Reader Note: Added estimated reading time (@275 wpm) to the top of posts. Reading time doesn’t include comments. Can add, tho, if anyone gives a rip…
Inflation is about to rip everybody a new one. If you haven’t been shopping lately, that is.
I assume you know – as was true back during Jerry Ford’s Whip Inflation Now campaign in the early 80’s – that the reason D.C. is so slow to respond to real people’s inflation misery is that No One in the District actually shops. Yeah – that kind of time waster is sh0veled off onto staff.
Not kidding about this – interviewed a congressman years back who as much as admitted that’s the case. OBVIOUSLY He was too important to go to the store. (Too busy not reading legislation, maybe?). Thing is these horse’s asses in D.C. are insulated by housekeepers, congressional aids, and franking privileges to worry about something so pedestrian.
Still, as the NFIB Small Business Optimism report crossed this morning, it seems that people WHO ACTUALLY WORK for a living have noticed the prices-rising on shit left and right:
“The NFIB Small Business Optimism Index increased slightly in December to 98.9, up 0.5 points from November. Twenty-two percent of small business owners reported that inflation was their single most important problem encountered in operating their business. Price raising activities have reached levels not seen since the early 1980s when prices were rising at double-digit rates.
“Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive,” said NFIB Chief Economist Bill Dunkelberg. “Inflation is at the highest level since the 1980s and is having an overwhelming impact on owners’ ability to manage their businesses.”
Tomorrow morning, we’ll have the federal Consumer Price Index report over on the Peoplenomics side of the house.
Inflation Calculus, Covid Lies
Jay Powell goes up the Hill this morning amidst a media clatter that includes:
- PRECIOUS-Gold gains as U.S. dollar, yields pull back before Powell testimony | Nasdaq
- Federal Reserve’s Powell: High inflation ‘exacts a toll’ | WGNO and…
- crypto news: Crypto market awaits Powell’s testimony amid inflation worries – The Economic Times (indiatimes.com)
Ure has a new Crackpot Theory that neatly explains what may be going on.
First, you have to know there is a Real Economy and there’s a Fake Economy. Let’s get Real first…
Real Economy 1: Blame Government
In the real economy, there are a bit fewer people working than in, oh, 2018. But, there are a million (or more if we could ever count border-jumpers) in the country.
In California, the idiots are out to give free healthcare to non-citizens which should scare the hell out of you! I know: “Who the f*ck are these people?” Yet here it is California would be first state to offer health coverage for all immigrants under governor’s proposal. Legal and not.
Down this rabbit hole we find a spinning vortex reality as:
- Mexican border jumpers come here for free healthcare.
- U.S. middle class eyes going to Mexico for cheaper major surgeries.
- And the middle-upper in the US stay put to pay for all this shit.
(Look up: Circular Reference to comprehend how crazy things are.).
Slowly, we sneak up on back alley financial rape by democrats who quietly admit to scheming California Wants to Double Its Taxes | National Review.
So, our first (and obvious) is that increasing spending by democrat bleeding-budget liberals will hose actual working people who pay taxes. But, even here there is Truth: Blue states are blue because the free lunch party gives working people The Blues!
Real Economy 2: Second Point
Nothing right now is terribly logical. Because, if millions had really died of Covid, houses would be popping up on the market all over the place and that over-supply from “homes of the dead” would see housing prices crater. They’re not.
What’s more, if all those people had died (and no one was going anywhere) wouldn’t used car prices be lower (on a larger supply, right?) instead of higher? Yet here we see illogic again: Just this morning on the Fort Worthless media we caught Why are used car prices going up? | wfaa.com. Supply chain as an offset?
And if Covid had killed off millions (or whatever the number is) wouldn’t there be no demand? So, why all the help-wanted signs?
See, this kind of stuff just makes me crazy.
Real Economy 3: SAR’s Matter
All of this rolls around to Standard Accounting Ratios. Which Really Matter.
When America was founded, the cost of government was nearly ZERO. Oh, sure, some bread for the Founder’s army and we’ll cast a few bullets. But, essential zero cost.
Number of government employees today? All levels? About 21 million.
Standard Accounting Ratios can be used to track the growth of government work (as a percent of population over time). No one does this because nobody wants to admit that we’re about halfway through the death of the democratic republic and moving headline into George Soros’ dream land of “Corporate Captive Socialism.” Whee!
