California Gasoline Exceeds $8 a Gallon


Armstrong Economics Blog/Energy Re-Posted Oct 21, 2021 by Martin Armstrong

Maybe when it hits $20 they will stop voting Democrat.

Meat Prices on the Rise


Armstrong Economics Blog/Agriculture Re-Posted Oct 22, 2021 by Martin Armstrong

(Image from Statistics Canada: Prices for meat products rise year over year in September)

Canada’s CPI rose 4.4% YoY this September, according to Statistics Canada. Every major sector saw gains, but meat prices spiked 9.5%, marking the fastest pace of growth since April 2015. Canada’s Food Price Report for 2021, released in December 2020, predicted that meat prices would rise 4.5% to 6.5% in 2021, a drastic underestimate. Dr. Sylvain Charlebois, project lead and Director of the Agri-Food Analytics Lab at Dalhousie University warned people that they should develop “immunity” to rising prices. “Immunity to higher food prices requires more cooking, more discipline and more research. It’s as simple as that.” Gaslighting the people to believe they need to change their lives, rather than government change their policy, is at play once again.

Let me remind you that Bill Gates and others have been advocating for a move to 100% synthetic beef. But his logic only applies to the “rich” countries such as the US and Canada. “Weirdly, the US livestock, because they’re so productive, the emissions per pound of beef are dramatically less than emissions per pound in Africa,” Gates said in an interview in February 2021. “So no, I don’t think the poorest 80 countries will be eating synthetic meat. I do think all rich countries should move to 100% synthetic beef. You can get used to the taste difference, and the claim is they’re going to make it taste even better over time. Eventually, that green premium is modest enough that you can sort of change the [behavior of] people or use regulation to totally shift the demand.” This ties into the climate change agenda and the idea that starvation can help us shift to zero CO2. I should mention that the article added a disclaimer that Bill Gates is an “investor either personally or through Breakthrough Energy Ventures in several of the companies he mentions below, including Beyond Meats, Carbon Engineering, Impossible Foods, Memphis Meats, and Pivot Bio.”

Biden and Trudeau have made it known that they are on board with the climate change agenda, so that could be a preview of what is to come. Back to Statistic Canada’s December report – the forecast lists COVID-19 restrictions and the oil price war for rising food prices. Perhaps a certain pipeline could have assisted the fuel crisis. Yet, Biden rescinded the permit early in his presidency, and Trudeau feigned disappointment but did not push back on the matter. Basically, the two main components that the report notes are somewhat within government’s control.

How will this affect Canadian families? So far, the average food expenditure for a family of four is C$13,907, a 5% increase of C$695 compared to last year.

Viewing Inflation Through Rose-Colored Glasses


Armstrong Economics Blog/Inflation Re-Posted Oct 18, 2021 by Martin Armstrong

Once “we get the pandemic under control, the global economy comes back, these pressures will mitigate and I believe will go back to normal levels,” Treasury Secretary Janet Yellen stated, echoing “transitory” sentiments by Fed Chairman Jerome Powell. Powell believes supply chain bottlenecks are the main culprit for inflation. Well, the Biden Administration appointed the secretaries of Commerce, Agriculture and Transportation to create a supply chain task force to fix the influx issues.

Sameera Fazili, a deputy director of the White House National Economic Council, stated, “Our approach to supply chain resilience needs to look forward to emerging threats from cybersecurity to climate issues.” Is climate change the issue here? Is this an indication of where the government will misdirect resources once again? Fazili further displayed how out of touch the government is with the current crisis by saying inflation due to supply shortages is “kind of [a] good problem to be having,” as it indicates demand. The countless number of businesses and consumers currently paying for basic living expenses at up to 30-year highs may not see the glass half full at the moment.

