A Short Primer on Inflation

The markets were gaga today with an inflation report of 7.7% (annual rate) down from 8.2% the prior month (40-year high) and a monthly rate of 0.4%.

Those are the numbers, but folks seem unable to understand how they apply. So, please allow me to provide an example.

 1. Suppose a year ago, a dozen eggs cost $2.00. With me? Continue reading


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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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


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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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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Inflation Is NOT A Headfake

It is too late already to unleash any definitive knock out punch against inflation. Damn it, it isn’t TRANSITORY. Stop that nonsense.

“Do not listen to this Big Red Car. Inflation will be 2%. Trust me. OK, maybe 4%. Sorry, PPI is 8.6%, so CPI will be double digit, but it’s TRANSITORY. It’ll come down in 2030 or 2035. I promise. My husband is one of the 17 Nobel economists who says Build Back Bolshevik will cure male pattern baldness. He can’t be wrong.”

It is here; it is deep; it is pervasive; and it isn’t going away any time soon. Continue reading


Leadership Tone

Leadership is a difficult, broad subject — a constantly evolving, context-dependent, nuanced, and complex issue while being supremely personal and driven by individual style.

Leadership tone

We have spoken before about leadership style, authentic leadership voice, but today I want to speak about leadership tone.

Leadership Style

By “tone” I mean the emphasis or coloration of how the leader’s voice resonates, its intonation, timbre, or temperament, of how the leader speaks and approaches the solving of problems or meeting challenges. Continue reading


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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