Lies, Lies & More Lies from the Financial Press


Armstrong Economics Blog/Press Re-Posted Oct 15, 2021 by Martin Armstrong

COMMENT: Marty; the Fed quietly published the banks it was funding in the Repo Crisis. I just wanted to say, you are always right. The press claimed it was tax time, but you said it was the crisis in European banks. Your sources are always spot on. Thanks for the light of truth.

PG

REPLY: Yes, that story that the liquidity crisis occurred because US corporations withdrew large amounts from the banks in order to make quarterly tax payments was the most absurd propaganda I ever heard. Why then do we not see the same liquidity crisis event during tax season?

The bulk of the loans covered foreign banks, as well as Goldman Sachs and JPMorgan Securities. It was all driven by the simple fact that Merkel said there would be no bailout for Deutsche Bank, which was the major derivatives counterparty problem involving Wall Street. Deutsche Bank had a major derivatives book, and if it failed, it would have taken down US banks. Deutsche Bank was in crisis and then it was too big to merge with Commerzbank. They had to lay off nearly 20,000 staff and a major effort was undertake to try to isolate its toxic assets.

That is why the Fed had to step in as the market maker to bail out Europe for US banks all backed off. I really do not know who makes up these stories to try to hide the truth. But they always do in hopes of preventing panics. This time, the game is up.

Inflation to Rise into 2034?


Armstrong Economics Blog/Economics Re-Posted Oct 14, 2021 by Martin Armstrong

Inflation continued to surge, reaching 5.4% in September. Janet Yellen has never been right about anything and keeps calling this “transitory,” as if it will vanish in a few weeks. The Labor Department’s Consumer Price Index, which is supposed to measure a basket of goods and services as well as energy and food costs, came in at 5.4% in September from a year earlier, well beyond expectations. However, our model was projecting a rise in inflation into 2021 which is 13 years up from the November 2008 low. It is interesting how the COVID restrictions with lockdowns came in on target with our computer’s forecast. Curious how events seem to fulfill the forecast when it is done by a computer rather than human judgment.

Nevertheless, as you can see from the chart, inflation has bounced on a month/month basis, but it has not yet reached the Downtrend Line. The long-term forecast beyond a mere decade projects the historical high will be due in 2034, which should exceed all previous highs. A month/month number above 1.05% will signal that inflation is breaking out, and we will indeed make all-time record highs going into 2034.

4.3 Million Quit Jobs in August – Vaccines?


Armstrong Economics Blog/Vaccine Re-Posted Oct 14, 2021 by Martin Armstrong

The numbers are out — 4.3 million people in the US quit their jobs in August. This is the largest number since 2000. The leading sector is hotels and restaurants. I have a friend who has a daughter who had two jobs. She worked as a waitress/bartender at night and at a health food store during the day. She was very industrious, to say the least, and quite impressive. However, she quit the health food job because they demanded a vaccine. She said the bar owner was going to impose a vaccine rule and more than 50% of the staff said they would quit.

Meanwhile, New York’s bars and restaurants are hurting for business because of the vaccine mandates. Our most honorable leaders, who are most likely taking money from Pfizer lobbyists worldwide, are realizing that resistance is not futile. You can mandate vaccines and pretend they are 100% safe, but the truth always surfaces. The people can bring down the entire system if they simply refuse to participate.

Many journalists are too busy selling Biden’s propaganda about the vaccines. The FDA admits there are risks, but they, in their sole discretion, announced they “believe” the benefits outweigh the risk without any explanation of the analysis or a single word of caution (e.g., if you have certain conditions, you should not take the vaccine) despite doing so for other vaccines. So while the press and the Biden Administration are ignoring the facts and the trend, this only raises the question: How much has Pfizer and Moderna paid you?

Jen Psaki Tells Stunning and Dangerous Lies About Transitory Inflation, Claims Price Increases Will Stop – They Won’t


Posted originally on the conservative tree house on October 13, 2021 | Sundance | 249 Comments

I do not expect White House Spokesperson Jennifer Psaki to understand how her bosses policies are driving massive price increases; nor do I expect Psaki to understand economics and inflationary impacts.  However, the scale of her false statements surrounding inflation are not just false, they are now dangerous.

