09/16/22

Embedded Inflation

Do y’all recall when inflation was “transitory?” When the Secretary of the Treasury and the POTUS used to assure us that inflation was going to come and go? That the target would continue to be 2% – which, in fact, it had been?

Well it’s more than a year later and, clearly, that is not going to happen. In fact, we are in this inflationary spiral for the long term — meaning three years until there is any relief.

How did we get here, Big Red Car?

Let’s review the bidding to see how we got here, shall we?

This chart is not lying to you. Study it.

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08/11/22

Testing The Depth Of American Stupidity

Yesterday, the Consumer Price Index report came out showing that the CPI increased by 8.5% (seasonally adjusted) year-over-year. This means that the CPI is 8.5% higher than it was in July 2021.

Wages were 5.5% higher, so you only lost 3% in buying power. Haha. Sorry.

[I personally find this incomprehensible as every commodity and food stuff I look at is wildly more expensive over the last year than 8.5% — eggs are up by 40% — but that’s just me.] Continue reading

05/12/22

The Grinding Pound of Inflation

Ten minutes ago, the Bureau of Labor Statistics released its Producer Price Index numbers for April 2022 – this is, of course, a month in arrears. The print was 11% meaning the cost of final demand goods from producers was up 11% when compared to April 2021.

These are Jimmy Carter numbers.

This is the fifth month in a row in which the annualized increase was double digits — again, when compared to a year earlier. Continue reading

12/15/21

The Power Shift — Workers Of The World Unite — Inflation

In the changing world in which we live, even the most Old School manufacturing companies are finding themselves having to change their ways to find, hire, and retain workers.

John Deere makes farm and construction equipment and its work force is unionized under the United Auto Workers.

Production lines at Deere are hard places to work and it takes a toll on a woman’s/man’s body.

The UAW has had a hard time convincing Deere management to increase wages and the UAW would admit that for the last 20-30 years they had their asses handed to them in every contract negotiation.

Meanwhile, the company has done well with a CEO making $16,000,000, a 160% increase when compared to 2019. This is 220X the average worker at Deere.

“My name is John May and I’m doing good. I’m the Chairman of the Board of Directors and the CEO of John Deere.  Let’s play 36?”

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12/13/21

The Inflation, CPI, PPI, Earnings Boogie

I think everyone in the United States understands we have entered a period of increasing prices — inflation. Nobody thinks it is actually going to be transitory.

Even the Biden admin says it’s going to be here through the end of 2023 after suggesting it would magically disappear by the end of 2021. Nay, not so.

Those who are students of the economy will fairly point at the extraordinarily naïve energy policy actions of the Biden admin as a trigger point or at least a milestone.

Nobody has missed that the price of gasoline has doubled since Joe Biden took office.

Glendale, California

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11/27/21

Understanding Energy Pricing

It is very easy to understand gasoline pricing — you drive up to the pump, study the price of different grades of gasoline, insert your card, and pump your gas.

[The price of gas taken together with the price of groceries makes one as intimately knowledgeable of the state of inflation in America as a Nobel Laureate economist.]

Today, when you fill up it costs about twice what it did when Joe Biden was elected President.

Glendale, California — I have a 24-gallon tank. Do the bloody math. Ouch!

But, what really controls the price of gasoline? Is it crude oil prices? Continue reading