Category Fascism

Dec 11 2021

Clueless Joe Says Federal Spending Doesn’t Increase Inflation, Reality Begs to Differ


Posted originally on the conservative tree house on December 10, 2021 | Sundance | 164 Comments

At the most troubling level, Joe Biden believes what people tell him to say for the reason they tell him to say it.  This reality underscores the reason why Barack Obama’s network selected Biden as their disposable front man in 2020.  Biden sounds convinced, because Biden is convinced.  He’s wrong, factually and fundamentally wrong, but he believes what he repeats in public.

The most painfully obvious examples of this dynamic are present when Joe Biden explains economic things based on what other people have told him.  The guy really is the modern personification of the naked emperor parading around to show off an invisible coat that he genuinely believes he’s wearing. The self-deception would be embarrassing except for the fact he is only deceiving himself; so people laugh…. but this is dangerous.

Questioned today about inflation, Joe Biden starts talking about his Build Back Better program.  It really is worth watching to see how oddly emphatic he is in the belief that if government pays for a thing (childcare, healthcare, prescriptions) the cost of that thing somehow mysteriously disappears.

Biden believes that if government subsidizes something there is no longer a cost associated with it.  He believes this.

Setting aside the historic fact/truth that anything government pays or subsidizes ultimately costs more, the real cognitive dissonance in Biden’s worldview is that any cost associate with a ‘thing‘ disappears if the government pays for that ‘thing’.   From that bizarre viewpoint, the disappearance of public expense for that government subsidized thing then creates “deflation”, or a lowering in overall prices.

This claim is abject nonsense.  Truly and genuinely batshit crazy nonsense.

Example.  According to Joe Biden’s talking point: if government pays for college education, the price of a college student’s car drops.  It doesn’t.  To make that claim is absurd in the extreme.   The college student may have more money to pay for a car if they are not paying for tuition, but the car itself doesn’t change in price.

A person may have more money to pay for groceries if they are not paying for childcare expenses, but the price of the groceries doesn’t change.   The inflation on the prices of products at the grocery store does not change just because some families no longer have daycare expenses.   But Joe Biden believes it does.  

Regarding the price of something once government starts subsidizing that something, consider this:

Notice the correlation between the affordability of something once the government starts subsidizing it?

Perhaps the worst part of Joe Biden’s policy implementation is his actual belief in it.

This is what happens when your entire life is centered in a bubble or echo-chamber of academics, politicians and think-tanks that have no connection whatsoever to Main Street and common sense.  This is also why lobbyists are effective.  Lobbyists can bullshit the gullible politicians into believing just about anything, because the people who are at the highest level of politics are genuinely clueless about Main Street.

We are so screwed….

….please prepare your affairs accordingly.

Dec 11 2021

He Did It – White House Celebrates Joe Biden Reaching Inflation Milestone Set By Jimmy Carter, 6.8 Percent and Rising


Posted originally on the conservative tree house on December 10, 2021 | Sundance | 187 Comments

Joe Biden may be celebrating his historic achievement in reaching an inflationary milestone previously set by Jimmy Carter, but the working class is paying the price for their economic stupidity.

The Bureau of Labor Statistics releases the November inflation rate today [DATA HERE] showing another rise in the annualized rate of inflation of 6.8 percent.  As you review the data, ask yourself this question: ‘Is there anything in the current economic landscape to indicate this is going to stop?’  The honest answer is no.  Here’s why…

As the BLS accurately (albeit briefly) notes, their inflation data reflects the cumulative increases in costs of products and services at all stages in the supply chain.  Raw materials cost more (extraction, regulation impact), processing costs more (energy impact), transport costs more (fuel impact), final goods assembly costs more and handling costs more.  From field-to-fork or mining-to-showcase, the total cost to create stuff costs more. [AP Interactive Chart]

Yes, the inflation data is backward looking. Meaning, it is looking back toward the previous period to compare costs.  However, despite the White House protestations to the contrary, that’s not a good thing, because it is going to get worse.

