Inflation.......... ?

[RUTGERS95]

That's just it. That's why energy prices are so critical too. The fed can't raise the rate much, or we can't pay our debt. Once they poofed all that money into existence, the ensured our demise. We had a slim possibility prior to that, of growing our way out of this man made debt disaster, but that's long gone now. It's simply a question of how long the sugar high will last. I feel in hand gold and silver is a good thing to have, and other hard assets, but its pretty hard to say exactly how this will all go. Trump had us on a glide path and was doing some things that had to be done at the same time. Energy price control is absolutely critical. Now we are in real serious trouble and the fed can't even do anything if they knew how and wanted to.

yeah that is not how it works nor what happened I don't even know where you get this from. not servicing the debt??????

rates can go as high as needed and for the housing people, the 2nd highest mortgage approvals happened in mid 80s when mtg rates were 18%. The interest is even less effective today than it was a decade, 2 decades, etc ago.

worry about swaps rates

 

[DarnYankeeUSMC]

Silver and gold along with crypto can be wiped out with the stroke of a pen in DC. It's been done before.

That's just it. That's why energy prices are so critical too. The fed can't raise the rate much, or we can't pay our debt. Once they poofed all that money into existence, the ensured our demise. We had a slim possibility prior to that, of growing our way out of this man made debt disaster, but that's long gone now. It's simply a question of how long the sugar high will last. I feel in hand gold and silver is a good thing to have, and other hard assets, but its pretty hard to say exactly how this will all go. Trump had us on a glide path and was doing some things that had to be done at the same time. Energy price control is absolutely critical. Now we are in real serious trouble and the fed can't even do anything if they knew how and wanted to.

I truly believe that we will have digital currency in the very near future.
I am amazed at how fast the foundation that Trump was setting up got wiped out.

 

[DarnYankeeUSMC]

What was the debt at that time?

yeah that is not how it works nor what happened I don't even know where you get this from. not servicing the debt??????

rates can go as high as needed and for the housing people, the 2nd highest mortgage approvals happened in mid 80s when mtg rates were 18%. The interest is even less effective today than it was a decade, 2 decades, etc ago.

worry about swaps rates

Better yet, what was the debt to asset, tax base, ratio at that time?

 

[BuildingConceptsllc]

yeah that is not how it works nor what happened I don't even know where you get this from. not servicing the debt??????

rates can go as high as needed and for the housing people, the 2nd highest mortgage approvals happened in mid 80s when mtg rates were 18%. The interest is even less effective today than it was a decade, 2 decades, etc ago.

worry about swaps rates

What do you mean that isn't how it works and what happened?

 

[BuildingConceptsllc]

Silver and gold along with crypto can be wiped out with the stroke of a pen in DC. It's been done before.

I truly believe that we will have digital currency in the very near future.
I am amazed at how fast the foundation that Trump was setting up got wiped out.

Sort of that's true, but they can't wipe away value that they don't set. The rest of the world likes silver and gold and always has. The US govt can and likely will do all kinds of stuff when push comes to shove no doubt, but they can only do things to what they know you have so to speak, and they can't take away the value of gold and silver across the world, just try to force you to turn yours in for a low value, then up the value after they have the peoples wealth. Yes theyve done lots of stuff like that before

 

[Hobo Hilton]

History repeating itself:
In particular, the debt problem began around 1970 when the
government decided to significantly increase spending without a corresponding increase in revenue. The
analysis suggests that the debt problem cannot be permanently resolved without creating a mechanism
to prevent the government from running persistent deficits in the future. (JEL E62, H62, H63)

Historical Federal Reserve Policies | Boundless Economics |

Ace your courses with our free study and lecture notes, summaries, exam prep, and other resources

courses.lumenlearning.com

Despite the protests, Paul Volcker was respected for the work that he did while he was the chairman of the Federal Reserve. Congressman Ron Paul was a harsh critic of the Fed, but he commented about Volcker by saying, “If I had to name a Federal Reserve chairman that did a little bit of good, that would be Paul Volcker. ” Volcker received the U.S. Senator John Heinz Award for Greatest Public Service by an elected or Appointed Official in 1983.