Then, the Biden Administration met with the workers at the Port of Los Angeles this week, where it was agreed upon that the port would operate 24/7 to address issues. Ports in Los Angeles and Long Beach, California, account for 40% of all shipments into the US, which seems to be a good start. Even Walmart, FedEx, and UPS have agreed to unload their shipments at non-peak hours to help the process. Oh, wait, the ongoing worker shortage. Companies are begging people to apply, and it remains to be seen whether the ports will be able to maintain proper staffing to run at full capacity around the clock. Then the need for a sufficient number of truck drivers becomes an issue as well. Even if the ports do reach full capacity, what about the spike in fuel prices? Energy prices have caused the price of transportation to skyrocket, which is then passed on to the consumer. The US government is approaching this issue from a domestic standpoint as well and not factoring in the reason why inflation and supply shortages are not limited to the US.

Socrates indicated that inflation could rally into 2034, and based on the current solutions, the computer will likely be correct once again. Perhaps we should all view inflation through rose-colored glasses and view the 5.4% YoY spike in September as “kind of a good problem to be having.”

The Psychology Behind Consumer Spending and Hedonic Adaptation


Armstrong Economics Blog/Behavioral Economics Re-Posted Oct 18, 2021 by Martin Armstrong

Consumer debt in the US reached $14.88 trillion in 2020, according to Experian’s consumer debt study. That is a $3 trillion increase in the past decade, and spending in 2021 has only amplified. Nearly 42% of US adults have reported falling deeper into debt since March 2020, and according to a survey by BankRate.com, 2,400 of 1,297 adults had credit card debt of which 47% contributed that debt to the pandemic. Credit card debt is difficult to crawl out from, with the average APR well above 16%. Even more alarming is that 54% of adults hold on to their credit card debt for at least a year, and with that rising interest, it will take years to pay it off (if ever).

Inflation is not deterring retail sales in the US. I have stated that other countries line up to sell their exports to America, making the US the top consumer economy, and the top economy overall as consumer spending accounts for two-thirds of GDP. Even with inflation up 5.4% YoY in September, retail sales spiked 0.7% despite analysts’ at the Dow predicting a -0.2% decline. Why?

Of course, people must spend to meet their basic living expenses, and those expenses have spiked in every area from food, energy, to real estate. However, there is additional spending occurring post-pandemic as optimism rises. People hoard when they fear the future. Without taking into account other factors, people are beginning to spend again because the easing restrictions and vaccinations has led them to believe that their future financial situations will brighten.

A study on the psychology of consumer spending points to interesting aspects of human nature (Carter T.J. (2014) The Psychological Science of Spending Money). “There is obviously the direct monetary cost, but also the opportunity cost: all of the other ways that one could have spent this money must now be foregone. Thus, a more psychological definition of the psychological act of spending money would be a simultaneous loss (of money and opportunity) and gain (of some good or service) for oneself and/or someone else that one chooses to undertake based on some beliefs about future hedonic states,” as noted by a 2014 study on consumer behavior (Bijleveld E., Aarts H. (eds) The Psychological Science of Money. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-0959-9_10). The study found that the act of spending itself is “hedonically neutral,” and they used the analogy that “dropping $20 down a storm sewer would feel worse than finding $20 on the street would feel good.”

However, anticipated v anticipatory emotions come into play before acquiring new physical possession, be it a stock in your portfolio or a new iPhone in your pocket. On anticipation, we may feel a natural high as “we decide whether and how to spend money based on how we anticipate the various courses of action will make us feel.” (Mellers et al., 1999 ; Shiv & Huber, 2000). Anticipatory emotions are what we experience when we actually acquire the purchase (e.g., we may feel happiness after purchasing equity that we expect to profit on or guilty after buying a candy bar).

The study dissects consumers into different categories, but for the sake of keeping the blog post a reasonable length, let’s go right to the source – hedonic adaptation (e.g., after positive (or negative) events (i.e., something good or bad happening to someone), and a subsequent increase in positive (or negative) feelings, people return to a relatively stable, baseline level of affect (Diener, Lucas, & Scollon, 2006). “Focusing only on the immediate spike in happiness and ignoring the subse-quent [sic] decline means that the anticipated experience—the one on which people base their expectations, and thus, their decisions—may be quite different from the actual experience, increasing the chances of disappointment.” So, we may experience a short spike in dopamine after a purchase, but that high may wear off. The pain of payment affects all consumers, but interestingly, paying with a credit card temporarily mitigates the negative feelings associated with a payment:

