Posted originally on the conservative tree house on May 11, 2022 | Sundance

The next Democrat and Lincoln Project presidential candidate for ¹2024, Joe Manchin, questions Defense Intel Agency (DIA) Director Lt. Gen. Scott Berrier and Director of National Intelligence (DNI) Avril Haines about whether Ukraine can actually win the current war with Russia.  It’s an interesting exchange because none of the DeceptiCon senators will usually approach the issue.

Lt General Scott Berrier (DIA) says [00:56], “that is a difficult predication to make. I think where the [DIA assessment] is at is a prolonged stalemate should no factor change on either side. In other words, the Russians continue to do what they’re doing, and we continue to do what we are doing for the Ukranians.”  Read that emphasis carefully.

What Berrier is saying is affirming we are in a direct proxy war.  So long as the United States remains the essential fighting force behind the Ukrainian military, they can achieve a stalemate.  However, if the United States withdraws support, Russia will win.  DIA Berrier is saying directly the U.S. can only achieve a stalemate in Ukraine.  WATCH:

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Manchin was not being misogynistic in not asking Haines that question.  Remember, the ODNI is only supposed to be faced internally into the United States security and intelligence operations.  ODNI Avril Haines is a political operative from the Obama administration, specifically implanted into the Office of the Director of National Intelligence, because that specific element of the intelligence apparatus only looks inward into the U.S. citizenry for threats against government.

Please emphasize this point when needed.  The ODNI does not evaluate national security issues abroad. The Patriot Act created the ODNI to set up a threat radar that only looks internally.  We The People are the threat the office of the ODNI was created to evaluate.  Emphasize that as needed.

¹If the mid-term 2022 ends up being a wipe out for the leftist communists in the Biden administration, Joe Manchin will be their 2024 candidate.

Posted originally on the conservative tree house on May 11, 2022 | Sundance 

The Bureau of Labor Statistics (BLS) released the inflation data from April today [DATA HERE] showing 0.3% increased inflation in April and a continued 8.3% ‘sticky’ inflation year-over-year.

CTH is going to say something slightly unusual, this data is actually worse than expected.   The hidden canary in the mine is within this BLS sentence which shows in the statistics, “the index for gasoline fell 6.1 percent over the month, offsetting increases in the indexes for natural gas and electricity.”  Remember, these are backwards reflections of price captured in early/mid-April.

The actual price of gasoline dropped 1% in April during the timeframe captured.  Yes, there was an actual 18 days in April when gasoline prices moderated and slightly ticked down; however, those prices immediately jumped again late April through today.

Because the BLS puts a 5x weight on the importance of gas [Table A], the 1% temporary drop in gasoline led to 6.1% downward “seasonally adjusted” price pressure.

All of that said, and with the heavy weighting of the gasoline prices considered, the net inflation results barely moved from March (8.5%) to April (8.3%). I modified Table-A to take out the noise.  You can see the downward pressure from gasoline and simultaneously the upward price pressure from food, specifically food at home.

This outcome is a reflection of what we have been seeing in the supermarkets and grocery stores.

The Joe Biden $1.9 trillion COVID spending package that created $1,400 checks for all Americans, was passed in March 2021.  That massive infusion of cash took place in April of 2021.  We are just now cycling through the year-over-year comparisons when that artificial economic stimulus took place.

The 2021 demand side inflation took off immediately after that massive spending spree.  It was May, June and July of 2021 when the cash infusion and $1,400 checks drove demand side inflation.  Starting next month, we cycle through that period in year-over-year comparisons.

As we have noted for a few months and has been quantified in the drop of overall first quarter GDP, the demand inflation is over.  Most of the current inflation is being driven by producer price inflation, the cost to make and produce things.

The demand for goods and services is low (stagnant), but the prices to create goods and the costs of services remains high (inflation).  Put those two dynamics together and you have “stagflation,” our current economic status.

The production inflation is directly connected to the cost of energy.  Energy prices are embedded in every sector of the economy.  Higher electricity, heating/cooling and petroleum costs (packaging, materials, transportation, etc) are unavoidable and passed on to consumers.  Individuals and companies who provide services raise their prices to compensate for increases in their own costs.  It is a cumulative inflation snowball.

