Category Archives: Economy

10/21/21

Cut The Crap — Energy And Inflation

Today we cut the crap about the impact of energy, specifically rising energy prices, and inflation.

 1. The Biden admin made some bold energy moves — cancelling the Keystone XL pipeline, mothballing drilling/leasing/auctions on public lands, cancelling ANWR development, generally pissing on the leg of the energy sector — immediately upon taking office and they have had a negative impact on the price of energy and gasoline in particular.

 2. Inflation — under control for more than a decade — has now reared its ugly head. Even Clown Princess Yellen, Sec Treas, has conceded that inflation will more than double in the immediate future.

Just ponder that one thought — a new admin comes into office and in less than nine months more than doubles inflation and they act like it was a paper cut.

 3. The price of gasoline is a cost component in every product — COGS cost of good sold, for you bean counters — made or transported in America. Everything.

Here is what YOY inflation looks like right now:

As you can see, ENERGY is the skunk at the garden party. It is a component of both Transportation and Housing.

[My personal road trip experience is that gas is up more than 100%. I like to buy gas at Sams Club. I paid $1.52/gal in Tuscaloosa, Ala a year ago. Today, it is right at $3.00/gal.]

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10/5/21

Inflation, The Skunk At The Garden Party

Everybody — meaning anybody with a functioning brain — acknowledges that the scourge of inflation is loose in the land.

The Fed — hats off to these guys for having kept inflation at below 2% for the last 10 years, well played guys — says it is “transitory” meaning it will recede, but they cannot define the driving force that will propel that movement.

Why will it recede? What will drive it back from the gates of the city? What force?

Nobody disavows inflation; they just say it is transitory, will be fine, or ignore it.

Shipping Costs as an exemplar of inflation

So, I did some research and came up with this particular example to underpin my opinion:

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09/28/21

The Debt Ceiling Kabuki Dance

Every few years, the United States rubs up against its mythical “debt ceiling,” a number which must be approved by the Congress to enable the Treasury to use debt to pay our national bills and conducts a ritualistic charade of acting like fiscally responsible adults — a bloody Kabuki dance.

Speaker of the House Nancy Pelosi and Majority Leader Chuck Schumer discussing the debt ceiling in costume of Japanese Kabuki dancers.

The debt ceiling is the maximum amount of money the US Treasury has authority to borrow in the form of bond sales.

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07/18/21

Inflation? Head Fake Or Reality?

We are told by the Federal Reserve in the person of its Chairman Jerome Powell that we are experiencing inflation, but that it will be “transitory.”

“Do not fret, dear, this inflation is transitory and you will be fine,” sayeth Jerome P during recent Congressional testimony. He then adjusts his glasses and gives you a grandfatherly look of confidence. But, should you feel good or is it all a head fake?

[Much of Christianity is built upon the notion that death is also transitory and that we shall live again in splendor with God in Heaven, but still we are dead. This is the story of inflation also?]

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04/30/21

A Hat Tip to the US Economy

I am quite bullish on the US economy over the short term — meaning until the Biden admin straps on the increased tax weights and we all try to swim with those babies drowning us. Hell, there is a great chance it may not even cross the finish line.

I am going to spend $6.3T + $3.5T and tax you back into the 1960s. Ooops. I didn’t mean to say that because I am a moderate and a unifer. Haha. Sorry. 

I like to take a look at a couple of bellwether companies to check my enthusiasm. One of those is Apple.

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04/17/21

The US Economy Is Going To Boom

Before the China Virus, the United States had the best economy in its history — since 1776 — and the strongest economy in the world. Then came the pandemic and we made some bad decisions. Economic growth declined — it contracted it — and the economy was essentially in TIME OUT.

Now we sit 15 months later with a myriad of vaccines and a steady shuffle toward herd immunity.

The whole Operation Warp Speed is a colossal success story that needs to be told. It is America at its best. Bravo and well played.

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01/30/21

Monetary Policy v Fiscal Policy — What Do They Even Mean?

Other day I am scanning a blog post from what was once my favorite blog. The author uses the words “monetary policy” and “fiscal policy” in a manner that reveals he has no earthly idea what they mean, but they sit nicely in the sentence and give off the erroneous notion that he is an erudite and educated observer of the condition of the world and our economy.

So, your Big Red Car will tell you what they actually mean.

Monetary policy and fiscal policy are not interchangeable. They mean different things.

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