“Cash payments are immediate and visceral—the money literally leaves your hands and becomes some-one [sic] else’s possession. Credit cards, on the other hand, are abstract and distant; they allow you to put off the pain of paying until next month, often while enjoying the benefit immediately. Spending money this way may seem painless, and almost certainly does reduce the negative anticipatory emotions that might prevent one from making a purchase, but it only forestalls the inevitable. When the end of the month rolls around and the credit card bill comes due, that pain may actually be magnified because the pleasure you experienced is already in the past.”

Cash transactions are becoming an ancient relic, and if the government had its way, we likely wouldn’t pay in cash at all. As online buying rises in popularity and people opt to pull out their plastic cards rather than physical paper, the initial cost of the purchase may not resonate. Retail therapy is in itself a hedonic act that may provide short-term happiness but often leads to buyers’ remorse when the purchase cost outweighs the benefits. It is important to note the risks associated with this move into a cashless society. The immediate impact of a purchase may not be felt for some time, at which it may be too late. As they say, when you’re in a (debt) hole, stop digging.

Stagflation is Here


Armstrong Economics Blog/Economics Re-Posted Oct 18, 2021 by Martin Armstrong

QUESTION: When do we talk about stagflation?

F

ANSWER: We are already experiencing it. Normally, the standard definition of “stagflation” has been explained as slow economic growth with relatively high unemployment/or economic stagnation that takes place with rising prices. Some have also defined it as a period of inflation combined with a decline in the gross domestic product (GDP).

Stagflation became a term that defined the 1970s because economic growth was still positive, but the rate of inflation was far greater due to the price shock of the OPEC embargo. Because of the Democrats constantly pushing to raise taxes, they sent corporations fleeing offshore, and it was NOT merely because of the tax rate. I testified before the House Ways & Means Committee on taxation and they wanted to know why NO American company got a contract from China like constructing the Yellow River Dam. I explained that German companies were NOT taxed on worldwide income, and as such, they were already 40% less than an American company because Americans pay taxes on worldwide income, and the ONLY other country to that was Japan. Thus, American companies moved offshore, NOT because labor was cheaper, but so they could complete.

As a result, I provided our analysis that showed when we allocated trade according to the flag of the company instead of where something was manufactured, then the US had a trade surplus instead of a trade deficit. Trump understood that and offered a one-time tax deal to bring their profits home. The Democrats screamed because they wanted 40% in taxes. But they would not bring the money home and so they got 0%.

Currently, as we move into 2024, this entire COVID scam has seriously disrupted the supply chain. Companies shifted to Just-In-Time inventory systems to save on financing an inventory. But then COVID lockdowns came and this resulted in chronic shortages.

So your answer is we are already in a STAGFLATION mode because inflation will surpass economic growth. With the dramatic tax increases the Democrats want to shove down the economy’s throat, all we will see is a decline in economic growth with rising prices thanks to chronic shortages. So we get the worst of two worlds.

The Democrats are deliberately pushing the World Economic Forum agenda and are actively trying to confiscate wealth while simultaneously crushing the economy to Build Back Better. Just like George Bush Jr took the blame for the Iraq war, which was all Cheney, Biden will go down in history as the patsy for this foreign infiltration of the United States to change our economy into a Marxist wonderland.

Unstable White House Occupant Erupts Into Angry Outbursts While Delivering Remarks in Connecticut


Posted originally on the conservative tree house October 15, 2021 | Sundance | 316 Comments

The White House occupant visited Storrs, Connecticut, today for the dedication of the Dodd Center for Human Rights at the University of Connecticut.

However, during the rebranding/rededication ceremony a familiar angry and intemperate disposition erupted. A very inappropriate disposition familiar to anyone who has been around a dementia patient.  WATCH:

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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 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.