I modified Table 1 to take out the noise (see below).  You can see how production inflation continues to be the problem, even as the demand for the products and services declines.  You can also see the weighting factor for gasoline overall and how it skews the overall inflation data.

Year-over-year inflation will statistically begin to give the appearance of moderation, once the June (’21) to June (’22) comparison cycle arrives.  The Fed and White House will use the intentionally timed statistical outcome to claim inflation is diminishing.  It’s a political trick we expected.

The key to remember is that western government debt incurred during COVID-19 is the problem.  The debt incurred is unsustainable, and that debt burden can only be reduced by devaluing the currency.  Inflation is the devaluing of currency that makes the debt manageable.  Dollars that are worth less also make the dollar-based debt worth less.

From the position of the government inflation is good, it makes the debt burden less heavy.  Unfortunately, that same inflation makes our money worth less, and our wages are chewed up by higher prices. Wages are destroyed by the increased prices the prior spending created.

• Inflation on durable goods is now at/near the apex.  The durable goods price flatlines right now as all production costs are embedded in the cost of the product.  The prices of finished goods are now set; inflation has caught up to production; the prices of on-shelf and inbound deliveries are higher, but stable.  Production inflation is built in, prices will not drop.  However, depending on origination, transportation costs may still increase the end price of finished goods as they transfer to the consumer market.

Now, we enter the phase where consumer demand becomes the dominant factor in price.  Simultaneously, demand is contracting because the higher rate of inflation in highly consumable goods (energy, utility costs, housing, gasoline, food) is now a spending priority for consumers and eating a larger portion of wages.   As a result, the price of durable goods is now dependent on the ability of the consumer to pay for them.

Sellers of durable goods are going to be chasing a smaller customer base who can afford the higher prices.  Durable goods prices will remain static, and now durable goods prices will likely become part of the competitive equation.  The businesses within the durable goods sector are going to have to find customers in order to stay in business.  Incentives will show up this summer as businesses need customers.   If you are a wise, careful and smart shopper for durable goods you will find some modest deals.

• Inflation on consumable goods is not yet at the apex.  It’s likely close to production parity, but price pressures are still volatile in the upward direction. The price of gasoline and transportation overall will be a big factor in current prices of highly consumable goods.  We should see oil, gas and energy prices stabilize first.

Rents will likely increase for another three to six months, then stabilize (and, in my opinion start to fall).

Housing overall is far more challenging as mortgage rates are climbing.  Refinancing as a method to bridge the income gap between wages and expenses is a big problem now in this phase.  There is going to be a period of massive fluctuations and instability in the housing market depending on region and employment stability as the recession phase of the total economy is going to bite hard.

For most regions with mixed blend underlying economies (products and services) macro housing prices have peaked.  For ordinary housing purchases, not institutional investments, we should start to see price decreases again as the customer base for higher prices shrink.  Obviously, this is driven by inventory and regional specifics; however, I am talking in the aggregate within the macro housing situation.

Food prices still have some upward pressures through Memorial Day.  Then a period of stability will settle, before the third wave of food inflation hits later in the summer/fall of this year; that’s when the increases in farming costs will reach the fork.

Late summer and fall food prices will likely be 15 to 20 percent higher than current prices at the supermarket.  The fresh foods will be on the upper side of the future price wave, and the processed foods on the lower end; however, both will increase.

The last factors in the food price are far more challenging to predict….  Supply?   Any problems within the food production cycle that impacts supply will drive prices, beyond what we already expect.  If there are major shortages, the prices will go even higher.

This food environment is unfortunately the best time for Big Agriculture, the Wall Street multinationals, to make the most profit.  The Big Ag multinationals will exploit every possible angle within inventory, supply and harvest controls to maximize their profit equation.

There are a great deal of unknown global variables right now that could impact U.S. food prices later this year.  The only certainty is that prices will further increase.

Joe Biden sucks.