Once upon a time government was a one percent overhead number. Today, not only are there 21-million (many more since Covid) but that may not take in all the educators who live on gov dough AND the Regulatory Employees. See, give a group (Like OSHA this week) power to over reach and guess what they will do… Courts, being part of government will side with (don’t look too surprised here) colleagues in government because that’s where Nuevo Venezuela is headed. Socialism-communism.
But, I digress.
Here’s the Crackpot Theory
Ure’s explanation for the present financial insanity is considerably easier than Jay Powell’s soft-shoe which will come later today.
It simply explains that due to financial gearing (leverage in America, gearing in Europe) there is a “product and price equilibrium defended by financializations.
And it starts with the Fed.
- Let’s say you have a 1% prevailing rate and $25 trillion of GDP.
- At 2% rates, the economy can operate at $30 trillion GDP.
- At 3%, perhaps $35 trillion GDP.
- At 0.5%, though we head for $12.5 trillion GDP.
- And at 0.25% rates we go toward $6.25 trillion.
So as the inflation rate goes up (on rates controlled by the Fed – and megalomaniacs in Sac-demented and govnah Gruesome, one of the Golden Goose killers, as we see it), the Fed will make up all kinds of excuses.
What’s really going on? Nothing.
See, there is a lot of deflation left in the system (so gold hasn’t cratered) but the hope of inflationists keeps BTC from falling under $40,000 for long (for now).
And at the same time, a second Jay Powell dance number looms to cover Fed Vice Chair Clarida to step down early following scrutiny over his trades during pandemic (cnbc.com). Seems to us ALL Fed officials with access to data are using insider dope to trade. But maybe if we could monitor the NY
Seeing the Future – Kissing Channels
In our scribblings around here, we are constantly looking at wave counts and trend channels (MACD, OBV, and assorted stochastics) for insights. Most times, though, you can simply look at a trend channel and see how things are setting up based on futures prices ahead of the open:
Looks to us like the market will pause for a bounce off the trend line and then either rally or collapse, depending on media hype.
For now, though, are confidence in the market is 100%. Markets are always right. It’s just that whether the Pollyanna’s or the Grim Reaper will be along as a result is never quite clear.
Slather on a thick coating of bullshit as the media hype is up, up, and away in stories like US calms European allies’ fears over its talks with Russia over Ukraine, World News | wionews.com. WTF? These lil gems come from Wendy Sherman, another Brandon appointee who was involved, for example, in the Obama Iran giveaway plan. I mean, what could possibly go wrong, huh? Pallets of cash, anyone?
Well, I mean other than Russia Positioning Helicopters, in Possible Sign of Ukraine Plans – DNyuz. Weekend of the 21st to 23rd would be a reasonable bet, based on arms movement and jaw flaps.
Ure’s (in case you hadn’t noticed) cynical view is if we couldn’t trust Biden on masks and vax, why would Europe trust his puppets on big-shotting Russia? But we’re willing to be proven wrong, but since that rarely happens…
Biden has, in our estimate, chalked up a remarkable string of losing policy moves including (besides Ukraine) ‘We have gone backwards’: Covid confusion snarls Biden White House. Amazingly, not one communist leaning social media outfit has the balls to ban Biden yet. He doesn’t do social well.
Speaking of Covid (and bad leadership, in spades): Covid live: most Europeans could get Omicron by March, says WHO; China locks down city of 5m people. Beyond Xi’an? OMG. And Canada’s child prince is pushing 4th jabs already. Yougeau, kid! Hell, go for an even half dozing for Canadians.
Snots and Dots
No matter the hype (Coldest air in three years coming to parts of the country (nbcnews.com)) it’s still just winter.
War Games Deluxe Home Edition: Unconventional warfare exercise being staged by Army in NC | Charlotte Observer. Being played on private lands? Are landowners being paid? How do we get in on this? Although, so far, the biggest arms used here have been .50 cal.
It’s news, but: Word that In 1st, US surgeons transplant pig heart into human patient | AP News reminds us most people don’t have much heart – pig or otherwise – in today’s whirled.
Cold and clear the order of the day here. Upper 20’s at click time. But highs by Friday should be up to 70 again. Not quite up to our usual BBQ weather but moving that way.
More in PN tomorrow and here’s Thursday.
Write when you get rich,