German Inflation 22.6% – The End is in Sight


Armstrong Economics Blog/European Union Re-Posted Apr 13, 2022 by Martin Armstrong

The wholesale prices in Germany rose at a record pace in March. Compared to the same month the previous year, wholesale prices jumped by 22.6%, as the Federal Statistical Office announced on Tuesday in Wiesbaden. This is the highest increase since calculations ever began in 1962. In February, the rate was already high at 16.2%, which has been surpassed here in March. Month-on-month, wholesale prices rose 6.9%, which is yet another record increase.

Our models are pointing to serious trouble ahead for Germany and this poking Russia is all intended as a diversion from the collapse of the European economy that is underway. The negative interest rates since 2014 have wiped out the pension funds and proven that the central bank can no longer control the economy. Add to that, the braindead COVID restrictions which have dealt a serious blow through the heart of the supply chain, and we have a recipe for total economic disaster which is being reflected in the inflation rates which then leads to civil unrest.

I have stated many times, we have the WORST possible crop of world leaders I have ever witnessed in my lifetime. There is not a single character that I would be able to sit down and have an intelligent conversation with. Germany appointing Jenifer Morgan in charge of their environmental policies and the intent was to make her their Secretary of State is just astonishing. What is her role? Tell Putin to turn off his tanks because they create CO2?

These climate zealots have managed to destroy the world economy in just two years. Never in the history of humanity has there EVER been such stupidity from those in power. They should admire their heads in the mirror every day, for if history repeats, they will be dragged from their palaces and their heads might be adorning spikes with cheers of vindication.

It is well known that the first casualty of war is the truth, and nothing sorts out the lies more than troops crossing political borders. Hence, they also say that history is written by the victors. Ever since COVID, we have witnessed a rising trend of civil unrest politicians have been working hard to deliberately create war with Russia all cloaked in their real objective of controlling the planet. Ever since this intended war to poke the Russian Bear, there’s been an acceleration of every conflicting agenda on the world stage. This has crashed the world economy, ended Globalization, and divided the world into US v THEM with the only resolution being armed conflict. Our World Leaders need a war with Russia and then will turn on China as they think threatening China with sanctions will prevent them from joining Russia against the West. This will fail – China is not that stupid. Blaming the other guy is always the way to war. They need to demonize the enemy to inspire hatred that they use to manipulate war.

Biden Calls Russia Military Operation in Ukraine “Genocide”, Commits Additional $800 Million in Weapons Today


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

Yesterday in Iowa, Joe Biden called the Russian military operation in Ukraine a “genocide,” which has a very specific set of legal definitions to it.

When asked if he had seen enough evidence to support that statement Biden responded:

“Yes, I called it genocide.  It has become clearer and clearer that Putin is just trying to wipe out the idea of even being — being able to be Ukrainian.  And the amount — the evidence is mounting.  It’s different than it was last week.  The — more evidence is coming out of the — literally, the horrible things that the Russians have done in Ukraine.  And we’re going to only learn more and more about the devastation. And we’ll let the lawyers decide internationally whether or not it qualifies, but it sure seems that way to me.”  (link)

Several ground reports from European journalists indicate the U.S. military is running all of the combat operations inside Ukraine. A French reporter said on Euro News, “I thought I was with the international brigades, and instead I was facing the Pentagon.”  Now today, Joe Biden announces he is arbitrarily sending U.S. combat helicopters into the conflict.

[Tweet Link]

(WHITE HOUSE) – I just spoke with President Zelenskyy and shared with him that my Administration is authorizing an additional $800 million in weapons, ammunition, and other security assistance to Ukraine.

The Ukrainian military has used the weapons we are providing to devastating effect. As Russia prepares to intensify its attack in the Donbas region, the United States will continue to provide Ukraine with the capabilities to defend itself.