The contracted price for goods delivered (depending on sector) are net terms in 30, 60 or 90 days.  Meaning, the purchase price on final goods wholesalers are receiving now, were agreed upon months ago.  Those terms for current arriving goods are no longer valid.  The new terms (purchase orders) carry higher costs, and as an outcome higher prices to consumers are still coming.

The AP chart above shows the ascending spike in inflation overall.   Do you see that little plateau (mid spike)?  That’s June and July of this year, when we noticed the economy overall appeared to have stalled out.  As we highlighted yesterday {Go Deep}, that brief plateau corresponds with a gear change internally in the macro economy as productivity dropped by 5% very quickly in the third quarter.

Immediately following that two month plateau around 5%, the next few months of data showed that American consumers, writ large, were reacting to inflation by changing their spending habits.  That’s when future contracts for new housing starts stalled out.  In the next few months, up to today, all the data indicates working class U.S. consumers are hunkering down with less disposable income and prioritizing spending on essentials: housing, rent, gasoline, food.  All else is less than.

In the service sector, specifically hospitality and venue employment, overall demand for services slowed, but the employment data -showing the contraction- remained hidden, because we were climbing out of the COVID lockdown hole.   It appeared the service sector was gaining back jobs; but the backward to last year comparison was clouding an actual slowdown in services, because the data was comparing itself to 2020 when services were shut down.  Demand for services was down, but we couldn’t really see it.

All of this inflation is being driven by policy.  •[1] Energy policy (oil, gas leases nullified & pipelines cancelled) in combination with regulations targeting environmental impacts (CA ports emissions rules) is driving up energy costs. CORE inflation results from this. •[2] Fiscal policy by White House and legislature has been spending like drunken sailors, and that adds to a storm of •[3] monetary policy, with the Fed buying back the debt created by spending, and as a consequence devaluing the dollar currency.

The cost of exporting products is less, because China and the Euro benefit from lower U.S. dollar values.  However, more export of raw materials means higher prices domestically in what little remains of the supply/demand influence.  The multinationals are making out like bandits, Wall Street is happy, and the middle class of America is once again a victim of economic policy.

First, the DC politicians delivered the “rust belt” to us as an outcome of their favoring Wall Street over Main Street, and now they are wiping out our checking accounts with massive inflation.  Remember the oft repeated -and infuriating- catch phrase, “The U.S. is a service driven economy?“, said by both wings of the UniParty?   Well, put another way… first they off-shored our jobs, now they off-shore our wealth.   This is not an accidental outcome of flawed policy, they are doing this intentionally.

We are being gutted from the inside.

You don’t accidentally stop pipelines, cancel oil leases, shut down refining capacity, change port regulations and then act surprised by saying: ‘whoopsie’ gasoline seems to be costing more?  Duh! It’s a feature not a flaw.   Many of the people behind Joe Biden are stupid, but they ain’t *THAT* stupid.  They know what they are doing, but they have to pretend not to know things in order to avoid the tar and feathers.

Table-1 gives us a good snapshot of how the sector specific prices are rising [data here]:

If you want to go even deeper into the categories, check out Table-2 HERE.

Final points….  This is backward looking data, and there’s nothing visible right now to give any optimism that prices will not continue rising yet again in the next few months.  Exactly the opposite is true.  There is visible evidence that prices will go up again in December, January and February based on the current situation.

If the Build Back Better legislation is passed, the current rate of inflation will jump even higher after February.  If it doesn’t pass, we may plateau again in March and April of 2022 as we did in June/July of this year.  However, prices will never drop back, because the devalued dollar status is permanent.

What will change this scenario is an actual drop on the demand side as U.S. consumers see their income values wiped out.   Unfortunately, that appears to be part of the policy agenda for the White House.  If they can reduce demand by making things unaffordable, they can claim victory over inflation and proclaim their economic policies a success.  The downside of their achieving success is we have nothing left, we’re broke.