Following the release of the consumer price index [SEE table 2], in her press briefing today, Jen Psaki outlined the White House perspective on inflation, and specifically the Fed claims surrounding “transitory inflation.”

In her statements today, Psaki referenced people comparing the prices of 2021 consumable goods to 2020 and 2019.  [Video prompted below] Within the statements, the scale of falsity is off the charts.  WATCH [Video at 19:00 to 22:42, prompted]

There is not one single thing about that three minute verbal exchange that is accurate.  Fast turn consumable goods, groceries etc., did not drop in 2020 during the first year of the pandemic.  Factually, all goods but especially consumable goods increased in price throughout the pandemic, because demand actually increased and the supply chains were unable to keep up.

Example.  A loaf of bread at $2.50 in 2019, climbed to $3.00 in 2020.  That price jumped again to $3.75 this year (2021) and will likely continue rising as monetary policy driven inflation continues devaluing our currency.

Even if, as Psaki claims, inflation slows down  (not likely) – “decelerating inflation” does not mean declining prices; it means a slower rate of price increase.   Stuff still costs more, it just costs more at a slower rate.  Consumable goods will cost more in 2022 than they do this year.  The 2022 loaf of bread likely to climb to $4.00; it will never return to the 2019 price of $2.50 because the dollar is worth less.

♦ Ask the White House: Why did Joe Biden increase food assistance benefits by 25% if inflation was transitory?

[The Consumer Price Index was released today.  The producer price index for Sept will be released tomorrow]

This massive inflation is a direct result of the multinational agenda of the Biden administration in combination with the spending spree.  Inflation is a feature not a flaw, and it has nothing whatsoever to do with COVID. The first group to admit what was obvious were banks, specifically Bank of America, because the monetary policy is the primary cause.

You might remember, when President Trump initiated tariffs against China (steel, aluminum and more), Southeast Asia (product specific), Europe (steel, aluminum and direct products), Canada (steel, aluminum, lumber and dairy specifics), the financial pundits screamed at the top of their lungs that consumer prices were going to skyrocket. They didn’t. CTH knew they wouldn’t because essentially those trading partners responded in the exact same way the U.S. did decades ago when the import/export dynamic was reversed.

Trump’s massive, and in some instances targeted, import tariffs against China, SE Asia, Canada and the EU not only did not increase prices, the prices of the goods in the U.S. actually dropped. Trump’s policies led the largest deflation in consumer prices in decades. At the same time, Trump’s domestic economic policies drove employment and wages higher than any time in the past forty years.

With Donald Trump’s policies, we were in an era where job growth was strong, wages were rising and consumer prices were falling.  The net result was more disposable income for the middle class, more demand for stuff, and ultimately that’s why the U.S. economy was so strong.

Going Deep – To retain their position, China and the EU responded to U.S. tariffs by devaluing their currency as an offset to higher prices. It started with China, because their economy is so dependent on exports to the U.S.

China first started subsidizing the targeted sectors hit by tariffs. However, as the Chinese economy was under pressure, they stopped purchasing industrial products from the EU, that slowed the EU economy and made the impact of U.S. tariffs, later targeted in the EU direction, more impactful.

When China (total communist control over their banking system) devalued their currency to avoid Tariff price increase, it had an unusual effect. The cost of all Chinese imports dropped, not just on the tariff goods.

Imported stuff from China dropped in price at the same time the U.S. dollar was strong. This meant it took less dollars to import the same amount of Chinese goods; and those goods were at a lower price. As a result, we were importing deflation…. the exact opposite of what the financial pundits claimed would happen.

In response to a lessening of overall economic activity, the EU then followed the same approach as China. The EU was already facing pressure from the exit of the U.K. from the EU system; so, when the EU central banks started pumping money into their economy and offsetting with subsidies, they essentially devalued the euro. The outcome for U.S.-EU importers was the same as the outcome for U.S.-China importers. We began importing deflation from the EU side.

