Tag Archives: GREXIT

Apr 14 2022

Producer Price Index Sets New Record at 11.2 Percent Wholesale Inflation, Highest Rate Ever Recorded


Posted originally on the conservative tree house on April 13, 2022 | Sundance 

he “Producer Price Index” (PPI) is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released March price data [Available Here] showing a dramatic 11.2% increase year-over-year in Final Demand products at the wholesale level.  This is the fifth consecutive month with the highest rate of inflation the PPI ever recorded.

The single month increase in wholesale prices of 2.3% was driven by inflation built into the supply chain at every level that shows up in the final wholesale price.  Those price increases then get passed along to consumers along with the additional costs for warehousing, transportation and delivery.  I modified Table-A (FINAL DEMAND) to take out some of the noise.

Wholesale prices of goods jumped 2.3 percent in March, and the wholesale price of food products jumped 2.4 percent.  The total demand inflation compared to last year is 11.2 percent, the highest rate ever recorded since the PPI tracking was first started.

The total final demand monthly calculation (1.4%) is lower than the final demand goods (2.3%), because final demand services are offsetting.  You may remember the discussion/analysis about prices beginning to stabilize after this month due to a contraction in demand for goods and services.  I see support for that thesis within this data.

The three phases of wholesale product creation: (1) origination, (2) intermediate, and (3) final, cycle through the economic analysis in reverse chronological order.  Roughly speaking, the flow of goods quantified is done in 30-day sequences.  Final demand this month is comparing to final demand in March 2021.  The intermediate demand goods this month will become final demand goods next month (April).

The rate of inflation behind this set of final demand goods is beginning to soften.  See Table B, Intermediate goods.  Again, modified to take out the noise:

While the yearly comparison for both processed and unprocessed intermedia goods is eye dropping, in the unprocessed intermediate demand goods, we are starting to see a lessening of monthly price increases.

In essence, prices have been rising so fast and for such an extended period of time, that we are now cycling through the rate of increase and starting to compare it to last year when the rate of increase was originally going high.  As a consequence, the rate of price increase will likely lessen, even though the actual price may still keep climbing within the manufacturing process.

The price of raw materials, and the wholesale energy costs to process those materials into finished goods, are still rising.  In addition to the consumer prices reported yesterday, this wholesale price data is showing the most recent increases (March) in fuel and transportation costs.  For the next report these figures should now plateau.

♦ BOTTOM LINE – We have not yet reached PEAK INFLATION – However, the price increases from wholesalers to retailers are now at parity.  The increased price of things coming into the supply chain are now at similar rates of increase when compared to the stuff on the shelves.

Inflation from field to fork is now fully matriculated and embedded in the total economy as a result of two massive price waves (July to October 2021 and November to March 2022).  Those prices will never fall.

Highly consumable goods like food, fuel and energy will remain at approximately the price today for a period of around five months, then we will see the third wave kick in as the new higher harvest prices hit the processors in late summer.

The prices for non-essential durable goods, like cars, electronics, appliances etc. from this moment forth will now be determined by demand.   Highly sought after goods will increase in price as more customers chase fewer products.  However, ordinary or widely available durable goods will likely start to come down in price very soon as inventories climb because consumer spending has prioritized and dropped non essential goods from their shopping lists.

To put it more succinctly:  The stuff we need will cost more. The stuff we don’t need will cost less.

Let’s Go Brandon

Apr 13 2022

Inflation Rate Jumps to 8.5 Percent as Energy, Food and Gasoline Prices Skyrocket


Posted originally on the conservative tree house on April 12, 2022 | Sundance 

This is not going to be news to CTH readers and intellectually honest analysts.  The Bureau of Labor and Statistics has released the March consumer pricing data [DATA HERE] showing the recent surge in energy, gasoline and food costs that we have all felt.

The monthly increase of 1.3% brings the annual rate of inflation to 8.5 percent year-over-year.  However, the details tell the exact story we have been outlining for well over six months.   This is the second wave of inflation being recorded.  Grocery store prices (food at home), energy prices, and gasoline prices are all driving the inflation rate. [BLS Table 1]

Again, I modified Table-1 to take out the noise.  The data shows what we have felt for the past two months.  Working class families are feeling the pinch as their wages cannot keep pace with the increase in prices on products that are a priority.  Food, housing, gasoline, energy.