Dec 10 2021

Elon Musk Two Word Response to Congress About Biden’s Build Back Better Spending Bill: “Delete It”


Posted originally on the conservative tree house on December 9, 2021 | Sundance | 90 Comments

Tesla CEO Elon Musk was seemingly channeling his inner Galt during a video interview with Joanna Stern of the Wall Street Journal at the CEO Council Summit.  Apparently Mr. Musk can see what’s on the other side of this spending horizon and doesn’t want to experience it.  WATCH:

The Full Interview is below:

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Dec 10 2021

Foreboding – U.S. Productivity Declined 5.2 Percent in Third Quarter, Largest Quarterly Drop in 61 Years


Posted originally on the conservative tree house on December 9, 2021 | Sundance | 78 Comments

U.S. nonfarm productivity is a measure of economic activity within the engine of the U.S. economy.  The U.S. productivity rate is a measure of how much value is produced by the economy through demand for the products and services, and the labor associated with the creation of those products and services.

I have often used the example of making bread {Go Deep}.  If you are making 10 loaves of bread, there is a set amount of cost associated with each loaf created.  The total cost of each loaf is the total cost to produce the entire batch divided by ten. However, if you have customers demanding 15 loaves of bread, you make more profit on the last five because it doesn’t cost 50% more in material or labor to make 50% more loaves.

Your productivity in the last five loaves is higher because the fixed costs of production (raw materials, energy) barely change, and the labor is only slightly higher.  The opposite is also true.  It costs more per loaf to make fewer than ten loaves because the fixed costs and your labor are pretty consistent, yet the finished value of 7 loaves is less than the finished value of ten.

Anecdotally, it has looked for quite some time that around May of this year the economy peaked, plateaued for a few weeks, and then began a slow downward progression.  Today the Bureau of Labor statistics puts some revised data to that third quarter (July, August and Sept) economic activity {data here}.  The quantified results align with what we sensed was taking place.

The value of all products and services generated increased by 1.8 percent.  However, the labor cost of generating that small amount of added value increased by 7.4 percent.  The difference between those two numbers is a drop in productivity of 5.2% over the entire quarter.

This is the largest quarterly drop in productivity since 1960 !

The Biden administration will blame the drop in productivity on a lack of material to produce the end product (ie. the COVID excuse).  Which means employed people were sitting around waiting for goods to arrive and being less productive.   There is a small amount of that which might be true.  However, it is not the biggest factor, at least not on this scale.  Keep in mind we are talking about both goods and services.

The more likely cause of such a massive decline in productivity is a genuine decline in demand.  In the aggregate, consumers needed less goods and services.  This likelihood aligns with the diminished and softened retail sales figures recently noted.   It is a simple cause and effect.  When gasoline, energy, and essential products like food cost more, consumers have less money for other stuff.  Demand for the non-essential products drop.

As the demand drops, the productivity of the economic activity to generate those goods and services also drops.  However, the scale of the decline is the part to pay attention to.  A five percent drop in productivity is huge for a single quarter.  Under normal circumstances this means more slack in the labor market, and that is what we saw recently in the retail sector of the employment figures from November {data here}.

During the month when retailers are customarily ramping up their employment to cope with increases in consumer demand, last month that didn’t happen.   The ‘retail sector‘ lost 20,000 jobs in November.  Think about that.

At the time of the November jobs report, the “national economists” were trying to figure out why the employment report missed expectations by 300,000+ jobs.  We were not so surprised, because the actual result aligned with other data suggesting the Q3 economy overall was contracting.  Consumers are being squeezed by inflation, that is creating a stagnant economy or “stagflation.”

Wage growth is currently at 3.9% {data}, and when combined with the loss in productivity, the unit labor costs for businesses at a macro level means a total cost of +9.6 percent in the third quarter.   If employers do not start reducing their payroll costs as demand contracts, each unit produced will cost more money.  Unfortunately, that dynamic adds to inflation and we grease the skids on this downward spiral.

I have not seen any financial pundits concerned about where this cycle naturally ends.  Perhaps the media silence is because the White House knew the Q3 productivity data was alarming, and that stirred the administration to contact those pundits in advance in an effort to avoid widespread notice.

