(image above represents shrinkflation — an additional burden to consumers)
Italy’s Industry Minister Adolfo Urso called for an emergency meeting to discuss the sharp uptick in food prices. Pasta alone is up nearly 20%, and this is a major problem in a country where 60% of residents report eating this item daily. Some provinces are seeing a 58% increase in this staple item. Siena, Tuscany, reported pasta rising from $1.50 a kilo to $2.37 a kilo within in a year. The European Central Bank stated that inflation reached 8.1% in March, so what is driving these food prices?
Some may point to wheat, the main ingredient, as the recent usurping of farmland and the Ukraine war had an impact on prices. However, wheat prices have actually declined in recent months. Durum wheat is down 30% since May of last year. The only other ingredient required to make pasta is water.
Coldiretti, Italy’s biggest farmers association, said that farmers are not seeing an uptick in revenue and are struggling to make ends meet. “There is no justification for the increases other than pure speculation on the part of the large food groups who also want to supplement their budgets with extra profits,” Assoutenti president Furio Truzzi told the Washington Post. Yet, food manufacturers are claiming that this spike in pasta costs in temporary and a result of pasta produced during the beginning of the Ukraine war and energy crisis.
This is not the first time that Italy has seen a rise in food prices. Italian authorities raised 26 pasta manufacturers in 2009 and fined the industry 12.5 million euros for creating what Reuters described as a “pasta cartel.”Around 90% of pasta makers in the country were in on the price gouging scheme that operated from May 2006 until May 2008, during which pasta prices rose 51.8% for retailers and 26% for consumers. Barilla, the largest pasta producer at the time, received the largest fine of 5.7 million euros.
Food inflation is a major problem across the world. In Italy, overall food prices rose 12.6% in April 2023, marking a slight decline from March’s 13.2% reading. This is unsustainably high. The overall inflation numbers put forth by government agencies are always the best-case scenario as they do not want us to see the true damage of inflation.
All we hear is the same claims that the dollar is dead and it will be totally worthless any day now. Over the last few weeks, all we hear from the majority now is that the dollar is finished. Virtually every page you turn or site you visit claims the death of the dollar. They are calling this the de-dollarization of the world economy and that the future of the US dollar as well as the American empire itself is now collapsing. The general claim is that the group of economically-aligned nations known collectively as BRICS is a major threat to the greenback. That was the same story we heard about the Euro back in 1997.
As their scenario goes, the BRICS [Brazil, Russia, India, China, and South Africa] have moved to form an anti-dollar colation and Saudi Arabia is considering jumping on board. They insist that once that happens, the “petrodollar” will die and cease to be a reserve currency.
This is then followed by the forecast that the economy will suffer and that any bounce in exports will be short-lived simply because the dollar will be dead for the long term. Of course, this has been the favorite forecast that they keep putting out since Bretton Woods collapsed. They were wrong back then for the dollar rose between 1972 and 1976 against the British pound, with the collapse of Bretton Woods. To try to explain why the dollar did not collapse, that is when they claimed that the dollar was backed now by oil rather than gold. That was just an excuse as always to cover up their wrong forecast.
They sold that story to Newsweek and now the dollar rally was because of oil which replace gold. Suddenly the dollar became de facto backed by oil. They needed an explanation to explain why all the old theories were wrong. They sold this theory and it made the front cover of Newsweek. Everyone said YES! That must be the reason. OPEC priced oil in dollars! Naturally, everything was priced in dollars because, under the fixed exchange rate of Bretton Woods, everything from wheat and corn to copper and gold was all priced in dollars.
Now they are saying the American empire is threatened by the potential commercial real estate collapse and the BRICS anti-dollar venture. So they are forecasting a great depression-style crash is possible in the not-too-distant future. They spin this to forecast the end of the America Empire. The London FT, always anti-American/Pro WEF, reports that the dollar as a reserve currency has declined from 73% in 2001 to around 55% by 2021. Yet the FT did state an obvious fact:
“But if you are a reserve-rich central bank elsewhere that isn’t going to be a lot of comfort. Moreover, would you really feel more comfortable in, say, the renminbi? Even if it was fully convertible and liquid, would you honestly feel more sure that Beijing will behave lawfully than DC? The dollar still looks like the proverbial least dirty shirt in the closet.”
COVID actually has played a major role in shifting the world economy. In 2020, the US economy was 24.75% of the world’s GDP. By the start of 2022, it had fallen marginally to 24.15%. What these dollar-forecasting jockeys do not understand, is that if they were correct and the dollar collapsed, then the very BRICS would collapse even further. Economically speaking, when the United States gets a head cold, the rest of the world catches ammonia. You can’t have it both ways. The strength of the dollar is not gold or oil, it is the American consumer.
