up being like the Berlin wall that won’t work no huge defense costs with manning such a wall and will increase a tax revenue that as of now is non existent.. but then that is my opinion and not one that is favored by many.

  3. “Busting up black families….. clutches of the Nanny State”

    And the question remains the same – Who benefits?

    I’ve learned recently about the ugly, deep-seated racism (yes, racism) that blacks have against whites. It’s not about long ago slavery, it’s about white privilege… NOT having the GOVERNMENT system keeping one down. Now I didn’t create the prison system that target blacks or other ethnic groups, I didn’t create the welfare system (food stamps, wide disability net, section 8 housing traps) but the good blacks and other ethnic groups must blame someone and that someone is white, as in all whites (even George.)

    It’s not a happy accident. Our future is about to change dramatically and everyone is targeting that evil white guy. Who will be the next fall guy?

    How was Brian Williams(most respect white news guy) able to run his so-called story on the newscast when most people in his NBC news office knew the truth? Brian had his so-called story blasted on the Megatron at the hockey game, who arranged for that? –> It wasn’t a happy accident.

    • Yep, full out war on the white guy now…it is pretty apparent…not under the table anymore.

  4. Banker class worried about deflation. I don’t get that. With deflation the value of paper assets remains the same. With inflation the value of paper assets decreases.

    My home and the loan in a deflationary environment gets harder to pay, the value of my asset and income goes down while the loan stays the same. With inflation the value of my home and income go up while the loan stays the same. In my simple opinion deflation is bad for debtors i.e. fewer $’s to pay off the same loan. Inflation is good for debtors i.e. more $’s to pay off the same loan.

    Am I missing something here?