Regardless of reason for their avoidance, a drop in productivity of such a scale tells us to complete our economic preparations as soon as possible.  The intensity of the inflation storm worsens with a weak employment outlook.

Dec 10 2021

White House Says Joe Biden Will Veto Bill Blocking Vaccine Mandate if It Passes The House


Posted originally on the conservative tree house on December 9, 2021 | Sundance | 130 Comments

Two Democrats joined with Republicans yesterday in passing a bill that would eliminate any federal vaccine mandate.  It seems silly that Congress would have to pass a law saying the unlawful and unilateral act of the executive branch, which has been blocked by separate federal courts, is unlawful…. but that’s where we are.

Democrats Joe Manchin (West Va.) and Jon Tester (Montana) joined all the Republicans present in the 52-48 vote.  The bill now goes to the House, where it is going to be put on ice by Nancy Pelosi in order to save Joe Biden from an embarrassing rebuke of his overreach.  However, White House Press Secretary Jen Psaki was asked today if the House were to vote on the bill, would Joe Biden veto it.

The White House spokesperson affirmed that Joe Biden would veto any bill, created by the representatives of the people, that declared his authority null. WATCH:

Dec 10 2021

The FBI Can Access Your Personal Data in 15 Minutes


Armstrong Economics Blog/Police State Re-Posted Dec 10, 2021 by Martin Armstrong

(Click on image for higher resolution)

The Federal Bureau of Investigations (FBI) can legally access your “secure messaging app content,” according to a new report by The Epoch Times.  In fact, it would only take officers about 15 minutes to access the contents of iMessages to collect metadata from WhatsApp. Our phones and personal electronic devices can provide agents with our location, contacts, pictures, search history, and more. Numerous people believe that encryption is one-dimensional and their messages are secure.

There are different forms of encryption and ways to bypass poorly encrypted software. People believed iMessage was secure due to Apple’s encryption, but automatic cloud backups are not encrypted and can be accessed. WhatsApp only began offering encryption backup in September, and the feature is not the default setting. The FBI document noted that search warrants could provide them with backup encryption keys as well.

Signal, Telegram, and WeChat are a bit more secure, but the FBI can still determine data logs or when the user logged into the service. Some may shrug and say they have nothing to hide and, therefore, nothing to fear. The problem is that the government can and will twist any information provided to them in order to win or develop a court case. Also, the FBI is not a beacon of ethics, and no one wants to have their personal information publicized. Since the majority of the world is not a threat to national security or a predator, sharing this much information with the government without a subpoena is asinine. All it would take is 15 minutes for someone’s private life to become public government information.

Dec 10 2021

Rep. Chip Roy: If We Don’t Stop It, This Country Will Not Survive


Armstrong Economics Blog/Politics Re-Posted Dec 10, 2021 by Martin Armstrong

Watch Rep. Chip Roy (R-TX) destroy the House by questioning government spending and a complete lack of communication between parties. The Democrats pushed forward massive spending bills this year as the nation teetered on a recession and nearly defaulted on its debt. There are continuous plans to fund a growing number of social programs with zero solutions on how to fund them. “If we don’t stop it, this country will not survive,” Roy warned.

The issue is government-wide. “We never make a choice, ever — both parties, by the way,” Roy declared. Roy stated that he voted to take away powers from the president under the Trump Administration, despite being a Republican. Now, Roy noted, the current president has issued a federal vaccine mandate that no one voted on. He publicly admits that only a few people are making decisions for the masses. This means that a handful of people, acting in their own self-interests, are deciding the fate of millions. Democracy is in jeopardy.

Dec 10 2021

Zarah Sultana MP: Rules for Thee but Not for Me


Armstrong Economics Blog/Politics Re-Posted Dec 10, 2021 by Martin Armstrong

British Parliament Labour Party member Zarah Sultana has urged the public to wear masks. “I feel incredibly unsafe in the chamber… I see most Tories not wearing masks,” MP Sultana said in a November 3 interview with the BBC. Interviewer Julia Hartley-Brewer promptly questioned, “Why are you not wearing one now?”

