(26’30”N x 89’ 60”W or about 420 miles south of Houston)
The Consumer Price Index numbers Thursday didn’t wiggle the markets much. Neither did the FCC decision, which we’ll get to in a sec. Today, however, the market may turn tail for a while, depending on if anyone figures the punchbowl has been spiked.
There’s the selection of headlines that are deflationary in tone:
- Consumer prices are dropping in Spain, which means the ECB will likely have to pony up for another print money using the plausible deniability of Quantitative Easing.
- China keeps moving towards deflation, too.
Our first major breaking news today is the GDP report, a nearly incomprehensible mish-mash of self-referential mumbo-jumbo, sounds pretty good:
Real gross domestic product -- the value of the production of goods and services in the United
States, adjusted for price changes -- increased at an annual rate of 2.2 percent in the fourth quarter of
2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the third
quarter, real GDP increased 5.0 percent.
The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.6
percent. With the second estimate for the fourth quarter, private inventory investment increased less
than previously estimated, while nonresidential fixed investment increased more (see "Revisions" on
page 3).
The increase in real GDP in the fourth quarter reflected positive contributions from personal
consumption expenditures (PCE), nonresidential fixed investment, exports, state and local government
spending, private inventory investment, and residential fixed investment that were partly offset by a
negative contribution from federal government spending. Imports, which are a subtraction in the
calculation of GDP, increased.
The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in
imports, a downturn in federal government spending, and decelerations in nonresidential fixed
investment and in exports that were partly offset by an acceleration in PCE, an upturn in private
inventory investment, and an acceleration in state and local government spending.The Baltic Dry Index was up 7 points to 540 this morning, still 2009 levels, impacted with shipping company bankruptcies in the last couple of weeks.
When I looked, stock futures were about flat.
Eventually, the shopkeeper economy will run out of customers and, when it does, things should turn ugly quick. Already this week, we’ve seen JP Morgan/Chase begin moving toward charging for some deposits (which is what negative interest rates are) and that’s how “money in the mattress” became a popular phrase in the last Depression.
Today, in the “new and improved” US economy, you’re only good to maybe $2-thousand dollars of bed money. After that, it will be assumed that you are a drug dealer and the money is IGG – ill-gotten gains, and that will be that.
I assume you have have your receipts for the gold and silver you bought? Because as we continue the deflationary slide, one of the future problems to be considering now is how you’re going to explain having more gold than Scrooge McDuck without a paper trail.
Not to ruin your Friday morning, but it is something to think about.
Echoes of the Communications Act of 1934
The ruling by the FCC yesterday really is a good thing, and regardless of how one thinks of the Obama administration on other issues, this one they got right.
The decision is similar in timing to the major sea-state change in 1934, during the last Depression when government moved to regulate then fledgling radio.
Essentially, the decision says cell phone carriers must as in the public interest and can’t set up special “high speed lanes” for higher paying users and thus, the idea that all bits are created equal is still alive.
At least mostly.
There’s already a special set of lanes for the military. What the ISPs were after was another way to screw consumers out of additional revenue…and thanks to a well-reasoned decision, that’s off the table now.
Verizon went so far as to put out a press release in Morse Code to underscore how they thought it was an anti-progress move.
Of course, phone companies would like to pick your pocket for additional fees, for things like connecting to your private music server or your home surveillance system. So look for the greedsters to head to court next in attempts to fatten their take.
The greedsters were looking to charge for different bit rates, so you could be driven to an Amazon Video over Netflix, depending on connection fee (bribes) would have been paid to the carriers for preferential bit rates.
So yes, Obama’s regime did get something right and it’s in the public’s interest. No matter how the corporate hucksters try to paint it the other way.
Still, as a reader in Idaho puts it:
Just finished your posting, the part about the 1934 communications act and gov’t power struck home….remember what else happened in 1934? Like the NFA, which prohibited Americans from possession of many types of smoke poles and mufflers?