Historical Federal Reserve Policies | Boundless Economics |

Ace your courses with our free study and lecture notes, summaries, exam prep, and other resources

courses.lumenlearning.com

_________________________________________________________
Today:
The U.S. current account deficit widened 8.3% to $214.8 billion in the third quarter, the Commerce Department said Tuesday. It is the largest deficit since 2006. The trade gap has widened for seven straight quarters

 

[DarnYankeeUSMC]

Sure there will be value for it but where? Once the government shuts off the trade in for it, then what? How many people are going to be able to smuggle it out of the country and then what? Exchange it for pesos or something else that can't be spent? The monetary system will be digital. You will pay with a credit card or your phone. The only non digital exchange for a product/service will be black market. Beans, bullets and bandaids will be worth more than gold.

Sort of that's true, but they can't wipe away value that they don't set. The rest of the world likes silver and gold and always has. The US govt can and likely will do all kinds of stuff when push comes to shove no doubt, but they can only do things to what they know you have so to speak, and they can't take away the value of gold and silver across the world, just try to force you to turn yours in for a low value, then up the value after they have the peoples wealth. Yes theyve done lots of stuff like that before

 

[BuildingConceptsllc]

Sure there will be value for it but where? Once the government shuts off the trade in for it, then what? How many people are going to be able to smuggle it out of the country and then what? Exchange it for pesos or something else that can't be spent? The monetary system will be digital. You will pay with a credit card or your phone. The only non digital exchange for a product/service will be black market. Beans, bullets and bandaids will be worth more than gold.

At some point that may be true but that is not the case for economic disaster times and not the case for near future. Local trade and black market will take gold and silver. If/when the government starts restricting things, confiscating things, ect., people will want to trade with things they can hold in their hands, not things that the government can take or restrict over the internet. I'm not worried about not being able to buy some crap on Amazon in that scenario, I want to make sure I can feed my children and buy medicine, ect.... gold and silver are good for that and they always have been. Then there is just a matter of storing value that will ride with inflation.

 

[Hobo Hilton]

Big business has put on it's life vest....

U.S. companies bought back their own shares at a blistering pace in the third quarter, dwarfing the amount spent on key investments to help generate growth.

Share repurchases more than doubled from a year earlier for S&P 500 companies to an all-time high of $234.6 billion, according to preliminary data released Tuesday from S&P Dow Jones Indices. Meanwhile, capital expenditures increased 21% to $189 billion, which is still down 3% from the final three months of 2019 before the pandemic shutdown the economy.


“Borrowing is inexpensive for corporations right now, so financing their capital spending was expected -- but those expectations still haven’t been met,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said in an interview. “Part of the reason could be related to the pandemic, as a shift in consumer demand has fueled lots of uncertainty for businesses and makes it difficult for companies to plan ahead.”


Companies typically ramp up spending on factories, equipment and other capital goods as they grow more confident in their financial outlook and the economy. Given uncertainties about the outlook, buybacks have been a way for businesses to return cash to shareholders and have helped propel U.S. stock indexes climbing to multiple records this year.

 

[Hobo Hilton]

to be honest, we have a spending problem. People simply cannot make do with less

When I see a headline like this... I'd say the US Government has more money than they can responsibly manage.

Secret Service says nearly $100 billion stolen from pandemic relief programs​

 

[Hobo Hilton]

From the article:
To expect food prices to remain stable when the ingredients to producing it are all rocketing higher impresses us as comically stupid.

Here’s How the Energy Crisis Turns into Hunger and Then… War? - LewRockwell

We have previously warned about a whopping food crisis and supply problems in the fertilizer market. Well, now is worse because that was BEFORE we had the natural gas crisis. Why is that important? Natural gas is THE critical input into making fertilizer. Urea is essentially ammonia in solid...

www.lewrockwell.com

 

[Hobo Hilton]

December 21, 2021

The Producer Price Index for final demand rose 9.6 percent for the 12 months ended in November 2021, the largest advance since 12-month data were first calculated in November 2010. Final goods prices for energy goods increased 43.8 percent over the year ended in November; energy goods accounted for 5.0 percent of final demand spending

Producer Price Index for final demand up 9.6 percent for year ended November 2021 : The Economics Daily: U.S. Bureau of Labor Statistics

The Producer Price Index for final demand rose 9.6 percent for the 12 months ended in November 2021, the largest advance since 12-month data were first calculated in November 2010. Final goods prices for energy goods increased 43.8 percent over the year ended in November; energy goods accounted...

www.bls.gov

 

[Hobo Hilton]

Appearing that inflation is "here to stay"...... Now, that is a sobering thought.

