Economics today is not the simple sport it may have been at the peak of the Industrialization of the West. Anymore, it’s a multivariate kluge (or stew, if you like) and ongoing battles for supremacy of power.
You can skip ahead to the CPI and other data, but hear me out:
Part of looking into the Future involves understanding the relative ascension of different paradigms. Some that hold current fascination include:
- The Build-Back Better notion. With the U.S. in a recession which can’t be admitted, this paradigm is in trouble. So is the Slow Joe plan – now shoveled out of the press – to add lots more housing to the national production. Clearly, the Bilkem administration is spending money we do not have, on “economic projects” that won’t work, to raise our taxes that we can’t afford.
- Woke (the Joke): This paradigm is a particularly dangerous (*not to mention unconstitutional) drive to bring back racial and gender discrimination. But only the “right” end of equality. Marxist bullshit tightly coupled to smearing the line between “equality” and “equity.”
- The West War-Making Paradigm: In this, everyone is “out to get us.” Which is why the U.S. is STILL the world leader in arms production and sales. It keeps people working who otherwise might relax and do more productive things.
- The Famine Meme is growing: As a fraction of disposable income, food is going up. Figures in a sec. As it does so, the whole spending dynamic changes character. Supply and demand rules. So, when energy and fertilizer are the major victims of the UKR war – promoted by limited-thinking skill bunglers in D.C. – the result is inflation.
- It’s the same with Energy supplies as well: Buy’ed ’em erred in a nearly traitorous way by selling AMERICAN strategic energy reserves to China. Because just like fertilizer causing transient inflation, energy caused a big PITA over Summer.
- Europe is falling under Russia’s energy grip which clouds the future not just of NATO but all of Europe. EU readies energy package, countries split over gas price cap.
All of these things may be ready for Change now.
The Fed will look at this morning’s inflation results but regardless of how good or bad, its likely to keep on with plans to raise at least another 3/4’s of one percent next Wednesday.
But the multivariates are on the move.
Energy prices are coming down. U.S. Gas Prices Have Fallen for 91 Straight Days, Relieving Inflationary Pressure in the NY Times leads to speculation that we could have under $3-dollar gas shortly.
At the same time, however, goods from China aren’t getting cheaper and if anything, they’re becoming more dear. China is going through a patch of mass Covid lockdowns (*China’s zero-covid policy is notoriously strict – When will it end?). This imperils the future of America’s biggest retailers: Amazon and Wal-Mart.
The Food prices are also going up: You may remember that late in 2021, our ShopTalk Sunday columns featured building a lean-to greenhouse on the side of our double-wide in the woods. Today, we’re reading stories like Soaring Food Prices in Brazil Lead Many to Take Up Urban Farming. The U.S. must follow.
When I was born, the population of the world was 2.5 billion. Today, compounded out 73 point some years we are kissing 8-billion. More than 3-times as many humans and yet, at the same time, there has been an actual decrease is arable land. There’s a dandy backgrounder on the USDA website here. 20-pages and a quick read. Sure, lots of historical info.
Arable land in the US today is 389.8M acres. Not much over an acre per person. What we find when the data of population and arable land is mashed-up, is that arable land on a per capita basis peaked in 1961. My friend Howard (a genius financial engineer) and I have kicked-around the idea that 1960-1970 was probably Peak Prosperity.
That was when one fulltime working person in a household could support a family of four or five. That was when the stay-at-home spouse handled chores like teaching about “birds and bees” as well as doing home gardening. Fruit trees, canning, and berry-picking to make jelly were enjoyable parts of my own inner-city youth. Too much of which has been taken over by bureaucratic government expansion bent of equity not equality. (One is a value, one is a stick-up.) Yes, paper rules life – a laughable mental disease, but media doesn’t offer the cure.
The longish and rambling point of this? Just that we are likely to see another economic collapse withing two-years. Despite financializations (and government asset-stripping – our topic tomorrow on the Peoplenomics side) the hardcore reality of too many people approaching the edges of the Petri dish will not go well. Which is why we downscaled early, got debt-free, and volunteered for a lower-income lifestyle in the woods where we can grow things and find game.
Banker’s look are baselines as semi-stable and make judgments on paper. Thereby remaining semi-detached from Reality and prone to policy errors. We expect that “right policy” will remain missing on the legislative side, leaving the Fed only paper games to play. America needs a serious green-vamp. But only climate extremists get the press because in the f*cked up world of today, it’s the monetization of problems – not their solutions that matter.