This new package of assistance will contain many of the highly effective weapons systems we have already provided and new capabilities tailored to the wider assault we expect Russia to launch in eastern Ukraine. These new capabilities include artillery systems, artillery rounds, and armored personnel carriers. I have also approved the transfer of additional helicopters. In addition, we continue to facilitate the transfer of significant capabilities from our Allies and partners around the world. 
 
The steady supply of weapons the United States and its Allies and partners have provided to Ukraine has been critical in sustaining its fight against the Russian invasion. It has helped ensure that Putin failed in his initial war aims to conquer and control Ukraine. We cannot rest now. As I assured President Zelenskyy, the American people will continue to stand with the brave Ukrainian people in their fight for freedom. (link)

White House spokesperson Jen Psaki was asked about this escalation earlier today:

.

The Biden administration is all-in for this Ukraine proxy war, taking all actions to highlight a zero-sum position.

Ukraine v Russian Empire


Armstrong Economics Blog/Ukraine Re-Posted Apr 13, 2022 by Martin Armstrong

QUESTION: We elected Zelensky who promised to end the civil war. It looks like the West is telling him not to compromise and let the Russian section go.

DH (from Ukraine)

ANSWER: On Sunday, CBS News program “60 Minutes” aired an interview with Zelensky. I believe Zelensky is still claiming evidence of Russian war crimes, saying: “We are defending the ability of a person to live in the modern world.” Despite what the press says, this is a Proxy War against Russia and the US, along with the EU and Britain. They are quite happy to use the Ukrainian people as cannon fodder. There is no possible way all of these countries would allow Zelensky to address their own people UNLESS this was a Proxy War.

The Dnieper River which runs 1,423 miles and today is the border between Belarus and Russia, was also the border of Ukraine with Russia during the Tsarist Empire at the time of Mikhail I (1613-1645) of the Romanov Dynasty. Zelensky’s claims that Putin has invaded a sovereign nation are debatable. Eastern Ukraine today was assigned to it for administrative purposes during the USSR. It was never Ukrainian territory. It is very hard to see why it is worth killing your own people for a territory that has been occupied by Russians for centuries.

This is obviously a Proxy War, and despite whatever the press says, the West is using the Ukrainian people as the Vanguard in this battle against Russia. They cannot declare war on Russia legally, so they have used Ukraine. Zelensky seems happy to accommodate, blaming civilian deaths on Putin when he shared responsibility for this war.

In Crimea, the population is predominantly Russian and Tatars where there is a population of about 250,000, accounting for about 10% of the total.

Stop Blaming Putin for Inflation


Armstrong Economics Blog/Inflation Re-Posted Apr 13, 2022 by Martin Armstrong

The Consumer Price Index soared 8.5% in March year-on-year, according to the report released by the Labor Department on Tuesday. Prices have not been this inflated since Reagan was in power in December 1981.

Former Fed Chair Ben Bernanke set the target level of inflation at 2% back in 2012. Once the Federal Reserve began pursuing a 2% level of inflation in 2012, that standard was soon set as the target for numerous central banks across the world. This all changed when the world collectively agreed to stop spinning for the coronavirus. As you can see, median inflation in the US was declining prior to 2020.

The 2% level remained in place for some time until they realized that inflation was not “transitory” and artificially low rates had diminished the central bank’s ability to control the situation. Guidelines and restrictions were lifted chaotically. The US government continued to spiral into debt by adopting new socialistic spending programs. Unemployment levels are just now recovering three years later, but the damage from COVID cannot be ignored. While wages are increasing, inflation has reached such an unsustainable level that everyone’s buying power has decreased.

By August of 2020, the Federal Reserve carefully changed its language:

“Notably, the Fed changed its language on inflation, replacing its 2 percent inflation target commitment, and instead said it will “[seek] to achieve inflation that averages 2 percent over time.”