If we were using the old CPI method for analysis, current inflation would be well above 20%.

That said, there are issues also inherent and visible in the data for the non-food and energy segments, what I would call the durable goods side.  First, we are seeing the beginning of the durable good contraction getting quantified as we have previously discussed.   The prices for used vehicles, electronics, appliances and other non-critical durable goods are now flatlining, or even dropping in price.

Every indication within the economy indicates this is being caused by a demand contraction.  People are not purchasing durable goods because their disposable income is gone.  This lack of demand also shows up in wage rate suppression.  Despite high employment, wages are not rising – in part because there is excess productivity in the durable good economy.

You will note from Table-2 [available here] that food away from home, restaurant food, is not climbing as high as food at the grocery store (0.3% -vs- 1.5%).   Restaurants are trying to keep prices down and their profit margins are being eroded.  They are in a tough place, because if restaurants raise prices, they may lose customers who are already feeling pain in their checkbooks.  However, they cannot hold out much longer before raising prices, because the price increases are permanent.

The good news is the March data appears to quantify the apex of the second wave rate of inflation.  The rate of increase in food, fuel and energy will now start to moderate and slow down.  The prices may, likely will, keep going up, but they will go up less dramatically than they have in the past six months.  This price plateau will hopefully remain in place until late summer, that’s when the next harvest food costs will hit in Wave-3.

On the durable goods, what we will see now is a typical demand side issue.  Price increases for durable goods will quickly, if they are not already, be less connected to material costs and more connected to demand.   Obviously, the cost to manufacture, create, produce, transport and deliver durable goods is still experiencing upward pressure due to raw materials.  However, the demand variable will now enter more dominantly.

With wage growth meek and prices still rising on essentials like food, housing, energy and gasoline, demand for non-essential durable goods will drop. The demand decline should naturally put downward price pressure on appliances, electronics, used vehicles, etc.  Unfortunately, this also contracts the overall economy, creates unemployment, and indicates “stagflation.”

(MSM) – […] The consumer price index leaped 8.5% annually, the fastest pace since December 1981, the Labor Department said on Tuesday, likely cementing Federal Reserve plans for an unusually large half-point interest rate hike early next month. That increase is up from 7.9% in February and inflation now has notched new 40-year highs for five straight months. (more)

We will need to watch the service side closely now to see if consumers start to lessen travel, entertainment, and other service side expenses.

Protect your family.  Be frugal, wise and smart with expenses.  However, do not trouble yourself with dark imaginings.

If you are like most here, you have prepared yourself with commonsense actions and you are a doer who fixes problems, not a naysayer who sits around mulling over them.  Your family, kids and/or grandkids as well as your community can benefit from wise, albeit sometimes stern, counsel.  Stand strong, stand firm and stand resolute.

All of these challenges are simply that, challenges.  Work any problem as it arises, including for the kids.  And also remember, God is in charge, not you. So, listen to his instructions.  Listen to that instinct he buried within you.  Draw upon the strength that a loving God constantly provides.

Be a vessel for those who need hope.  Be a guiding light for those who feel distressed. Be cheerfully strong among everyone around you, and thankful for all the kindness you experience.  If you get stuck, start giving….

Ultimately, everything is a choice.  So, be the lighthouse, not the rocks.

P

Mar 30 2022

An Easier Solution for Rupee-Ruble Payments


Armstrong Economics Blog/World Trade Re-Posted Mar 30, 2022 by Martin Armstrong

India imported $3.3 billion in goods to Russia in 2021, and the finance ministry has no plans to slow that source of revenue. India has not placed sanctions on Russia. The Federation of Indian Export Organizations (FIEO) announced that India will now switch to a SWIFT alternative that permits rupee-ruble payments between the two nations. This renders removing Russia from the SWIFT system a moot point for India as exporters may continue business as usual with their Russian partners. Furthermore, this will permit India to continue purchasing Russian energy at a time when other countries are shunning the resources they need the most.