U.S. home prices surge 18.4% in October

U.S. home prices surged 18.4% in October as the housing market continues to boom in the wake of last year's coronavirus recession.

www.cnbc.com

 

[atepointer]

Appearing that inflation is "here to stay"...... Now, that is a sobering thought.

U.S. home prices surge 18.4% in October

U.S. home prices surged 18.4% in October as the housing market continues to boom in the wake of last year's coronavirus recession.

www.cnbc.com

It's ugly as heck and when you consider the Fed's most recent inflation prediction lasted less than a week and their track record the past year.....whew. Rents/OER have yet to trickle in yet for the back half of the year either. Owner Equivalent Rents are surveyed 1 rent/6 months. 1/6th of the respondents are polled every month the rest every 6 months. Anyone apartment hunting knows the real answer to these inflationary pressures. If you look at someone like say Redfin they show what is essentially a 'live rent' vs the backward looking CPI/PCE metric does. Hold on to nuts going to get nuttier.

 

[hollowoutadime]

Expect home prices to rise and rates as well.
Nurses in the Midwest getting $97/hr. for 3 month contracts. That's before overtime. Serious shortage there.

 

[lariat]

You still have wages lagging inflation. The houses can get more expensive and people can still get financing but those chickens will come home to roost. Defaults are coming.

If the supply chain doesn’t get fixed the unemployment rate will rise. Demand will decline. The debt level of the US consumer is high. The situation is precarious.

The highest level since 2010 doesn’t impress me. Go back to the shadowstats numbers. That’s the eye opening data.

 

[Bigfatcock]

You still have wages lagging inflation. The houses can get more expensive and people can still get financing but those chickens will come home to roost. Defaults are coming.

If the supply chain doesn’t get fixed the unemployment rate will rise. Demand will decline. The debt level of the US consumer is high. The situation is precarious.

The highest level since 2010 doesn’t impress me. Go back to the shadowstats numbers. That’s the eye opening data.

Wages lagging inflation is an issue.

 

[E. Bryant]

You still have wages lagging inflation. The houses can get more expensive and people can still get financing but those chickens will come home to roost. Defaults are coming.

If the supply chain doesn’t get fixed the unemployment rate will rise. Demand will decline. The debt level of the US consumer is high. The situation is precarious.

The highest level since 2010 doesn’t impress me. Go back to the shadowstats numbers. That’s the eye opening data.

Right. And if wages aren't going up in line with (much less exceeding) the increase in prices, and if a demand collapse is somewhere over the horizon, then why would one expect inflation to continue on forever?

I'm not guaranteeing that the Fed raises rates, but that's the highest probability prediction. When they do, they will likely overshoot, and demand will collapse, and the wealth gained from appreciation in homes and equities goes away, and all of this is very much deflationary.

Raise your hand if you've seen this play out before. Feels like a lot of people are trying very hard to forget the not-so-distant past.

I'd also recommend having the plan for the opposite scenario - Fed continues "easing" with QEinfinity and inflation goes to the moon along with the price of everything. There's the possibility of stagflation as well, but that would likely require knife-edge Fed policy in conjunction with wages keeping up with inflation, and this just doesn't feel likely.

 

[Bigfatcock]

Wages will not keep up with inflation.

 

[lariat]

Wages lagging inflation is an issue.

Yes. Drive prices of everything up through monetary inflation while reducing the actual supply of goods and then attempt to increase interest rates and you effectively give everyone not a pay increase but a decrease. Add to that any pay raise you get is correspondingly taxed more; you may not make it to the next tax bracket but every dollar you earn is part of the taxing equation.

If you think this economy is hot you are fooling yourself. It looks more like a castrol motor oil commercial.

 

[DarnYankeeUSMC]

They tried raising the rate in the first year and a half of Trump's presidency. It backfired and they dropped the rate back down. Servicing the debt with borrowed money just doesn't work. What is it now? 30% of the budget goes to pay interest?

Right. And if wages aren't going up in line with (much less exceeding) the increase in prices, and if a demand collapse is somewhere over the horizon, then why would one expect inflation to continue on forever?

I'm not guaranteeing that the Fed raises rates, but that's the highest probability prediction. When they do, they will likely overshoot, and demand will collapse, and the wealth gained from appreciation in homes and equities goes away, and all of this is very much deflationary.