In the middle of this, there was a downside for U.S. exporters. With China and the EU devaluing their currency, the value of the dollar increased. This made purchases from the U.S. more expensive. U.S. companies who relied on exports (lots of agricultural industries and raw materials) took a hit from higher export prices. However, and this part is really interesting, it only made those companies more dependent on domestic sales for income. With less being exported, there was more product available in the U.S for domestic purchase…. this dynamic led to another predictable outcome, even lower prices for U.S. consumers.

From 2017 through early 2020, U.S. consumer prices were dropping. We were in a rare place where actual deflation was happening. Combine lower prices with higher wages, and you can easily see the strength within the U.S. economy.

For the rest of the world this seemed unfair, and indeed they cried foul – especially Canada.  However, this was America First in action. Middle-class Americans were benefiting from a Trump reversal of 40 years of economic policies like those that created the rust belt.

Industries were investing in the U.S., and that provided leverage for Trump’s trade policies to have stronger influence. If you wanted access to this expanding market, those foreign companies needed to put their investment money into the U.S. and create even more U.S. jobs. This was an expanding economic spiral where Trump was creating more and more economic pies. Every sector of the U.S. economy was benefiting more, but the blue-collar working class was gaining the most benefit of all.

♦ REVERSE THIS… and you now understand where we are with inflation.

The JoeBama economic policies are exactly the reverse. The monetary policy that pumps money into into the U.S. economy, via COVID bailouts and ever-increasing federal spending, drops the value of the dollar and makes the dependency state worse.

With the FED pumping money into the U.S. system, the dollar value plummets.  Now the value of the Chinese and EU currency increases. This means it costs more to import products, and that is the primary driver of price increases in consumer goods.

Simultaneously, a lower dollar value means cheaper exports for the massive multinational conglomerates who now control our farms and farming resources (Big AG and raw materials). China, SE Asia and even the EU purchase U.S. food and raw material at a lower price. That means less food and raw material in the U.S. which drives up prices for U.S. consumers.

It is a perfect storm.  Higher costs for imported goods (durable goods) and higher costs for domestic consumable goods (food). Combine this dynamic with massive increases in energy costs from ideological Green New Deal policy, and that’s fuel on a fire of inflation.

Annualized inflation is now around 8 percent, and it will likely keep increasing in the short term. This is terrible for wage earners in the U.S. who are now seeing no wage growth and higher prices. Real wages are decreasing by the fastest rate in decades. We are now in a downward spiral where your paycheck buys less. As a result, consumer middle-class spending contracts. Eventually, this means household purchasing of durable goods drop because people have less disposable income.

Gasoline costs more (+50%), food costs more (+10% at a minimum) and as a result, real wages drop; disposable income is lost. Ultimately this is the cause of Stagflation. A stagnant economy and inflation. None of this is caused by COVID-19. All of this is caused by economic policy and monetary policy sold under the guise of COVID-19.

This inflationary period will not stall out until the U.S. economy can recover from the massive amount of federal spending.

If the spending continues, the Fed keeps printing money.  The dollar continues to be weakened.  As a result the inflationary period continues. It is a spiral that can only be stopped if the policies are reversed…. and the only way to stop these insane policies is to get rid of the Wall Street democrats and republicans who are constructing them.

Tucker Carlson hit this point very well last night:

Inflation is Hitting Every Sector – Not Transitory


Armstrong Economics Blog/Hyperinflation Re-Posted Oct 13, 2021 by Martin Armstrong

COMMENT: All these increased demands for my product is great, but it comes with quite a wholesale flower prices have also increased significantly making the cost of the arrangements much higher. Wholesale rose prices have jumped 56%. Last year I could buy a pack of 25 roses for $18, where today they cost $28. I have to pass these costs onto my customers, but even with the increased cost people are still buying more flowers this year than the same time last year.

SH

REPLY: Thank you for this info. It is hard to find any industry that is not suffering from a shortage of supply.

