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?

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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.

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.

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.

Queensland Australia Police Have Two Weeks to Get Vaccinated or Get Out


Posted originally on the conservative tree house on September 22, 2021 | Sundance | 274 Comments

Chickens coming home to roost?  The state of Queensland, Australia, (QLD) is located in the northeastern portion of the nation above the state of New South Wales. The biggest metropolitan areas are Brisbane to the south and Cairns to the north.  Like many states, and in alignment with the national plan, Queensland is mandating a vaccination upon citizens if they want to escape the rules and regulations of lockdowns and COVID compliance dictates.

Despite some initial signs of moderation, recently Queensland Premier Annastacia Palaszczuk has fallen into line with the national government plan and has announced she is fully prepared to be just as big a totalitarian dictator as her neighboring Premiers to the west and south.  As a consequence, Premier Palaszczuk has decreed that all Queensland police units must be vaccinated within two weeks or they will lose their jobs.  WATCH:

The citizens of Queensland will take the mRNA immunity modification serum, aka “the jab”, or they will be discarded from society.   There is a relatively small faction of reasonable police who might have a problem with that.  However, if you look at the upcoming new classes of junior officers (pictured below), you’ll get an idea of where their mindset is.

Melbourne Australia Police and Riot Squads Fire Upon Peaceful Protestors While Media Frame COVID Anti-Lockdown Protests as Domestic Extremists


Posted originally on the conservative tree house on September 22, 2021 | Sundance | 565 Comments

On day three of the Melbourne labor union protests against the brutal COVID lock-downs and forced mRNA genetic experiments, the Victorian government decided to open fire upon the peaceful protestors. The police triggered a ‘no-fly zone’ in the Melbourne metropolitan area to stop media from using their helicopters to record the protests and violent police activity.

While the official motive given by police for the media ban was to block protestors from knowing where the thousands of police were amassing; the background issue of the government wanting to keep the Australian people from seeing police open fire upon their own citizens is transparently obvious.  Americans would be wise to pay attention to all facets of how the Australian government is moving violently against their own citizens.  [PIC: Partial Protest Crowd at Melbourne Shrine of Remembrance]

As we have seen in the U.S, there is an alarming alignment between the operatives of the Australian government and the media stenographers who willingly push a “violent extremist” narrative in order to downplay the brutal police tactics being deployed against ordinary working class Victorians.   As you watch the first video below, it is well worth remembering these are the same Melbourne police units who took a knee during last years Black Lives Matter protests in Melbourne.

Thousands of heavily outfitted and well-armed jackboots -with armor plated MRAP vehicles in support- confronted the protest groups throughout the Melbourne metro area.  The police deployments forced the groups to assemble at Melbourne’s Shrine of Remembrance where a stand-off took place between the protestors and thousands of police units surrounding them.  Once they had the protestors surrounded, the police began tightening the perimeter, until they eventually opened fire with tear gas and rubber bullets.

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The riot units were essentially shooting trapped fish in a barrel, while secondary units moved in from the perimeter to arrest those targeted.  It is ironic this video was filmed at Victoria’s national memorial honoring the service and sacrifice of Australians in war and peacekeeping.   VIDEO:

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As you can see from the video on the scene, the protesting group was non violent.  The police jackboot tactics however, were extremely confrontational…. and all of this is under the premise of “protecting public health and safety.”  Think about it….

The media in Australia are fully under the control of the government and express no sympathy for the average man, woman, child or family who have yet to have their voice heard.  Those in the state of Victoria have been in a forced lock-down for almost a year, and they are told the only way they will be permitted out of lock-down is if they take an experimental mRNA gene modification treatment called a “vaccine.”

Victorian Premier Daniel Andrews has announced that anyone who does not “take the jab” will not be permitted to work, shop, attend any venue or participate in the Melbourne economy.  Vaccination passports and identification will be required for all functions of life.   What used to be freedom and liberty in the human condition is now contingent upon accepting a government forced vaccine.

The entire nation of Australia is creating a two-tiered society and dividing people between vaxxed and unvaxxed.  In essence, they are intentionally creating a fully controlled underclass or apartheid state.  The media in Australia are not even presenting an alternative viewpoint or pausing long enough to ask any substantive questions.  Within this dynamic, the average citizen is forcibly locked onto a conveyor belt they cannot escape, and at the end of the belt is a needle they must accept, or else they will be discarded.

It is incredible that no-one within the “system”, can pause long enough to give voice to the genuine concerns of the people.  It is the absence of having a voice, and the absence of having any due consideration for their concerns, that has created this horrific dynamic.   Making matters worse, the media in totality is pushing the only approved government position.

There is absolutely no voice in Australia for a large segment of common society that just want to have their inherent human rights respected.  Unfortunately, their constitution does not recognize any rights that are not provided by government.  As a consequence, millions of people are increasingly desperate.  THAT is what we are seeing play out in the city of Melbourne.

Almost all mainstream media in Australia describe the protesting groups as neo-Nazis, right-wing extremists and domestic terrorists.  This ABC news segment below reflects the least amount of propaganda amid hundreds that I have watched describing the events of the past 24 hours.   As Americans watch this news report, you might see some stark similarities to how the January 6th protest in Washington DC was framed by U.S. media.  WATCH:

“THESE are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman.  Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph.  What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.”  – Thomas Paine

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“[I]t is the greatest absurdity to suppose it in the power of one, or of any number of men, at the entering into society to renounce their essential natural rights, or the means of preserving those rights, when the grand end of civil government, from the very nature of its institution, is for the support, protection, and defence of those very rights; the principal of which, as is before observed, are life, liberty, and property. If men, through fear, fraud, or mistake, should in terms renounce or give up an essential natural right, the eternal law of reason and the grand end of society would absolutely vacate such renunciation. The right of freedom being the gift of God Almighty, it is not in the power of man to alienate this gift and voluntarily become a slave.”  ~ Sam Adams