Raise your hand if you've seen this play out before. Feels like a lot of people are trying very hard to forget the not-so-distant past.

I'd also recommend having the plan for the opposite scenario - Fed continues "easing" with QEinfinity and inflation goes to the moon along with the price of everything. There's the possibility of stagflation as well, but that would likely require knife-edge Fed policy in conjunction with wages keeping up with inflation, and this just doesn't feel likely.

 

[lariat]

They tried raising the rate in the first year and a half of Trump's presidency. It backfired and they dropped the rate back down. Servicing the debt with borrowed money just doesn't work. What is it now? 30% of the budget goes to pay interest?

They have already telegraphed their intentions to do so.

E. Bryant is correct when he says that people are about to get caught short, just like 08-09. High prices plus low rates mean you get screwed if there is deflation or an increase in rates if you have an ARM. The only thing you can really hope for is continued price inflation of the home without general price inflation. This won’t happen. Defaults on a mass scale are coming.

 

[Bigfatcock]

Just like in 2007, I believe gasoline will be the nail in the coffin. The market started to croak when gas was over $3 per gallon a little while back. Once we hit $4 per gallon here on the east coast is when the implosion will happen.

 

[Hobo Hilton]

You still have wages lagging inflation. The houses can get more expensive and people can still get financing but those chickens will come home to roost. Defaults are coming.

If the supply chain doesn’t get fixed the unemployment rate will rise. Demand will decline. The debt level of the US consumer is high. The situation is precarious.

The highest level since 2010 doesn’t impress me. Go back to the shadowstats numbers. That’s the eye opening data.

During my life I have lived through this re-run movie 3 -4 times....... The term deja vu is starting to sound familiar.

The term déjà vu is French and means, literally, "already seen." Those who have experienced the feeling describe it as an overwhelming sense of familiarity with something that shouldn't be familiar at all.

 

[E. Bryant]

They have already telegraphed their intentions to do so.

E. Bryant is correct when he says that people are about to get caught short, just like 08-09. High prices plus low rates mean you get screwed if there is deflation or an increase in rates if you have an ARM. The only thing you can really hope for is continued price inflation of the home without general price inflation. This won’t happen. Defaults on a mass scale are coming.

What's awesome is that you don't even need an ARM to get in trouble - just a simple drop in home prices might get the dominoes falling.

The median US price is about $375,000, and the strongest thing supporting that valuation are low rates. At 3.75%, that's a $1700/month payment. Crank mortgage rates up to 8%, and the same monthly payment only buys a $235,000 home. So what happens? Either everyone finds a magical way to throw another $1000 net monthly income at their payments, or home prices will drop. Now maybe they don't quite drop the full amount that my math suggests, but taking a $75-100K haircut on a house is more pain that most can tolerate, and so default risk will likely increase as people are forced to walk away.

The same math applies to stuff like $70K pickup trucks, too, and trickles all the way down the market until you get to beaters which are purchased with cash.

If there is a bright spot in all of this, it's that mortgage service debt costs and consumer debt service costs as a percentage of household income are substantially lower than leading into Oct 2008, so I may be exaggerating the impact of rising interest costs on household finances.

If the Fed tightens and the economy contracts in the first half of next year at the same time that all the backordered and backlogged goods find their way to the market, it's easy to see that wages continue to stagnate, prices drop, and thus inflation cannot persist. I won't park 100% of my money on that bet, but it's not 0% either.

 

[E. Bryant]

Just like in 2007, I believe gasoline will be the nail in the coffin. The market started to croak when gas was over $3 per gallon a little while back. Once we hit $4 per gallon here on the east coast is when the implosion will happen.

I'm unsure what the magic number will be this time around. I certainly recall that $4/gal gas in mid 2008 drove several names into the coffin, but the fuel economy of trucks is somewhat better now and I'm thinking that perhaps the household finances of those buyers might be stronger as well (this latter point being one of those claims that may get rubbed in my face in about six months). So there's a point where demand will collapse, but I don't know the magic number.

What I also recall was the violent swing from big trucks and SUVs to compact cars. Remember when Ford took a federal loan to convert plants like Michigan Truck to build the Focus, and part of the Fiat-Chrysler deal was the domestic production of 40 MPG small cars? I don't know that we'd see a shift of similar magnitude this time around, but the Big 3 depend far more on the sales of high-end trucks and SUVs than they did in 2008 (that's saying something), and they have virtually no offerings that would be broadly attractive (read: economical and affordable) in a market suffering from high fuel prices and a broad economic recession.