September Jobs Report Badly Misses Expectations With 194,000 Jobs Created vs 500,000 Expected


Posted originally on the conservative tree house on October 8, 2021 | Sundance | 235 Comments

The Bureau of Labor Statistics (BLS) has released the September jobs report [DATA HERE] showing a dismal 194,000 jobs added against a financial media and Wall Street expectation of 500,000 jobs.  [CNBC Apoplectic]   The labor participation rate in the worker economy overall has not moved since Biden’s inauguration, and stands at 61.6%.

Digging into the numbers, what is happening is exactly what we ¹should expect.  Outside the immediacy of private sector durable goods retailers seeing a pull back in consumer purchasing due to inflation (which we continue to point out is the critical issue); the local economies impacted by a declining tax base are key early indicators of contracting economic activity.  Wage gains are not keeping up with inflation.

Inside the data, you will note [Table B-1] a significant decline in Local Government Education of -144,000 jobs.  Obviously the collapse of in-school teaching leads to less jobs in this sector overall. However, the drop happened at the exact same time students were returning to a new school year, and this drop is also reflected year-over-year.  Schools were impacted by COVID in Sept 2020 more than schools are impacted by COVID in Sept 2021, yet this year the jobs are completely gone.  Something bigger is happening in this sector.

Additionally, healthcare services show a major drop in employment (-37k) specifically as it relates to elderly care and nursing homes.   All the sub-sectors of elder care are significantly lower in employment.

Retail was essentially flat (+56k) considering the scale of the sector; and durable goods within the retail sector show declines in employment.  Again this would indicate less consumer spending on durable goods, as food and energy inflation are prioritizing spending habits.  Leisure and Hospitality (+74k) with hotels and restaurants doing the majority of the hiring as the rebound in this sector continues.

[¹Here it is important to note a slow cascade effect that will take time and we are not near the peak of the trouble yet. As a historic reminder, the epicenter of the peak financial crisis (housing) was triggered in Nov/December 2005.  However, the trouble was not visible on a national scale until 2007.    Economic data shows the current triggering event took place in May/June of this year.  Make of that what you will]

(CNBC) […] The U.S. economy created jobs at a much slower-than-expected pace in September, a pessimistic sign about the state of the economy though the total was held back substantially by a sharp drop in government employment.

Nonfarm payrolls rose by just 194,000 in the month, compared with the Dow Jones estimate of 500,000, the Labor Department reported Friday. The unemployment rate fell to 4.8%, better than the expectation for 5.1% and the lowest since February 2020.

[…] “This is quite a deflating report,” said Nick Bunker, economic research director at job placement site Indeed. “This year has been one of false dawns for the labor market. Demand for workers is strong and millions of people want to return to work, but employment growth has yet to find its footing.” (read more)

[INFLATION] is terrible for wage earners in the U.S. who are now seeing no wage growth and higher prices. Real wages are decreasing by the fastest rate in decades. We are now in a downward spiral where your paycheck buys less. As a result, consumer middle-class spending contracts. Eventually, this means housing prices drop because people cannot afford higher mortgage payments.

Gasoline costs more (+50%), food costs more (+10% at a minimum) and as a result, real wages drop; disposable income is lost. Ultimately this is the cause of Stagflation. A stagnant economy and inflation. None of this is caused by COVID-19. All of this is caused by economic policy and monetary policy sold under the guise of COVID-19.

Democrats Go Insane on Taxes NYC 61.5% is Your Tax Rate!


Armstrong Economics Blog/The Hunt for Taxes Re-Posted Sep 13, 2021 by Martin Armstrong

The Democrats are simply insane. Every study on taxation has shown that the lower the tax rates, the greater the economic growth. The Reagan tax cuts resulted in people paying more in taxes because they earned more. The new tax hiked will push NYC to 61.5%. Anyone who lives there has got to be insane to stay. The Super-Rich set up trusts, foundations, and every sort of vehicle that skirts the high taxes. The Democrats always allow those because they themselves use the same tricks. Obama had little when he entered the office and now has a multimillion beach house when he was claiming the oceans were rising.

