Big topic on the ham bands this morning (hi to the 3785 group) is the big wind up in Colorado. Winds hitting 100 miles an hour – along with wind-driven wildfires – are all being hotly discussed.
If you lack the license, antenna, and means to talk to locals, try stories like Colorado cities evacuated due to threat of wildfires, high winds and the related wildfires in Wildfires trigger evacuation orders in Colorado, displacing thousands.
Word from the 75-meter groups is on the order of 500+ homes and an entire subdivision leveled.
Since there is little else going on, and I found this whiteboard marker to huff, how about we make one more pass at “financial education” on the topic of Inflation?
Although the market had a modest pullback Thursday and is setting up for a small decline at the open today (On Friday, December 31, 2021, the bond market will close at 2 PM ET says my trading platform) the market has done a masterful job deluding the sheep this year.
With the modest decline at the close Thursday, the market gains this year are “only” up (using our Aggregate Index method), like so:
Thursday Aggregate close: 41, 780.18
Equivalent day last year: 34,036.37
Points gained: 7,743.81
Percentage gained: 22.7515742… percent.
Now, let me table the Case-Shiller Real Estate gains for the year to give you a non-notional asset: Home prices, says their report Tuesday, were up 19.1 percent.
Here’s how Screwing Americans Works
As I explained Thursday, the Monetary Base is up 25.5% as far as the Federal Reserve has let out of the bag (they open bags a month late to keep you from making a reasoned financial decision, which makes fleecing you easier).
Here’s the core of the scam:
If you bought $100,000 worth of stocks a year ago, they would have an (average Aggregate) price if sold Thursday of? $122,751.57.
Of this, $22,751.57 would be taxable income. Lower rate, but purchasing power may have been zero!
See the Problem? When government makes up 25.5% more monetary base, the payoff is they make oodles on illusionary gains.
There have been people (including Ures truly) calling for taxes to be based on an inflation-adjusted basis. In other words, if your Purchasing Power Parity (PPP income) didn’t actually go up, then your taxes wouldn’t.
“The IRS used to use the Consumer Price Index (CPI) as a measure of inflation prior to 2018. However, with the Tax Cuts and Jobs Act of 2017 (TCJA), the IRS now uses the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction amounts, and credit values accordingly.”
Let’s Play the Tax Game!
MFJ (married filing jointly) for 2021:
And, let’s see how that lined up this year in the IRS Advisory note which has some MFJ info:
Let’s push some numbers. First, how about the $19,900 couple in 2021: 10% pushes out to $1990.00 of tax.
This year, we KNOW that just to keep up with the rate of increase in housing prices, this couple would need to make 19.1% more. Which would point to a top of bracket for the very low-income people of $23,700.90.
Notice that IRS only provides a to poor folk’s bracket adjustment of 3.26%. Above that, up to the 12% bracket.
Let’s underline that: In a world where even Social Security went up over 5%, the IRS “process” moves the bracket top up 3.26%.
This is called “bracket creep” and it’s one of the statistical techniques employed by the insider-trading Congress to screw the poor while they make money off the backs of working people.
Speaking of which, go read Nancy Pelosi buys call options for Google, Disney stocks and get back to us with a blood pressure note. Buying Disney? Is the Covid cloud going to lift? Some insider knowledge hinted-at or just an inflation play? Way above our pay grade.
But our first point today is when government can use an artificially low “inflation rate” to get more money out of you, they will.
What’s REAL Inflation
Which brings us to offering our “Honesty in Inflation” law proposal: Make all branches of government (Social Security, Bureau of Economic Analysis, Labor Department, Census, Congressional Budget Office, and yes, even IRS, use EXACTLY the same inflation rate.
As things stand now, Congress allows dishonesty to propagate as a multiplicity of rates. I can’t see how the Founders would have stood for that for a second.
I do realize that this would jam brackets up. But when comes to economic honesty, it’s like pregnancy, there’s no such thing as “just a little honest.”
Government left that long ago.
The Joe Bumbling administration has embarked on a dangerous game of (pardon this) dick-measuring over eastern Europe in general and Ukraine in particular.
Brandon’s side reads like Biden tells Putin U.S. and allies will ‘respond decisively’ if Russia moves on Ukraine.
The reality though is that Brandon doesn’t get to really TELL the Russians much of anything. More accurately Russia Warns U.S. It Will ‘Eliminate Unacceptable Threats’ after Putin-Biden Talks.
Which is why Ure continues in a modest short position. Which the market responded to with a 90-point Dow drop Thursday and seems likely to open down another 75 early.
Although we don’t offer financial advice, our view is that people holding long positions over the holiday weekend may be off their rockers.
Speculation continues to slowly spread as to what’s really going on in Xi’an, a Chinese city of 13-million, which is just at 10-days of severe lockdown. Xi’an: Cries for help and food in quarantined Chinese city – BBC News.
The problem we’re having with this story is the Chinese reaction – which is at the fringe of their Zero Covid policy – may be driven by a (so far) hidden variable.
We continue wondering, for example, what could happen if the local rodent population, which lights off with hemorrhagic Hantavirus every fall, were to cross with a highly contagious strain of CV-19. Like Delta or Omicron.
Maybe the Chinese are operating with an abundance of caution? Still, stories like Xi’an lockdown: ‘Starving’ residents survive on a bowl of porridge do nothing to assuage our worst nightmares. On top of 2022 being the big “virus year” in my consigliere’s cycle work. China punishes people trying to flee Covid controls in Xi’an.
Meantime, omicron’s hold is gaining in Asia as Hong Kong says Omicron has spread locally despite strict rules.
While our outlook for whole-year 2022 inflation at 13.8 percent remains on the table, a couple of stories hint the crack-up of the global supply chain may have nearly as much impact as runaway compound interest on national debt, plus massive underemployment due to Covid.
See Inflation and supply chain crisis continue into 2022 along with Ikea Hikes Prices by Almost 10% Due to Supply Chain Crisis to help scale your fears.
There’s a reason we’ve been telling you to “Get your seeds and growing supplies right now!” 2022 could be America’s first “Food-Challenged” year in a long time.
Might also tuck this away as a background contexter for Ukraine war stories: SovEcon: Black Sea Wheat Crop is to Exceed 110 MMT in 2022. There’s more than petroleum in that region.
And Good Riddance to 2021: New Year’s Eve celebrations worldwide muted for 2nd straight year | CBC News.
ATR: Personal Milestones
We will be lighting up another boneless prime rib this afternoon. And some vino and micro-qued potatoes. These latter are microwaved Yukon Golds which are then put on the bread rack in the BBQ so as to get that really nice crispy potato skin.
I will go light on breakfast and pass on lunch “in training” for it all.
Probably the biggest changes around here this year were Elaine’s hip surgeries. Two total hip replacements later, we’re very pleased with the results. Although it resulted in a “management problem” for me: She wants to get up on ladders and do things. I see that as too high a risk to be allowed. Paranoia or love? You make the call.
I’m hoping to get a lot of shop cleaning and organizing done this weekend.
Oh, and the Christmas (grow) Room is on hold. Elaine hated the redwood color stain and wanted the whole thing taken down, but with a coat of oil-based flat black over the stain next week, it stays. She came up with the compromise.
Honestly, I was dreading the idea of taking down new construction. Only upside I could come up with would be how to turn a “red flagged” project into a “kit” for later use.
Charts only on Peoplenomics tomorrow. Don’t forget ShopTalk Sunday if you’re a maker of more than (just) money…
Write when you get rich (or put it off till next year, lol),