Posted originally on the conservative tree house on January 12, 2022 | Sundance | 243 Comments

The Bureau of Labor Statistics (BLS) released the December inflation data today [DATA HERE] for December.  Readers on these pages are not surprised to discover that inflation in the U.S. economy has now reached a forty year high at 7 percent.  {Go Deep}

Unfortunately, the 7% in June of 1982 was when inflation was on the way down from Jimmy Carter’s failed economic policy.  This time our 7% milestone has been achieved while inflation is on the climb thanks to Joe Biden’s failed economic policies.

Carter’s mess was created by regulation, policies and oil prices.  Biden’s mess is created by the same and much more.

Yes, it will be getting worse.

That weird picture with the Bidens and the Carters comes to mind.  The scale within the picture is appropriate when considering inflation and what is to come.  Biden’s inflation is much larger than Carter’s.

As you know, the top line number of 7% is a false premise.  We are feeling much, much higher overall prices in our lives with gasoline, home heating fuel, electricity costs, housing and the astronomical prices at the grocery store.  The BLS data is backward looking, meaning it was compiled in early December 2021 for comparison to December 2020.  Where we are CURRENTLY is much worse than where we were in early December.

We are feeling the front side of the inflation hurricane right now. The consumer prices at end of January and through February are now reflecting new purchase order prices and contract prices to wholesalers, buyers and retailers.  The higher energy costs, fuel costs, warehousing costs, transportation costs and delivery costs are cumulative. As a result, the December report is simply the precursor to what will be much more damaging inflation data in Feb (showing this month) and March (showing Feb).

Additionally, the BLS data captured gas prices at their slight drop from oil prices in late November and early December.  The price of oil has now gone even higher, and the price of gasoline is once again on the rise.  We have not yet seen the worst of this folks.  Hopefully most are prepared.

I modified BLS Table-1, taking out some of the noise, to give the snapshot of how the bureau is compiling data:

You can review BLS Table-2 Here for a detailed breakdown of each category.

As previously mentioned, 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 were receiving in November, 2021, were agreed upon months before. Those terms for current arriving goods are no longer valid. The new Q1 2022 terms (purchase orders) carry higher costs, and as an outcome, higher prices to consumers are still coming.

The media are trying to put a spin on the inflation data in an effort to protect the Biden administration from the catastrophic damage caused by policy.  Some of the talking points the media are trying to use are just ridiculous, Pravda would be proud.

Reuters delivers this nonsense: “But Americans have so far remained upbeat, thanks to a tight labor market. The Conference Board’s consumer confidence index rose again in December, this time above projections by economists surveyed by Reuters. That’s fueled spending: Holiday retail sales increased almost 11% in 2021 compared with 2019, according to the Mastercard Spending Pulse. Consumers may be able to take certain supply-chain related cost hikes read more in their stride.”

But I must credit ABC as an example of the most laughable deflection which has been deployed by the White House….

As noted by Joe Biden, Jen Psaki, Ron Klain and now ABC news pushing their talking points, who do they blame?  YOU.

The Biden administration is blaming consumers by saying DEMAND is too high, DEMAND is the problem. WATCH:

As crazy as this sounds, it was predictable.   The Biden administration actually wants the demand for goods and services to contract.  Repeat, they want demand to stop.  This is the basic premise behind “lower your expectations.”

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.

If they can reduce demand by making things unaffordable, they can claim victory over inflation (mid/late 2022) and proclaim their economic policies a success. The prices will never drop, but the percent of change will stall out.  They will push the windmills, sustainable algae cakes, and other ideological quests from the Moonbat tribe who worship at the altar of climate change.

The downside of the White House achieving what they call “success” is unfortunately, by the time we reach that point we will have nothing left; we’re broke. Prices will finally level off, but the savings of Americans will have been depleted, and wage growth will take years, if ever, to catch up.  You will own nothing, and be happy.

Posted originally on the conservative tree house on January 12, 2022 | Sundance | 335 Comments

Earlier today, the White House pushed the Director of the National Economic Council, Brian Deese, to the podium to defend the administration from the outcomes of their economic policies.   Consider this presser the pre-quake tremors.

