Producer Prices and Deflation Notes

I know people don’t like to think about it, but if yesterday’s incredibly tame Consumer Prices weren’t bad enough, even with the Retail Sales numbers (which were saved from total disaster by auto sales), this morning’s report on Producer Prices is further evidence that we’d skirting the edges right now of a deflationary disaster:

The Producer Price Index for finished goods declined 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.1 percent in September and rose 0.3 percent in August. At the earlier stages of processing, prices received by producers of intermediate goods declined 0.4 percent, and the crude goods index decreased 0.9 percent. On an unadjusted basis, prices for finished goods advanced 0.3 percent for the 12 months ended October 2013.

Finished Goods deserve some discussion:

Finished goods In October, the 0.2-percent decrease in the finished goods index is attributable to prices for finished energy goods, which fell 1.5 percent. By contrast, the indexes for finished consumer foods and for finished goods less foods and energy moved up 0.8 percent and 0.2 percent, respectively. Finished energy: Prices for finished energy goods moved down 1.5 percent in October, the first decline since a 2.5-percent drop in April 2013. Nearly all of the October decrease can be traced to the index for gasoline, which fell 3.8 percent. Lower prices for diesel fuel and residential natural gas also contributed to the decline in the index for finished energy goods.

The continuation of deflation means several things, not the least of which is people on Social Security will likely see little, or no, increase next year.  And, it also means that when the budget time out is over, we will be back in crap soup as both political parties seem more prone to have testosterone disease rather than deal with the fact that in a period of deflation, falling tax revenues might result, and that’s a very, very unhappy prospect to consider.

Still, the Happy Talk Choir down on Wall St. is peddling the idea that this is somehow good news.

Its just like being in an airliner when the captain comes on the intercom, just as you notice the eerie silence since both engines quick and he tells you:  “The good news, ladies and gentlemen, is that we’re now one of the most efficient airliners every to fly!  Our fuel mileage is incredibly.”

And like the airline, our “mileage will seem dandy” while it lasts.  And that, like the airliner, will be right up to the moment of impact.

Doubt it?  The futures show the Dow up 53 this morning, and for Elliott fans, this sure sniffs like a minuet 2 after yesterday’s drop.  The week is already looking like a loser, but it wouldn’t be the first time I’ve been wrong.  But, it sure looks that way at the moment.

Tick Tock

Iran says enrichment is ‘not negotiable’ as Geneva nuclear talks continue.  Whatever is cobbled up will no doubt NOT be acceptable to Israel, and then it’s just a matter of time until we see mushrooms.

Appeasement doesn’t work, but then again modern  state-craft is more about pose than goes.

Misleading Headlines?

This is a classic:

WTF – rare?  Is this why the blow up model airplane industry is the fastest growing sector in the defense industry and did this headline writer not read the underlying story?

We’ve come down with a case of drone madness and the word rare is used?  FMTT; deception and misdirection are at every turn, Mycroft.

More after this…

What Fourth Amendment?

Unreasonable search and seizure seems to be another missing victim of the police state militarization trend in ‘Merica.

This report that outlines the case where “North Texas drivers stopped at roadblock, asked for saliva, blood” samples.

Outrageous?  Or science….  depends, I suppose, how many brown  tactical shirts you own.

This – and a host of other government behaviors – are why articles like “America has entered a new level of Tyranny” are popping up on the net.

Dope Pioneering and Down-Renting

Our Winnipeg news analyst fellow has been quiet, of late.  Until he dropped us a line about “Washington I-502:  Journeying with Atahualpa…”

Dear Mr. Ure,

Washington state may be adding newcomers to its population as the frontier opens to applicants for the three tiers of new marijuana licenses. Will the hoped for retail price $12 per gram include the 25% tax rate assessed at each tier? Presumably 6.5% state sales tax plus city tax ranging from 0 to 9.5% is extra. One is left to consider whether official sales can light up against product from the established cartels who can’t be expected to miss green signals in the marketplace.

You may note from the state board link above that applications are invited for inspector positions. However unlike imbibing sommeliers who engage in a complete  sensory experience, budding inspectors will be tested for marijuana usage. Therefore, inhaling is not recommended,

As the economic stimulus fix for what ails no longer cures, welcome to the expanding world of drug stimuli.

By the way, millennials in the old world are feeling let down too.

Speaking of down-renting, my son and I have been having a number of good conversations of late about his New Minimalist ways.  While it doesn’t have the development potential in terms of prepping that a conventional home does, he makes the point that cheap living so he can “stack cash” is how America’s young are thinking.

We’ll tackle the knock-on implications of Millennial Minimalism  this in an upcoming Peoplenomics report.  In the meantime, Peoplenomics 613-B (June 1, 2013) is closely related.  That’s our discussion about digital microhousing.

Given where we are in history, migrant dope farmers and perhaps a new book “Bud of Wrath”  will come along…  I’ve been thinking about writing Jack & the Wed Fairy, but it may already be done.

JFK MemeroMania

Should be over by Sunday, but in the meantime, Rolling Stone’sJohn F. Kennedy’s Vision of Peace:  On the 50th anniversary of JFK’s death, his nephew recalls the fallen president’s attempts to halt the war machine…

Ure’s Axiom on War:  The main problem in the world is that just like the classic rise and fall of the familiar price demand curve, humans follow a similar trajectory…

People people aren’t worth much, as the economic activity during peace is low.  But at the other end of the spectrum, there’s not much economic activity by the dead.  Hence, we conclude, war and scarcity are the tools by which maximum human effort may be extorted from otherwise peaceful citizens.

Now that we’re clear on that part of how the world works…You can pop over to the Cycles Research Institute paper by Edward R. Dewey here and learn something more…

Passings:  Evergreen Airlines

A part of Oregon aviation history will be closing down at the end of the month:  Evergreen Airlines, main subsidiary of  Evergreen International Aviation.

Wikipedia has a comprehensive backgrounder over here.

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