The risk to the entire world is runaway inflation thanks to Biden pouring untold amounts of money into the black hole known as Ukraine. The Neocons, who control Biden, are planning to launch a war against Russia and China before 2024. This will only continue to accelerate inflation. That reduces the spending power of the American consumer and in the process, the US economic growth declines in real terms and with it, the rest of the world plunges into recession.
While Macron has figured it out that the Neocons are in charge of US foreign policy and he is telling Europe to stop being the puppet of the USA, that all sounds nice but Europe is marching into war with Russia. NATO is firmly in control of the American Neocons and they need war or face losing power. With Trump in the lead, they must stop him at all costs for he is anti-war, would haul the Neocons out by the necks, and defund NATO, as well as stop the climate change agenda.
The US dollar in the global economy has been supported by the size and strength of the US consumer-based economy. Its stability and openness to trade and capital flows without restrictions and it has never been canceled, are the major foundation of the dollar in addition to strong property rights and the rule of law. That is why Russians and Chinese buy US property for they are secure in their ownership of US property which cannot always be guaranteed outside the US.
Consequently, the depth and liquidity of US financial markets remain unmatched. For institutions parking billions, the United States represents a large supply of extremely safe dollar-denominated assets. Are they really going to switch to China or buy debt from Brazil? Not a single institutional client will take that bait.
China has been divesting of dollar reserves because it KNOWS that the American Neocons want war. You do not fund your adversary who intends to wage war against you. China cannot shift reserve assets to Europe or Japan. They have been buying gold because it is geopolitically neutral territory. They are NOT buying gold as an investor thinking it will rally. That is irrelevant. If gold drops 25%, that does not translate into them becoming a seller.
The dollar in international reserves stood at 60+% at the start of 2022 against the US share of GDP at 24.25%. This comparison belittles the argument that the dollar is finished. Eventually, the US will lose the wars it is starting and the dollar will be replaced perhaps as soon as 2028. The IMF is already licking its lips and rubbing its hands together eager to get control of the reserve currency. But they too will collapse. We have a Directional Change next year and a Panic Cycle in 2025. So buckle up.!
Remember one thing, even with the debasement and collapse of the Roman Denarius between 260AD and 268AD, it still took 224 years for Rome to completely collapse. When war breaks out, capital flight will still be to the dollar. It will not be to public assets, but private. The United States is still supporting the entire world economy. The BRICS need the US consumer to keep their economies functioning. All this talk of the dollar being finished is really nonsense. That day will come, but when the US consumer no longer buys.
Remember 1997? The Euro was going to dethrone the dollar. They claimed the new EU will be a bigger economy than the US. The problem was, they lacked a consumer economy, and low taxes, and they routinely canceled their currency to force people to pay taxes. It is always the same story over and over again.
The Biden Administration is responding to the panic phone calls that their Marxist philosophy will bring down the entire financial system. My ear is red as can be. I have had enough of the phone calls today to last the balance of the month. Trying just to do the right thing! Three banks have effectively gone down in the week of March 6th, which our computer was targeting. There have been Silicon Vally Bank, Signature Bank, and Silvergat Bank.
The Regulators perhaps saw the handwriting on the wall. This NO BAILOUT claiming that no taxpayer money will be used for a bailout of their hated rich, how about just using the taxpayer’s money you are throwing down the train in Ukraine? Depositors in Signature and SVB they are now saying would be made whole. If they do not cover ALL deposits, the monumental banking failure will be catastrophic.
Our forecast for a Banking Crisis is by NO MEANS confined to the United States. It will be far worse in Europe. We can see our computer not only targeted 2023 for a key turning point with a Directional Change but a Panic Cycle next year in bank stocks, but interest rates will be rising higher as also the risk of banks and governments escalated especially when they insist on waging war against Russia.
The yield curve is critical and we must understand that this insane war against Russia, even economically, will be a major financial disaster not much different from Vietnam which brought down Bretton Woods and forced Nixon to close the gold window on August 15th, 1971. It was that unrestrained spending directed by the Neocons. Then too, it was all about Russia they assumed was behind Vietnam.
Once more, the reckless spending on war promoted by the Neocons is undermining the entire economy. They have lost every war they have promoted – Vietnam, Afghanistan, Iraq, proposed Syria, Libya regime change, and now Ukraine. These people are never held accountable for all the devastation and the lives lost.
War is the primary driver of inflation and the central banks will not even address it for they do not want to “criticize” the Neocons. They might wake up with their dog’s head in the bed as in the Godfather. The central banks will NOT be able to contain this inflation or ever reach their 2% target regardless if the economy turns down just as what happened during Vietnam.