The one thing everybody better do is call your accountant. The Democrats CANNOT be this stupid. Raising taxes of this magnitude, going after businesses, and trying to end inheritance which is what they REALLY want to do – make it all now normal income, can set in motion the worse liquidation in modern history.

This is AOC wearing a dress to celebrate the occasion of trying to destroy society. She fails to understand that it takes money to start a business and to hire people. Under their plans from reliable sources, they really want to tear the country apart. They see nothing but hatred in capitalism for everything to them is just money. If you love what you do, you will be successful in life. If it’s just a job, then that is all it will ever be.

Twenty years ago if you bought a house you could just put your kid’s names on it as well – no big deal. Today, if you try that, they have to declare it as income and pay taxes on it which is not even cash. This is the new world order. You may have to sell assets this year and buy them back for selling next year of an accumulated profit may be devastating.

Kroger CFO Notes More and Faster Food Inflation Coming in Next Several Months


Posted originally on the conservative tree house on September 12, 2021 | Sundance | 78 Comments

This is not a surprise data-point for readers here.  However, it is good to see honest statements from corporate executives on what to expect with food inflation.

As noted by Kroger Chief Financial Officer Gary Millerchip in a call with financial media, we can expect to see even more rapid inflation in food prices overall in the next several months:

MSM – Cincinnati-based Kroger Co., which had $132 billion in sales last year, says inflation is running hotter than management previously anticipated and that expectations are now for prices to rise 2% to 3% over the second half of this year.

Kroger is “passing along higher cost to the customer where it makes sense to do so,” said CFO Gary Millerchip on the company’s second-quarter earnings call on Friday. (read more)

The reason for more inflation is not too difficult to understand.  Fresh foods show fast price increases immediately because they have almost no pre-existing inventory.  Fresh foods go from field to fork the fastest, and price increases show up immediately.  The same applies to restaurants.

However, processed foods and shelf stable foods have a deeper inventory, the turns on that inventory take longer, and as a consequence, it takes longer for the price increases to show up.  Millerchip is simply saying the total supply chain price increases are going to hit, and they are going to hit even harder than the last few months, as the new processed inventory carries a higher cost.

The skyrocketing prices at the grocery store are predictable based almost entirely on Joe Biden’s pro-Wall Street and Multinational Corporation policies.  Main Street is getting hammered, and the working class is suffering as a direct result.

Their specific accountability for these outcomes is why the Biden administration is trying to distract and blame COVID-19 for supply chain issues.  However, it is not COVID driving the prices, it’s Joe Biden policies that benefit multinationals.  {Go Deep}

Food products are fast-turn consumable goods, and the inflation in the food sector is jaw-dropping already.  However, fresh and processed foods turn at different inventory levels.

Obviously fresh foods spoil fastest (think produce, fish, meats and dairy), so they are replenished more quickly, and the thin supply chain (field to fork) passes along increased costs fast. Processed foods have a longer shelf life (boxed, canned, frozen, etc), and as a consequence, have a much larger inventory level in manufacturing, warehousing and retail storerooms/shelves.  Within processed foods, there is a lag between cost increase at origination and that cost hitting the stores.

The problem identified within the current ‘producer price index’, is that price increases in the raw material and intermediate material are building into the supply chain.  Keep in mind, the entire supply chain is dependent on energy costs and the fuel prices that impact transportation.

The retail consumer supply chain for manufactured and processed food products includes bulk storage to compensate for seasonality.  There are over 800 commercial and public warehouses in the continental 48 states that store frozen products (2020 data).  The previously processed food price increases are currently reflected on store shelves (already hurting).  However, the coming processed processed food price increases will be much, much higher.  We will see even higher prices on processed foods in the supermarket.

The same price increases happen for restaurants, albeit faster as they follow the similar supply chain to fresh foods.