If anyone is buying the bullshit I'm selling with this narrative, then it might be wise to invest in an automaker that has a broad portfolio of affordable, efficient vehicles. Smells a lot like Toyota or Honda to me.

 

[lariat]

What's awesome is that you don't even need an ARM to get in trouble - just a simple drop in home prices might get the dominoes falling.

The median US price is about $375,000, and the strongest thing supporting that valuation are low rates. At 3.75%, that's a $1700/month payment. Crank mortgage rates up to 8%, and the same monthly payment only buys a $235,000 home. So what happens? Either everyone finds a magical way to throw another $1000 net monthly income at their payments, or home prices will drop. Now maybe they don't quite drop the full amount that my math suggests, but taking a $75-100K haircut on a house is more pain that most can tolerate, and so default risk will likely increase as people are forced to walk away.

The same math applies to stuff like $70K pickup trucks, too, and trickles all the way down the market until you get to beaters which are purchased with cash.

If there is a bright spot in all of this, it's that mortgage service debt costs and consumer debt service costs as a percentage of household income are substantially lower than leading into Oct 2008, so I may be exaggerating the impact of rising interest costs on household finances.

If the Fed tightens and the economy contracts in the first half of next year at the same time that all the backordered and backlogged goods find their way to the market, it's easy to see that wages continue to stagnate, prices drop, and thus inflation cannot persist. I won't park 100% of my money on that bet, but it's not 0% either.

Spot on. The only other wild card is credit card debt. That’s going to seriously screw with budgets.

 

[Hobo Hilton]

I think these guys (Below) are applying "wishful thinking" as they read their tea leaves.... Regardless, if the USD is stronger or weaker in 2022, it's going to be a bumpy ride.

Dollar’s Best Days Look Numbered as Funds Rush to Front-Run Fed

(Bloomberg) -- Investors are primed for the dollar to climb next year. But the juiciest trades may be over even before 2021 ends. Most Read from BloombergApple Aims to Prevent Defections to Meta With Rare $180,000 Bonuses for Top TalentCoronavirus Can Persist for Months After Traversing BodyThe...

ca.finance.yahoo.com

 

[E. Bryant]

I don't know that the participants in this thread need to read this article, but the general public and our overlords in Washington would benefit from the history lesson:

The Fed’s Doomsday Prophet Has a Dire Warning About Where We’re Headed

Thomas Hoenig knew what quantitative easing and record-low interest rates would bring.

www.politico.com

 

[Hobo Hilton]

I don't know that the participants in this thread need to read this article, but the general public and our overlords in Washington would benefit from the history lesson:

The Fed’s Doomsday Prophet Has a Dire Warning About Where We’re Headed

Thomas Hoenig knew what quantitative easing and record-low interest rates would bring.

www.politico.com

Excellent article..... It is a very clear "Road Map" to where we are heading in 2022............. Similar to flipping the pages in an old AAA Trip Ticket book..... The Average, hard working American is, once again, along for the ride.

 

[6Shooter]

Here We Go, Kraft Heinz Tells Grocery Retailers Price Increases Beginning 2022 Will Be Up to 20 Percent - The Last Refuge

Hopefully everyone has done their preparatory diligence and are well situated to assist their family, because prices on fast turn consumable goods (groceries) are now less than 30 days from entering exponential increase phase. CTH has been counting down the days to impact as the contract terms...

theconservativetreehouse.com

 

[lariat]

Here We Go, Kraft Heinz Tells Grocery Retailers Price Increases Beginning 2022 Will Be Up to 20 Percent - The Last Refuge

Hopefully everyone has done their preparatory diligence and are well situated to assist their family, because prices on fast turn consumable goods (groceries) are now less than 30 days from entering exponential increase phase. CTH has been counting down the days to impact as the contract terms...

theconservativetreehouse.com

I received notification this last week from one of my suppliers that one of my raw components will be going up Jan 1 by 15%. It has already gone up over 15% this last year. Another quoted me for raw metal at 20% higher from last month - they had no more inventory and had to buy from a competitor. Next available inventory will be mid 1q22, and the price would be increased on that as well.

I have been in conversation with some other shops who have extended production contracts and they are getting killed because there is no provision in the contracts for raw materials increases.

