Let’s hop right in to the data just out from the Labor Department:
“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.1 percent before seasonal adjustment.
In contrast to the broad-based increase last month, the June seasonally adjusted increase in the all items index was primarily driven by the gasoline index. It rose 3.3 percent and accounted for two-thirds of the all items increase.
Other energy indexes were mixed, with the electricity index rising, but the indexes for natural gas and fuel oil declining. The food index decelerated in June, rising only slightly, with the food at home index flat after recent increases.
The index for all items less food and energy also decelerated in June, increasing 0.1 percent after a 0.3 percent increase in May. The indexes for shelter, apparel, medical care, and tobacco all increased in June, and the index for household furnishings and operations rose for the first time in a year.
However, the index for new vehicles declined after recent increases, and the index for used cars and trucks also fell.
The all items index increased 2.1 percent over the last 12 months, the same figure as for the 12 months ending May. The index for all items less food and energy rose 1.9 percent over the last 12 months, a slight decline from the 2.0 percent figure last month. The index for energy increased 3.2 percent over the span, and the food index rose 2.3 percent.
Now some personal metrics.
Even though we live in the heart of Texas cattle country, you’d think here of all places, beef would be good, tender, and cheap.
Try: None of the above. The best grade of meat in town is “select” most of the time. It’s so bad Elaine will often pick up a couple of week’s worth of meat when she goes shopping up in Tyler.
Chewy? I’m telling you the steaks here may be unindicted coconspirators with the American Dental Association….they’re that hard to chew.
And worst of all? Two-bucks a pound more than last year at this time.
Another little item: I’m building this little play studio for myself and about 4-5 years back I bought some MXL-990 microphones: $39 each including shock mount. They’re over $100 a throw at Amazon, now. Sure as hell is more than 3% inflation, ain’t it?
Gas prices? OMG – something that hasn’t gone up! Actually down a few cents. But that was up in the CPI report, so look for another contained report next month, too.
In making our travel plans, I noticed that our favorite overnight stop in Amarillo went from $118 a night in March of this year up to $124 per night in August. 5% in 5 months?
The problem we have is that over time, business models collide and often, higher prices result.
For example, I was looking at an obscure US Department of Agriculture research report from their Economic Research Service (good stuff there).
What you can see is typical of what happens in all kinds of businesses: When a product is new to market (like GMO seeds, what happens?
Well, farmer’s wallets of “rounded up” if’n you know what I mean, and the price of seed becomes a bigger line item as the farmer is trying to manage their profit and loss statement.
Especially critical when farms in many parts of the country are facing record drought – that could bankrupt whole areas of the Golden Dust Bowl, formerly California.
So sure, this morning’s report is not too bad, considering the reality that lies ahead. But when our Perfect Storm/Collapse comes in a couple of years, it’s not going to be just because the Fed is raising rates: It’s because the last little bits of management elasticity are being wrung out of the system at its evolving long wave economic low.
And when the shit hits the fan, it will hit (more or less) all at once. And the “shot clock” for this will arrive about one year to 15 months from the date of the Federal Reseve rate hike, which is penciled in for Q1 or Q2 of 2014, so late summer 2016 to mid 2017 is the time to run and hide under the bed.
Say hi to the dusty bunnies for me.
And ask ‘em if they believe the CPI figures are anything more that short-term deviations from historical norms.
My Dow dart landed on up 78 this morning. Yesterday I was within 2 points and before a whole day of trading which just has to be blind, stumbling luck. I doubt today’s guess will be right, but it makes life interesting to be on everything.
More after this…
The Border War Heats Up
For many years now, about six in fact, I’ve been explaining to you how the US War with Mexico was in its incubation phase called (in militarese) a LIC….short for low intensity conflict.
Toss in some corporate greedsters and wet dreams of loopy liberalistas who thing a “soft border “zone” can work, and you have the recipe for today’s policy disaster.
One of the core issues (that we talk about here) is the matter of having two different approaches to just damn near everything one one side of the border, compared to the other. My retired Special Forces brother-in-law did most of his time as a “lone wolf” down in Iran-Contra country living in precisely the locations from where the “refugees” are coming from.
I’ve asked him to write up some of it on his website () and there two parts of “Mexico, the Eagle and the Serpent, part two) deals with the (sad) reality of now Napoleonic “justice” works there. Very much recommended because liberalistas who go to Cancun don’t have clue one about how the streets and alley deals go down in that bribe-driven part of the world.
But in the meantime, at least Texas Governor Rick Perry seems will-advised: He’s sending National Guard Troops to secure the border, something the administration (following basically the same laws as predecessors) has shown itself unwilling and unable to do.
We’re also appalled to read how US representative Luis Gutierrez reportedly is telling La Raza promoters how people who oppose illegal immigration ought to be punished.
No, I’m not sure what happened to defending America against enemies, foreign and domestic, in his thinking. But the Northeast Press is far enough away from reality (and the border) that they won’t see it…and if they do, like Maryland and Connecticut, they won’t want their piece of policy served up.
Presidential Winter Home?
Reports are rolling in that president Obama may be trying to buy an upscale home in Rancho Mirage, just south of Palm Springs.
Gosh, if his real estate agent had just taken ‘em 83 miles further south…how about something in, oh, Tecate in Baja California state?
Or will that come after annexation…WTF?
Presidential Partying, Indo-Style
From our (busy lately with real life) Indonesia Bureau Chief (and lost Son of the Republic) Bernard Grover:
Hoping we can at least get out…
Seems that hell in a hand basket is first class travel these days.
I’ve been thinking about offering to sell Indonesia voting machines, so we could know the outcome in advance….ahem….
Judgment to Russian
Meantime, the Russians have reported that a Ukraine jet was doing a close approach to MH17 when it went down, so speculation is that the whole shootdown may have been a public relations stunt to try and force Russia to cave in on a number of foreign policy points.
But, gosh, don’t you notice how well-orchestrated this whole round of Putin-hatin’s been?
As we carefully note: Everything;s a business model. Even dead people.