If you don’t believe me, look at Steve Bannon’s case or the democrat party still running Trump and abortion as issues. Ya’ll have fun.
Americans can’t even solve yesterday’s problems which therefore creates tomorrow’s additional crises. We try to think a little more proactively, than that.
The CPI Report
Hot off the BLS press site:
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in August on a seasonally adjusted basis after being unchanged in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 8.3 percent before seasonal adjustment.
Drilling down into the details: Energy moderated but look what rose:
Year-on-year food at home was up almost 12% and that’s the kind of rotating paradigm problem the Fed has. That as the inflation less food and energty being up 6.3%. Futures were up 200 after the numbers, but let’s see if this – being a Gann day – falls apart towards the close if not earlier.
This will all weigh on the Fed next Wednesday. But, given the s0-called dual mandate, they can’t treat socially transmitted insanity; only issue economic pills to swallow.
The NFIB Data
Another one of those press releases we look forward to sharing:
WASHINGTON, D.C. (Sept. 13, 2022) – The NFIB Small Business Optimism Index rose 1.9 points in August to 91.8, marking the eighth consecutive month below the 48-year average of 98 but reversing some of the declines in the first half of the year. Twenty-nine percent of owners reported that inflation was their single most important problem in operating their business, a decrease of eight points from July’s highest reading since the fourth quarter of 1979.
Here’s the guts of it:
- Small business owners expecting better business conditions over the next six months improved 10 points from July to a net negative 42%, the highest level since February 2022, but a dismal outlook.
- The net percent of owners raising average selling prices decreased three points to a net 53% (seasonally adjusted), still a very inflationary outcome.
- The net percent of owners who expect real sales to be higher increased 10 points from July to a net negative 19%, but owners still want to hire.
- The Uncertainty Index increased seven points to 74.
Oh, and as of this morning the USA is $30,894,094,123,383.54. But, when you put compound interest into it, the real debt is closer to $100 trillion.
Various and Nefarious
(Or Dumb and Dumber…)
Monetizing Hunter Biden: We rather expect the Miranda Devine stories in the NY Post and her book “Laptop from Hell” did good things for circulation. We have to wonder if New York magazine has now picked up the scent rolling with The Sordid Saga of Hunter Biden’s Laptop (nymag.com)
The Robots are coming! The Robots are coming! (Aye, robotics…): AI creator warns of ‘apocalyptic’ artificial intelligence that will replace need for humans. Conveniently for class this morning a case study as Uber Eats ditches delivery drivers as it rolls out self-driving cars in weeks in 2 states – is it coming to your city? And they are not alone: Robot-run SF restaurant Mezli opens near Chase Center. Homeless outside and robots inside. What could possibly go wrong?
The Good News behind flooding: It might kill the fire season? Satellite photo shows Tropical Storm Kay over California – Los Angeles Times. It’s getting hard to figure the worst parts of life in SoCal: The fires, the mudslides, or Gavin Gruesome. Admittedly, it’s a tough call and seems to depend on whether you drive an EV… So far, the rains haven’t put the kibosh on the Mosquito fire up the Sierra a way.
Paranoid? Yes, THEY are tracking you: NSA secretly collecting Americans’ phone call records.
Does anyone really care? 2022 Emmy Winners List – Variety
A more useful data set to look over: The Tax Foundation‘s Tax Map Tuesday feature today is property taxes by state. New Joisey is the highest followed by Illinois and then New Hampshire and Vermont up in Bernie Lands. Texas is #6 and the lowest three include Hawaii, Alabama, and Louisiana.
Remember in the Great Depression, stories about bankers throwing themselves out of building windows? Well, every Depression is different, and the users of gravity are different this time: Russian Executive Falls Off Boat in Latest Mystery Businessman Death. Falling off things is hot couture in Russia now.
And here’s that Nation of Peace, hard at work with your tax dollars: U.S. Nuclear Missiles Are Outdated. Fixing Them Is Risky. We may have overcrowded prisons, rotting bridges and roads, hungry people, and extremely high taxes. But doesn’t it make you proud that in addition to gender-peddlers, we’re getting the most up-to-date nukes? Yessir, warms the heart in a flash…
Write when you get rich,