In fact, India is hoping to profit off of the West’s ban on Russian exports. “Export to Russia is not much, only in agriculture and pharmacy products. Now that the whole of the West is banning Russia, there will be a lot of opportunities for Indian firms to enter Russia,” a member of the FIEO stated. Indian Oil Corp has begun purchasing more oil from Russia and there are talks of purchasing highly sought-after fertilizer from both Russia and Belarus.

India, the largest oil importer in the world, was only purchasing around 2% to 5% of their crude from Russia in recent years, but with the prospect of seeing a heavy discount, they are likely to turn to Russia instead of the Middle East. “Countries with oil self-sufficiency or those importing themselves from Russia cannot credibly advocate restrictive trading,” an Indian government official cited weeks ago.

So if there is an easy solution for rupee-ruble payments, we should expect to see an easy solution for yuan-ruble payments. These nations are looking at finances rather than politics and will profit as a result.

Mar 25 2022

Blackrock CEO Advances Proposal for Global Digital Payment System and Digital Currency


Posted originally on the conservative tree house on March 24, 2022

When CTH outlined the ‘Destination Handbasket’ framework {Go Deep}, we had no idea Blackrock CEO Larry Fink was essentially going to confirm the premise of our prediction.  Keep in mind, any digital currency can only work if there is a digital identity attributed to it – what some have called a digital passport which then creates a crypto wallet.

I have based the framework, of what appears to be over the horizon, on a set of inevitable geopolitical outcomes if the current path is continued.  The letter by Blackrock CEO Larry Fink [LINK] seems to affirm the strongest likelihood of a western-inspired digital currency eventually replacing the dollar.

NEW YORK, March 24 (Reuters) – BlackRock Inc’s (BLK.N) chief executive, Larry Fink, said on Thursday that the Russia-Ukraine war could end up accelerating digital currencies as a tool to settle international transactions, as the conflict upends the globalization drive of the last three decades.

In a letter to the shareholders of the world’s largest asset manager, Fink said the war will push countries to reassess currency dependencies, and that BlackRock was studying digital currencies and stablecoins due to increased client interest.

“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption”, he said.

[…] In the letter on Thursday, the chairman and CEO of the $10 trillion asset manager said the Russia-Ukraine crisis had put an end to the globalization forces at work over the past 30 years.

[…] “While companies’ and consumers’ balance sheets are strong today, giving them more of a cushion to weather these difficulties, a large-scale reorientation of supply chains will inherently be inflationary,” said Fink.

He said central banks were dealing with a dilemma they had not faced in decades, having to choose between living with high inflation or slowing economic activity to contain price pressures.  (read more)

You see that problem, that “dilemma” Fink mentions in the last paragraph above.  That is what we have been talking about on these pages for more than two years.   It is a dilemma western government created when they all joined together and followed the exact same financial path during the pandemic.

When western governments used the justification of the global pandemic to shut down their economies, enforce lockdowns and all of the subsequent rules, restrictions and economic pains as a direct result of those decisions, they put us on a crisis path that was always going to bring us to this “dilemma.”  Quite frankly, I do not see that unity of action as accidental, nor do I see it as organic.

All of the western leaders followed the same monetary and financial policy that was being advanced by the World Economic Forum.  They all spent like crazy, and provided tens-of-trillions in bailouts, subsidies and cash payments to cover the economic losses created by their COVID lockdowns.  They all did exactly the same thing, and that collective action is why we have ‘global inflation.’

Perversely, while inflation crushes the working class, global inflation works to their benefit by lowering the cost of the debt the politicians created, which the central bands and federal reserve facilitated.  We the citizens are suffering under inflation, but the governments that created the inflation actually benefit from it.

I will say with great deliberateness, these western governments want inflation.  Sure, it provides a political challenge for those who need to get reelected by voters, but in the bigger of big pictures, they need inflation.  Think about it in very simple terms.  If they did not want inflation, those same central banks and federal reserve policy makers would have raised interest rates six to eight months ago.