This is a warning to all small banks. Understand the REAL trend or you will NOT survive. Major capital is fleeing the long-term and rising into the short-term because they see rates are rising and any long-term bond investment during a period of war is going to be a major losing trade. Do not get trapped by the yield curve and understand that this trend is in play into 2025.
This Banking Crisis has been caused by Governments who artificially kept interest rates too low since 2008 and in the process, this banking crisis is unfolding because too many banks are UNSOPHISTICATED in forecasting and have been listening to the talking heads on TV and the desperate hope that inflation will decline while ignoring Ukraine entirely. Get that wrong – and you will NOT survive.
I strongly urge small banks to take our business services for access to real forecasting that is not biased or tarnished by human opinion with the two most dangerous words in forecasting:
The Federal Reserve raised the benchmark by 25 bps, as expected. The Fed fully understands that the manipulation of the CPI is a necessary aspect both for containing government benefits and understating inflation also results in high tax revenues. The market loves hope, and as a result, they focused on the warning that we’ll be in restrictive territory for just a bit longer. Most still believe that there will be a slowdown in inflation just ahead.
The Fed’s cautionary commentary saying that the “disinflation process” has started triggered shares to jump ending up 1%. This shows how insane the analysis had become that they cheer a recession and think that lower interest rates are bullish for the stock market. Obviously, they just listen to the talking heads on TV and have never bothered to look at reality. When interest rates decline, so has the stock market. Interest rates rose for the entire Trump Rally, and they crashed during the Great Recession of 2007-2009. For the life of me, I just shake my head when the talking heads cheer lower rates and spread doom and gloom with higher rates.
Dave Rubin of “The Rubin Report” talks about Klaus Schwab’s World Economic Forum sending a creepy warning to Elon Musk about his running of Twitter; the arrest of Andrew Tate for human trafficking in Romania and his Twitter war with Greta Thunberg; and Bill Gates revealing his plan for how ESG scores will be used to control corporations all over the world in the name of fighting climate change and ending the use of fossil fuels. Dave also does a special “ask me anything” question-and-answer session on a wide-ranging host of topics, answering questions from the Rubin Report Locals community.
Our Independent Inflation model has calculated that the combined rate for everything from food to transportation came in at 32% for 2022. That is a far cry from the official number. This is simply calculated by Socrates from an unbiased perspective. Thank you, COVID & the Russian Sanctions. What a new wonderful world the Biden Administration has created.
Gamazda Piano Published originally on Rumble on December 4, 2022
The Sound of Silence is what we will have at the end of World War III as we will all be gone if we can’t find a way to stop the Great Reset and the Build Back Better insanity of Klaus Schwab
There is an onslaught of misinformation about the Federal Reserve from everything that it can go bankrupt, and the Treasury will become a second central bank, and of course, the Fed is really the cause of inflation and its balance sheet. The proposal by Janey Yellen to buy in long-term debt and swap it with short-term is not “creating” money for the Treasury has no such power. It was a proposal for a debt swap to shorten the yield curve. The first proposition that the Fed can go bankrupt only suggests that people do not comprehend that the Fed is different entirely from the European Central Bank.
The Fed has the authority to create elastic money for it followed the very idea of J.P. Morgan and how he saved the economy during the Panic of 1907. The Fed can create money when there is a shortage due to economic contractions, and it can then reduce its balance sheet reducing the money supply. When the Fed was created, it was established with branches around the country because the Panic of 1907 exposed that there were regional capital flow problems. The 1906 San Francisco Earthquake drained the cash from the East where all the insurance companies were.
As we can see from this clip of rates in 1927, each branch was independent. There was an excess case in Kansas City so they lowered the interest rates there in hopes that capital would migrate to the other districts to earn more interest. All of that was eliminated by Franklin D. Roosevelt who wanted (1) to stack the Supreme Court to approve his Marxist agenda, which failed, and then he usurped all the power of the Federal Reserve and created the Washington headquarters and the President then was to appoint the head of the Federal Reserve and to illegally lobby him to ensure that his presidential agenda was to be the policy at the Federal Reserve. There was no more independence of the branches.
When Biden was running in 2020, he actually proposed requiring the Federal Reserve to regularly report on what they are doing to close economic gaps that exist along racial lines in the United States. Biden has viewed the Fed as a social tool and he has been making efforts to manipulate the Federal Reserve which will be extremely dangerous if they are carried out. Now, the Biden Administration is talking about closing branches of the Federal Reserve and replacing those board members with his hand-picked political cronies. In January 2022, he was pushing for black economists to be appointed to the Federal Reserve Board. My concern is that academics have ZERO experience and do not really understand the global economy trapped by domestic Keynesian Economics.