Pro Tip – Buy your Thanksgiving and Christmas holiday shelf-stable items now (spices, condiments, flour, sugars, dried foods etc.) before the prices go up in the next few months.

Democrats Violating Everyone’s Privacy


Armstrong Economics Blog/The Hunt for TaxesRe-Posted Sep 8, 2021 by Martin Armstrong

The Democrats want the banks to turn over ALL information on everyone to the IRS. You no longer need to have an audit. They are simply adopting the idea of guilty until proven innocent when it comes to money they want to get their hands on. This is stage one, and as they move to replace paper money and cryptocurrency with their own version, NOTHING you do will ever be private. The only way to pay the 13-year-old girl next door for babysitting will be by barter.

The Bank of England tells Parliament they need to intervene on digital currency “programming” — “Digital cash could be programmed to ensure it is only spent on essentials or goods which an employer or Government deems to be sensible.” This is a completely totalitarian state — not one of freedom and human rights.  The Federal Reserve has been moving for instant payments in order to eliminate paper money. The Federal Reserve has been secretly trying to accommodate Big Tech to directly deposit with the Fed and bypass banks. “The proposed guidelines are in part a reflection of the ongoing efforts by Big Tech and FinTech firms to engage in banking activities without being subject to bank regulation and supervision.”(see the report of Bank Policy Institute).

The end game here is simple:

You will not be allowed to BUY or SELL anything without government approval!

In the USA, they are doing this in a very sneaky way and are trying to slip this one in along with social distancing and masks. They are clearly trying to push our society into an authoritarian state. The economic system is collapsing because they have borrowed since World War II and have never intended to pay anything back. Now with interest rates at a 5,000-year low, the system of borrowing endlessly year after year has failed. They can no longer fund their expenditures, so they have used COVID to scare the hell out of people in order to bring about this Great Reset. There will NEVER be a return to normal; even John Kerry told you that from the outset. He claimed that the old system was broken, so we cannot return to a system that no longer works. He just used climate change as that excuse

Little by little, step by step, they are taking us down this road of a new hybrid form of communism. They preach equality, but that does not include the elite. That is the world they are constructing for us to become mindless drones who are happy to have nothing or human motivation as in “The Matrix.”

Fauci is not even a real doctor. He went directly into government when he graduated, probably because he could not deal with patients. Yet, here he is telling you “equality” is the #1 solution to support this Great Reset.

This is a hybrid communistic system where the elite will control what we are allowed to buy and sell. They think communism failed ONLY because they had China and Russia but not the rest of the world. They think if they conquer the entire world, it will work this time, and they will be at the top. That only goes to show that they have disagreed with Ann Rand’s “Atlas Shrugged” or never read it, and they believe we are the Great Unwashed here only for their pleasure. Since all of these movers and shakers are in their 80s+, including Fauci,  perhaps their Fourth Industrial Revolution with transhumanism is their personal answer to living forever, fearing death themselves. They are pushing this agenda perhaps out of personal fear of death.

Is Australia’s Health Minister Dr. Chant being Bribed or just Stupid?


Armstrong Economics Blog/Australia & Oceania RE-Posted Sep 8, 2021 by Martin Armstrong

The Australian health chief Dr. Kerry Chant seems to have forgotten everything about medicine and really should be investigated but with a corrupt government, nobody investigates themselves. Chant is telling Australians they will have to wear masks forever and has now even said that Australians will never be allowed to return to normal because they will constantly need booster shots forever. All the studies have shown that masks are “useless” so are these people just being bribed by the elites to destroy society?  The MAJORITY of people in the hospitals now with COVID are vaccinated. The risk of these vaccines is that they may interfere with our natural immune system. Israel has already confirmed that natural immunity is 13 x better than these vaccines.

Unions in Australia are also suspect. As a reader points out:

“Trade Unions are finished in Australia for selling out their members to The Great Reset globalist agenda/takeover.
I am a life member of the NSW Fire Brigades Union and I have family in the construction union CFMEU and they have in indeed as this man says done NOTHING to push back against mandatory vaccinations.”

Something just does not smell right here.