And during a meeting this week it was relayed to me by my insurance agent that more companies are buying supply chain insurance. It’s expensive but it’s how they are hedging against the potential revenue impact of supply chain disruptions. It’s expensive because the probability of it being executed is that high.

What we are seeing in the production of goods is coming to the household market. Shortages plus high prices will happen in 2022. You can’t expect everyone in the supply chain to absorb the additional costs forever without passing it on.

There really isn’t anything to be done as it’s already working it’s way through the economy. My best guess is that all of these "help wanted" signs we see are about to go away and the unemployment rate is going to go much higher. Sales volume is about to hit the floor on everything that isn’t a necessity. That doesn't mean it is going away, but luxury type items are going to take a serious hit as more money is allocated to the increased food/clothing/housing budget requirements.

 

[DarnYankeeUSMC]

In the HVAC business I was told to expect a 10 to 15% increase in anything metal sometime early January.
I asked how long quotes for equipment were good for and was told probably until the price goes up. So I have included the an increase in materials clause in my bids/estimates.

 

[Hobo Hilton]

America can not simply buy everything it consumes from foreign countries.... At some point we must produce more than propaganda.
____________

(Reuters) - The U.S. trade deficit in goods mushroomed to a record in November as imports surged and exports slipped.

The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said on Wednesday. That exceeds the previous record deficit set in September of $97 billion.

Goods exports declined 2.1%, while imports rose by 4.7%.

 

[Hobo Hilton]

I've been wondering if we're in for another Volker Shock.

The Coming Financial Vise No One Will Talk About › American Greatness

Every day, Americans are experiencing rapid inflation. And if their guts tell them it is much higher than the official 7.1 percent of the Consumer Price Index, their guts are right.

amgreatness.com

 

[nikonNUT]

In the HVAC business I was told to expect a 10 to 15% increase in anything metal sometime early January.
I asked how long quotes for equipment were good for and was told probably until the price goes up. So I have included the an increase in materials clause in my bids/estimates.

Most of my steel suppliers quotes are good “until end of business day”. If my customer drags ass the quotation process starts all over. And if, god forbid, a mill goes on strike or the such things are going to get really dicey.

 

[Hobo Hilton]

Inventories of New Houses for Sale Highest since 2008, Worst Spike in Construction Costs in at Least 50 Years: What the Heck Is Going On? | Wolf Street

 

[Hobo Hilton]

I'd like to hear from you guy's who process your own game on this one.
"New Rules and $1 Billion"....... Appears that Biden's plan is nothing more than "hope".... Similar to the PPP money.
I'll be ordering a few de-boning knives.
_____________________________

Jan 3 (Reuters) - The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday.

The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.


“Capitalism without competition isn’t capitalism. It’s exploitation," Biden said. "That’s what we’re seeing in meat and poultry industries now.”

Biden unveils plan to boost competition in U.S. meat industry

The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday.

www.reuters.com

 

[quietmike]

Over 2/3 of the entire federal budget goes to entitlement spending, all created by democrats, because they're terrified of running their lives w/o the government sugar teat.

 

[Bigfatcock]

It’s going to be a serious shit sandwich when the music stops.

I’ve been buying chairs like a motherfucker.

 

[Mr.BR]

Much of the Inflation is just price gauging because they can .


''Just before the pandemic, in 2019, American non-financial corporations made about a trillion dollars a year in profit, give or take. This amount had remained constant since 2012. Today, these same firms are making about $1.73 trillion a year. That means that for every American man, woman and child in the U.S., corporate America used to make about $3,081, and today corporate America makes about $5,207. That’s an increase of $2,126 per person.''

https://mattstoller.substack.com/p/corporate-profits-drive-60-of-inflation

 

[Hobo Hilton]

Much of the Inflation is just price gauging because they can .


''Just before the pandemic, in 2019, American non-financial corporations made about a trillion dollars a year in profit, give or take. This amount had remained constant since 2012. Today, these same firms are making about $1.73 trillion a year. That means that for every American man, woman and child in the U.S., corporate America used to make about $3,081, and today corporate America makes about $5,207. That’s an increase of $2,126 per person.''

https://mattstoller.substack.com/p/corporate-profits-drive-60-of-inflation

That means that for every American man, woman and child in the U.S., corporate America used to make about $3,081, and today corporate America makes about $5,207. That’s an increase of $2,126 per person.''

The $2,126 came from the Government bailouts during the pandemic. No, I did not fact check.