None of what is happening in supply chains and inflation is a surprise to them; they might pretend not to know, but these are not stupid people.  This is by design.  Media covers for them because, well, I’ll accept the PR firms for the regimes are idiots. However, the people who constructed these policies to take advantage of COVID-19 are not dummies.  They knew what all that intervention, manipulation and govt spending would lead to.

Where we are going now is a self-fulfilling prophecy, a destination that is a result of specific action the guided policymakers have taken.

Yes, in hindsight, all of it does seem planned to a long-term eventual conclusion.  However, I’m not going to make that specific affirmation just yet; there are still strong elements of ‘not letting a crisis go to waste’ as the leading driver.  Did these governing bodies create the underlying crisis?  We can debate that, but the point is essentially moot.  We are where we are.

The vaccination protocol created the Vax-Passport.  That has opened the door to the digital identity, “digital id.”   Any government created digital currency is going to need a digital id from the outset.

There are a lot of people asking where this is going, and what can be done to stop it.  I’m pretty certain we have accurately identified “Where This is Going,” and I’m a lot more confident now about that aspect than I was even just 24 hours ago.  However, knowing that, now we need to look closer at what they would do to stop us from disrupting it.

Mar 21 2022

Comments & Free Markets


Armstrong Economics Blog/Basic Concepts Re-Posted Mar 20, 2022 by Martin Armstrong

COMMENT #1: Well, at least I got the decline accelerating in the Ruble correct and thanks to your models knew the war and commodity cycles were turning up. Getting the fundamentals correct ahead of time is a work in progress and definitely not easy.

But while watching the Ruble crashing into weakness going into the ECM, one could not reverse position and go long the RUB. Heck, nobody could even open new positions and definitely not buy the RUB. All that was allowed was closing already existing positions. And now the RUB was even removed from the trading platform altogether.

So my original trading strategy of shorting and then going long RUB got cut short and max profits throw out the window. So much for free markets.

EM

COMMENT #2: Marty you have proven your model and computer is the key to running governments for the future living with the cycle. It is easy to see why the CIA wanted your model pinpointing Ukraine almost 10 years in advance as the key spot for war. It is also interesting how others prefer not to ever mention you for your work is not opinion like everyone else. I really hope you succeed in securing Socrates for the world long-term. We all can learn so much.

All the best from Poland

and thanks for the conference that you did here in Warsaw

VA

REPLY: The free markets are not so free. During the Civil War, even President Lincoln went after trading gold and argued those people were making money off of every battle. The EU wanted to take trading the Euro away from London because of BREXIT. The people running these governments will NEVER honor the free markets when they go against them.

Yes, it was very nice to meet everyone in Warsaw. I had not been there before. I am doing my best to make sure Socrates continues beyond my shelf life. The problem is that the world is run by the seat of its pants and it is always based upon bias, prejudice, and power-plays driven by ego. I think some people just need to have an enemy and no matter what changes, they ignore that to keep the hatred ongoing.

There are people who still call China Communist even though there is private ownership which is the opposite of communism. They will continue to hate China no matter what and that in turn only invokes a response to counter that trend. Biases like that prevent us from ever moving forward and society is at times like a scratched record playing the same track over and over again.

Feb 20 2022

Canadian Liberal Triggered By The Flag Hatred Inspired By Trudeau


Posted originally bt HodgeTwins  on Rumble on February 19, 2022 27,899 Views

Feb 20 2022

Canadian Parliament Protest Schwab, Trudeau, & WEF


Armstrong Economics Blog/Tyranny Re-Posted Feb 20, 2022 by Martin Armstrong

The Canadian Parliament shuts down probably the most important question concerning treason against the Canadian people. Stating that Schwab has bragged about infiltrating the Canadian government and naming those involved with Schwab after he has openly bragged about this accomplishment, Parliament shut down the question to make sure nobody would answer.

Then the notorious corrupt Liberal MP had the open audacity to claim this is misinformation when it is openly published even at Harvard University, one must wonder what are his connections and how much has he received in gifts, political donations, and favored status from bankers to block any such questions.