Mr. Deese begins his presentation by saying giving American workers back their jobs, after shutting down their workplaces and locking out their ability to work at their job, is the equivalent of creating new jobs; the administration is very proud of their magnanimity. Mr. Deese then moves on to the inflation data from today and celebrates a “decrease in the rate of price increases.”  Yes, he used those exact words.

Deese then goes on to say [01:59] that despite the claimed 7% inflation, prices at the grocery store are not higher, gas prices have dropped, home heating costs and natural gas costs are lower, and things are going swimmingly.   I’m not joking about any of that, just watch the first four minutes:

There was really bad news following the White House celebrating their current economic success. Brian Deese stated the White House intends to use the federal government to get involved in supply chains (distribution), pricing (federal price controls), availability (distribution of products under newly claimed emergency federal authority power via the “pandemic”) and providing relief (protecting urban areas).

What Deese is saying there [4:00 – 09:00] is the worst thing we could ever want to hear when there are massive price increases and simultaneous shortages.  The federal government is ‘leaning forward’, and is going to get more involved.

Then at 09:00 of the video, the alarm bells start ringing.  Journalists asking Brian Deese what the White House is planning to do to get involved and provide national food security.  “The shelves are too empty, and the food is too expensive. What is the White House going to do?”

Whiskey – Tango – Foxtrot!   Danger Will Robinson, DANGER!!https://www.youtube.com/embed/RmIzv98oMEQ?start=540&feature=oembed

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Supermarket gateways, vaccine checkpoint systems, coming soon to all major metropolitan areas.

Armstrong Economics Blog/Inflation Re-Posted Jan 12, 2022 by Martin Armstrong

QUESTION: Marty, you have said that when the currency collapses, all tangible things become money in a barter sense. I believe you were talking about the collapse of hyperinflation in Germany. Has that been consistent throughout history?

Thank you for a fantastic WEC

PK

ANSWER: Oh, absolutely. This is the standard reaction within society. You must understand that all the theories of the Austrian School of Economics are quite limited. They focused on a period when money in the FX markets simply traded based upon the metal content. There was no premium to one currency over another because of a superpower status as we have today with the US dollar or in ancient times in terms of Persia, Athens, Alexander the Great, or Rome. All of their coinages were imitated establishing that the metal content was only the base value.  They carried a premium over the metal content based upon their economic dominance.

Emperor Diocletian completely restructured the Roman tax system. In the wake of the Monetary Crisis of the 3rd Century, the purchasing value of the coinage collapsed, and thus he was forced to requisition supplies from the provinces in order to allow the government to continue to even function.

Diocletian (284-305 AD), therefore, transformed this requisition into a tax, replacing the old monetary forms of taxation. Diocletian transformed that taxes would be paid in kind, that is, in the form of products such as supplies and food. This gave Diocletian the opportunity for a massive reorganization of how the empire imposed taxation. Diocletian and his administrators came up with a basic unit of taxation, iuga, which was maybe called capita. The iuga was based on land and labor, but in order to be fair, it also took into account the fertility of the land, the
value of the local crops, etc. Consequently, using this information the Roman government could calculate the expected productive output of the Roman Empire as a whole on a year-to-year basis. To also accomplish this, he imposed an empire-wide census.

Only after the Roman currency was restored and Diocletian reintroduced silver coinage did the government continue to collect taxes in coinage, but it was now more definitive based upon production. Hence, the commodities were then translated into coinage.

Thus, you can see that during the Monetary Crisis, the Roman state refused to accept its own coinage and imposed taxes to be paid in raw commodities.

Nearly 100 years later, once again, the taxation declined to accept its own coins for many were clipped and counterfeited. Under Valentinian I (364-375 AD), the taxes were imposed in metal content. You would pay in the coin, the tax collector would melt them down, and your taxes were determined purely in metal content.

There are numerous examples from history that show what to expect when the government no longer accepts its own currency in payment for taxes.