Answer: the rules do not apply to her. Sultana recently attended the Music of Black Origin (MOBO) Awards where she was spotted in a packed room without a mask. A proponent of shutting down schools and forced mandates, Sultana said that a mask-free Chamber was a “dangerous message to send to the rest of the country.” Yet, she is seen partying at a crowded function without the “protective” restrictions she expects the rest of the nation to abide by. Do we need any more proof that these policies are purely political?

Dec 10 2021

Supply Chain Shortage Killing NY Cheesecake & NY Bagels


Armstrong Economics Blog/Inflation Re-Posted Dec 10, 2021 by Martin Armstrong

The only thing left standing that was good about NYC was Junior’s Cheesecake. I could order it for delivery these days without going to Mayor Bill de Blasio’s contest to see how much business in New York you can destroy in three years. His departing decree was that every business in New York must vaccinate its employees or they are to be fired. I have sworn off ever visiting New York City again along with Europe. Of course, that is their ultimate goal to prevent people from traveling to end our free society.

Now the world is coming to an end. There is a cream cheese shortage stemming from supply-chain issues that has been wiping out Junior’s famous NY Cheesecake, and there is nothing like it anywhere! It has also caused a collapse in the production of the also famous NY bagel which has stressed many a connoisseur.

Junior has reported that they have been struggling to get any supply of the main dairy product that makes their famous cheesecake. The company has been forced to pause cheesecake production at its New Jersey baking facility. I had ordered mine for Christmas and it took a few weeks to arrive. Now this shortage behind inflation is only going to get worse.

Biden’s agenda is only climate change being pushed by the AOC agenda and who cares about the present living conditions?  The sooner you just die and fade away, the better it will be for the planet. I really think they should show everyone how to do the honorable thing and do a public ceremony of Seppuku, sometimes referred to as Harakiri, which is the ritual form of Japanese suicide by disembowelment. This would be very helpful as an instructional HOW TO video to save the planet. If AOC wants to be a real leader, show us the way! Kind of an Instructional Guide for us, the Great Unwashed, who they do not even trust to vote because it’s just mindless populism.

Dec 10 2021

The Hoax of Biden’s Democracy Summit


Armstrong Economics Blog/Politics Re-Posted Dec 10, 2021 by Martin Armstrong

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The #1 Fake News Network in the world, CNN, has gone after China and Russia for calling Biden’s Summit of Democracy a joke. Of course, CNN apparently does not know how to pick up a dictionary. Here in the United States, we have a republic – not a democracy. And in Europe, the whole political structure is a fraud for the people neither vote for anyone on the European Commission nor they do not vote for the head of state.

I suppose they never actually listened to the words of the Pledge of Allegiance to the Flag:

“I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands,

one Nation under God, indivisible, with liberty and justice for all,”

It explicitly states that the US is NOT a Democracy but a Republic. It is a joke that politicians pretend that we live in a democracy when we do not and Klaus Schwab’s 2030 agenda included the end of the right to even vote. Moreover, the press is no longer free and it is pushing its own agenda.

They refuse to investigate anything to do with COVID or the conflicts of interest elevating Gates to a world health czar who is not even a doctor any more than Schwab or the head of the WHO. The press has fully embraced the canceled culture and thinks “freedom of the press” means they get to report only what supports their agenda.

Here are the definitions of Democracy and Republic which Europe does not fit either. If CNN was honest, they would actually have to agree with the criticism of both Russia and China for the West is a Republic, and would never allow a democracy for then the people would vote on all of these spending issues instead of our pretend representatives since we are a Republic – not a Democracy.

So sorry, Biden’s Summit of Democracy is indeed a joke. Nowhere in the West do the people live in a democracy. It is all a republic and Europe does not even qualify as a republic it is closer to China and Russia than the United States. Historically, republics always die by their own hand – economic suicide which is unfolding perfectly once again. At some point, there will be a new version of Caesar who will cross the Rubicon.