These people have betrayed their own country. Schwab’s agenda to eliminate even paper currency was to take place by 2024. But COVID is backfiring which has resulted in bringing this forward to 2023 just after the US elections.

This is the image of Canada merging from the outside. Even Archbishop Carlo Maria Viganò has come out in support of the Truckers.

Schwab was not kidding and it was not the misinformation. The Emergency Act will become permanent in Canada. Deputy Prime Minister Chrystia Freeland intends to make permanent the invasive financial surveillance system introduced as part of the “Emergencies Act” to absolutely destroy and crush the civil liberties protests and to be able to defund all opposition. Freeland is also a Young Global Leader graduate who is also loyal to Schwab. They have been indoctrinated with an authoritarian view of powers and Canada is to have its sovereignty surrendered to Schwab’s global vision. She declared:

“As of today, all crowdfunding platforms, and the payment service providers they use, must register with FINTRAC and must report large and suspicious transactions to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).” Freeland added: “This will help mitigate the risk that these platforms receive illicit funds; increase the quality and quantity of intelligence received by FINTRAC; and make more information available to support investigations by law enforcement into these illegal blockades.”

“This is about following the money. This is about stopping the financing of these illegal blockades. We are today serving notice, if your truck is being used in these illegal blockades your corporate accounts will be frozen.”

Trudeau has called in the police and they are to attack the protesters with brutal force. Leaks of communications have shown that the RCMP currently in Ottawa is to assist in the crackdown on peaceful protesters allegedly brag about using brutal force in a leaked group chat according to Rebel News. He has also called in police from Quebec who will defend him against the English-speaking truckers. This was Schwab’s and Canada’s Tiananmen Square. Canada may now have only until the 1st week of April.

This is a battle to the death for Schwab’s Great Reset. Canada MUST be driven into submission and this is critical to the ideas of Schwab and his vision for the world.

Schwab has promised these politicians dictatorial powers with the end of all democratic processes. Schwab is pushing the design of Europe upon the rest of the world whereby the head of state NEVER stands for election, neither does the European Commission which makes all laws and to fool the people that they are still relevant, they get to vote for an MP who has no power to make or overrule laws crafted by the Commission. This is the system they intend to impose of the world and politicians will NEVER again need to worry about being voted out of office. This is why governments are now protecting Schwab. He has promised them a world void of any power of the people to vote them out of power. What Schwab has not considered is that he is boxing in people to the point the only solution will be a revolution.

Feb 4 2022

New Interview: Down the Rabbit Hole to Dow 65,000


Armstrong Economics Blog/Armstrong in the Media Re-Posted Feb 4, 2022 by Martin Armstrong

Click to watch Martin Armstrong’s latest interview with the Financial Survival Network.

Feb 4 2022

Armstrong Interview on Highwire Today


Armstrong Economics Blog/Armstrong in the Media Re-Posted Feb 3, 2022 by Martin Armstrong

WE ARE WINNING

Feb 1 2022

UAE to Introduce Corporate Taxes


Armstrong Economics Blog/The Hunt for Taxes Re-Posted Feb 1, 2022 by Martin Armstrong

Tax havens are in short supply. The United Arab Emirates (UAE) recently announced that it will implement a new federal corporate tax on business profits. Part of what attracted business to the UAE was its tax-free status and the move could hurt new money from migrating to the UAE. The new tax will go into effect on June 1, 2023.

“The UAE corporate tax regime will be amongst the most competitive in the world,” the Finance Ministry stated on Monday. The tax rate will stand at 9% for profits exceeding 375,000 United Arab Emirates dirhams ($102,000), while businesses earning under that amount will not be taxed “to support small businesses and startups.” A 9% rate is still certainly competitive compared to other nations.

The UAE will not implement a tax on personal income or capital gains from real estate and equities. Free zone businesses will be permitted to exist in the country, so long as they meet all the necessary requirements. Some say the move will help the UAE move away from its reliance on oil exportation as it diversifies into trade, business, and tourism. Countries that solely rely on their natural resources have trouble maintaining long-term economic growth. However, reliance on taxation is never sustainable as governments continue to spend and whatever tax is in place will eventually rise.