BLS Report – 4.3 Million US Workers Voluntarily Quit Their Jobs in August


Posted originally on the conservative tree house on October 12, 2021 | Sundance | 260 Comments

The Bureau of Labor Statistics (BLS) released the job openings and labor report for August today [DATA HERE].  The data shows that 4.3 million U.S. workers voluntarily quit their jobs in the month of August.  This is a significant jump from prior.

The “Quits” section [Table 4 breakdown] shows quits increased in August to 4.3 million (+242,000). The quits rate increased to a series high of 2.9 percent. Quits increased in accommodation and food services (+157,000); wholesale trade (+26,000); and state and local government education (+25,000). Quits decreased in real estate and rental and leasing (-23,000). The number of quits increased in the South and Midwest regions:

While this data is interesting and significant, it is only one data point within the larger U.S. main street economy.  Rather than me extrapolating on this data, I would like to hear your perspective based on your own local feeling about what is going on in your area.

Key points of reference would include:

  • While this is potentially related to vaccine mandates, the time frame in August is before the Biden mandatory vaccination requirement made on September 9th.
  • Housing prices overall (macro level) were/are high.  There is a lot more home equity amid working class families who own homes.  This could translate to a greater ability to change jobs or cash out for  a longer financial plan.
  • Workers in the real estate and leasing segment did not quit.
  • The highest quit rates were in the regions with the lowest cost of living.
  • Inflation is massive

I am interested to read your opinions on what could potentially be the largest contributing factor based on your town, city or neighborhood.

Ignore the financial pundits.  The question is: what do you make of this?

Jennifer Psaki was asked about this quit jump and she was poorly briefed in order to answer the question.  She is clueless.

Airline and Transportation Group, US Freedom Flyers, Speak Out Against COVID-19 Forced Vaccinations


Posted originally on the conservative tree house on October 11, 2021 | Sundance | 216 Comments

A group of transportation workers led by airline pilots speak out about the danger of forced medical procedures represented by the the vaccine mandate.  This video from US Freedom Flyers might help explain the current airline industry issues that have recently been in the news.   From their website:

“We are a group of transportation professionals representing the air, rail, and trucking industries who are spearheading efforts to protect medical health freedom. Our goal is to push back against the US government’s threats of vaccine mandates for private businesses. We know this effort is not simply a matter of employees versus companies, but citizens opposing illegal and tyranical mandates by the US government.” (link)

“US Freedom Flyers is a group of transportation industry employees who have come together to fight federal and state mandates which aim to strip Citizens of their right to medical freedom. Together, in partnership with Health Freedom Defense Fund and The Davillier Law Group, we lead to preserve Informed Consent and defend Constitutional rights.” (read more)

The co-founder of US Freedom Flyers, Joshua Yoder, appeared on Fox News with Tucker Carlson earlier this evening to discuss:

As we previously outlined, this is not about vaccines per se’, this is more about a slippery slope of having the government dictate how you can live your life and earn a living.

If they can force you to have a medical procedure, and then carry documentation of that procedure in order to work… why can’t they force you to get a small electronic implant of your identification, which would coincidentally include your medical authorizations for work?

It’s just a metal detector…. it’s just taking off your shoes… it’s just wearing a mask…. it’s just a vaccination….. it’s just a COVID passport… it’s always, “just”.

Factually I do not believe a federal mandate for a vaccine is even possible or legal. It appears to me that all of Biden’s threats in this regard are simply that, threats.

The purpose of the threat is to push people to take the vaccine without actually attempting a legal federal mandate; and that approach so far has been successful.  However, now they are going to encounter the more hard-core groups who will not concede liberty or freedom to a federal mandate.

It is obvious Anthony Fauci also knows a federal mandate will lose in court when challenged.  The fact that Fauci brings up state vaccination requirements for education, as examples of historically forced vaccinations is both a strawman argument and structurally false.  There has never been a FEDERAL mandate for any vaccination.  All the vaccinations Fauci discusses (ex. his kids) were state mandates.  Each state also has a different set of standards and laws for children and vaccines.  There is nothing federal.

The federal government is attempting to set up a federal work authorization standard for private businesses.  Non compliance means you cannot work, or you lose your existing job if your employer goes along with the government demand. THAT alone should alarm everyone.