 

[lariat]

I'd like to hear from you guy's who process your own game on this one.
"New Rules and $1 Billion"....... Appears that Biden's plan is nothing more than "hope".... Similar to the PPP money.
I'll be ordering a few de-boning knives.
_____________________________

Jan 3 (Reuters) - The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday.

The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.


“Capitalism without competition isn’t capitalism. It’s exploitation," Biden said. "That’s what we’re seeing in meat and poultry industries now.”

Biden unveils plan to boost competition in U.S. meat industry

The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday.

www.reuters.com

The need to bust up the meat packers if they want competition. They have done this before to keep the oligopoly from gouging everyone - supplier and customer.

 

[devildog93]

The need to bust up the meat packers if they want competition. They have done this before to keep the oligopoly from gouging everyone - supplier and customer.

Something tells me Biden isn't going to be busting anything up.

 

[Mr.BR]

That means that for every American man, woman and child in the U.S., corporate America used to make about $3,081, and today corporate America makes about $5,207. That’s an increase of $2,126 per person.''

The $2,126 came from the Government bailouts during the pandemic. No, I did not fact check.

2000$ stimmy check per adult could in the best case possibly translate into 2000$ higher turnover but not even remotely close to 2000+$ more profit per capita, but as stimy checks were mainly bridging the slump due to lockdowns that would be wishful thinking.


Anti trust in US is dead, no one is going to bust anything, neither Democrats nor Republicans they all serve the oligopolies first and foremost.

 

[Bigfatcock]

Can the White House actually do anything about high meat prices?

The Biden administration proposed steps to help create more competition in the highly concentrated meatpacking industry and bring down high prices, but it's not clear the solutions will be that meaningful.

qz.com

If only there was something we could do about monopolies and price fixing…

 

[Hobo Hilton]

Kudlow: Biden's $2T spending bill last winter caused inflation

Kudlow: Biden's $2 trillion boondoggle spending bill last winter caused inflation 'Uncle Joe, your big government socialism plan to spend, tax and regulate the entire economy is losing... #recordshow #administrations #minoritygroups #tylergoodspeed #kevinhassett #bottom10 #spendingbill...

biztoc.com

 

[Bigfatcock]

New home construction down 14% in November 2021 compared to November 2020.

Hmmm. No shit. Materials are high as fuck.

 

[Hobo Hilton]

New home construction down 14% in November 2021 compared to November 2020.

Hmmm. No shit. Materials are high as fuck.

America has been down this road before. Anyone remember the RTC ? I had a friend working for the RTC. He would "bundle" 100 residential properties that were foreclosed on and sell the bundle to the "Banks too big to fail". A lovely time in financial history.
_____________

The Resolution Trust Corporation (RTC) was a U.S. government-owned asset management company run by Lewis William Seidman and charged with liquidating assets, primarily real estate-related assets such as mortgage loans, that had been assets of savings and loan associations (S&Ls) declared insolvent by the Office of Thrift Supervision (OTS) as a consequence of the savings and loan crisis of the 1980s.[1] It also took over the insurance functions of the former Federal Home Loan Bank Board (FHLBB).

Between 1989 and mid-1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts with total assets of $394 billion.[2] Its funding was provided by the Resolution Funding Corporation (REFCORP) which still exists to support the debt obligations it created for these functions

What Was the Savings and Loan (S&L) Crisis?​

• The savings and loan crisis was the build-up and extended deflation of a real-estate lending bubble in the United States from the early 1980s to the early 1990s.
• The S&L crisis culminated in the collapse of hundreds of savings & loan institutions and the insolvency of the Federal Savings and Loan Insurance Corporation, which cost taxpayers many billions of dollars and contributed to the recession of 1990–91.
• The roots of the S&L crisis lay in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees.
• Some S&Ls led to outright fraud among insiders and some of these S&Ls knew of—and allowed—such fraudulent transactions to happen.
• As a result of the S&L crisis, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), which amounted to a vast revamp of S&L industry regulations.

 

[E. Bryant]

OK, so let's play this out. The hypothesis is that there is a lot of bad debt hiding in the system. Bad debt will eventually suffer from default, and the majority of those loans are non-recourse. Is that process of debt destruction inflationary, or deflationary?

Just something to keep in mind as one attempts to predict the future. I don't think this will be the sole driver of inflationary trends, but it can't be ignored, either.