It was Paul Volcker who Chaired the Fed into the high in the interest rates back in 1981 who concluded in his Rediscovery of the Business Cycle that “it was not until the events of 1974 and 1975, when a recession sprung on an unsuspecting world with an intensity unmatched in the post-World War II period, that the lessons of the ‘New Economics’ were seriously challenged.” However, former Fed Chair Ben Bernanke has suggested that the Fed’s failure to contain inflation during the 1970s traced back to the political forces that shaped the Fed chairs in charge that he expressed in his book “21st Century Monetary Policy.” He wrote that the inflation of the ’70s puzzled economists relying on the 1958-ventage Phillips Curve, which would have predicted high inflation only in combination with extremely low unemployment rates. Bernanke admitted that the Phillips curve had “broken down” during the 1970s.
The critical problem with the entire way we view inflation rests on the QTM (Quantity Theory of Money) and the assumption that a mere increase in supply must produce inflation. There is absolutely nothing in the economic data that supports these old theories that were based upon (1) fixed exchange rates, and (2) the supply & demand theory dates back to the days of coinage. It was John Law who came up with the supply/demand theory that everyone else plagiarized, including Adam Smith. John Law’s writings influenced many, although they would never admit it. He was clearly the FIRST to use the term DEMAND and he was certainly the FIRST to join it with the word SUPPLY, for only a trader could have seen this connection in the price movements of anything.
The greatest fallacy of Keynesian Economics, Supply v Demand, and the Phillips Curve is that they have ALL failed because the US dollar is the reserve currency of the world and by default, the Federal Reserve has become the central bank of the world. With Biden desperate to get his hands around the neck of the Federal Reserve and force it to yield to his political agenda, threatens more than merely the US economy – but the entire world. Bernanke acknowledges in his book:
“Martin, my boys are dying in Vietnam, and you won’t print the money I need,” President Lyndon B. Johnson reportedly told then-Fed Chair William McChesney Martin Jr. at his Texas ranch after the central bank announced a half-point increase to its key discount rate over inflation fears, Bernanke writes. White House tapes, meanwhile, reveal President Richard Nixon frequently appealing to Fed Chair Arthur Burns’ Republican-party ties to clear the runway for more easy-money policies, with one call going as far as urging the Fed chair not to make any policy decisions that could “hurt us” in the November 1972 election.
I warned the Fed back then that buying in 30-year bonds during the 2007-2009 Financial Crisis, would NOT stimulate the domestic economy for one simple reason and this is why both the goldbugs and central bankers have been wrong. The domestic money supply DID NOT increase to stimulate when China was saying thank you very much and swapping their 30-year holdings for 10-year or less. The assumption that any central bank can control the domestic economy is absurd. The holdings of debt are global. Therefore, buying in 30-year bonds to reduce the supply in hopes of reducing the mortgage rates failed because the money did not stay in the USA. That is why the Fed then began to buy the mortgaged-backed securities because that was a more direct impact domestically.
As the money supply increased and the national debt rose consistently, gold declined from 1980 into 1999 for 19 years. All the theories of inflation driving gold higher were simply wrong just as the central bankers relied on the very same theories.
It was World War I and II that drove the gold to flee to the United States so by 1950, there was no choice but to make the dollar the reserve currency. Yet more significant was the realization that the factor which produced that result was ENTIRELY external to the domestic economy. Therefore, all the economic theories were bogus because they were all focused on domestic policy thanks to Karl Marx whose central theory was the government possessed the power to eliminate the business cycle by confiscating all private assets. That altered human nature and created economic stagnation. Nevertheless, Keynes and everyone else have sought to accomplish the very same authority that Marx maintained existed.
This focus on GDP (Gross Domestic Product) has reversed the GNP (Gross National Product), which was more global in its scope. If we attributed world trade to the flag the company flies rather than where it sets up a plant, then you would see that the United States has a trade surplus and not a trade deficit. This is also a backdrop to the reserve status of the dollar. Perhaps the greatest of all the wild proposals is that somehow Bitcoin will rise from the ashes and become the new Reserve Currency of the world. So all governments will issue debt in Bitcoin? Politicians will never be able to run for office and Socialism must collapse.
Rather than betting on the power grid to survive if governments collapse, I think we will see the pre-1965 silver coins return for a medium of exchange and gold for larger transactions. I have said plenty of times, GOLD will NOT rise as a hedge against inflation, it is a hedge against the collapse in confidence of the government.
As I have written before, when the Japanese government lost the confidence of the people, they lost the ability to produce any money for 600 years. The people used the coins of China and bags of rice – no Japanese coins were ever acceptable for 600 years which was the same time interval it took to reestablish gold in Europe following the fall of the Roman Empire.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
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