Inflation made a notable uptick in April 2021 (4.2%) at a pace not seen since the Great Recession. By the end of Q4 2021, Chairman Powell admitted inflation was not “transitory,” and underplayed the situation that would unfold. We are now in the midst of a supply chain crisis, energy crisis, and wage-price spiral. Every variable of this situation contributes to inflation on top of a government that does not take measures to address any crisis.

White House Press Secretary Jen Psaki tried to do damage control a day before the report was released. “We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike,” Psaki said. The numbers do not lie. Inflation was on the rise well before Putin engaged with Ukraine. Government and central bank mismanagement have caused the current situation. Powell admitted they should have moved a bit quicker, but Biden remains wholly unaware of the problem and continues to worsen matters with his policies that are intended to destroy America before Build[ing] Back Better.

The World’s Busiest Shipping Port is Closed


Armstrong Economics Blog/China Re-Posted Apr 13, 2022 by Martin Armstrong

Shanghai went under a full lockdown at the end of March under China’s zero-COVID tolerance policy. When cases allegedly rose, China extended the lockdown indefinitely. Shanghai hosts the busiest container port in the world, and its inability to operate is contributing to the supply chain crisis in a profound way. A member of the EU Chamber of Commerce’s Shanghai Chapter estimated that volume was down by 40% during the first week that the ports were prohibited from operating. There is no set date for when the port will resume operation.

It is estimated that the lockdown currently imposed has imprisoned an alarming 25 million Chinese citizens in their homes, but the implications of shutting down the world’s largest shipping port amidst a supply crisis will send aftershocks throughout the global economy. To understand how crucial Shanghai’s port is to the global flow of goods, the Port of Shanghai hosts over quadruple the volume of the Port of Los Angeles (one of America’s largest shipping ports).

Those in the industry warned that this would cause problems. One of the largest international container companies, Maersk, said that Shanghai’s shutdown would cause a 30% rise in trucking costs alone.

Some businesses are operating the “closed loop” system where employees are basically unable to leave their place of work. Still, the port cannot operate with the current restrictions as there are simply not enough available workers. This is completely unsustainable. China is throwing gas on the rapidly burning supply chain and inflation crises with their current policies that will be felt across the world.

Multiple Simultaneous Food Production Impacts Create Global Concern


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

I want to be very careful here, because multiple people have sent me a version of this outline asking for opinion. Basically, is David Friedberg correct?

The discussion in this video surrounds farming as a construct of global caloric creation.  Meaning, with all that is taking place in the farming system on a global scale, will there be dramatic food shortages?  It is a complex issue.  In the larger picture what Friedberg, a former scientist within the Monsanto organization, explains is accurate; however, I would inject some nuanced dissension as it relates to U.S. farm production specifically.

The first four and a half minutes of the video are an accurate representation of the global state of farming, albeit with a little too much weight on the Ukraine-Russia aspect.  There was a preexisting issue long before Russia entered the picture. The price of fertilizer was already skyrocketing, Russia-Ukraine has made that already looming issue, worse.  WATCH First 04:30 minutes:

The problem described, about farmers deciding not to plant, is weighted more heavily in less developed countries where access to the financing for a future crop is not stable {AP Article Here}.  For most of the developed world farming will continue; it is the end product where prices will reflect the additional costs of bringing a harvest to market.  Bottom line, as the futures market is showing, crops will be more expensive.

There is going to be a problem in the same areas of the world where food stability and dependency is already an issue.  Yes, the convergence of current farm challenges will make those areas more vulnerable.  We do not know, to what extent.

The notation about a 90-day supply of food on a global basis (Northern Hemisphere) is slightly askew, as countries like the United States have a much deeper reserve and storage capacity.  We discussed this last year {Go Deep}.

Essentially, in the U.S. we operate approximately one full harvest cycle ahead of demand.   However, our problem is the COVID lockdowns in 2020 and 2021 disrupted the two food delivery systems by shutting down restaurants, cafeterias, hotels, hospitality venues, entertainment, school lunchrooms etc and limiting capacity for six months.  The government intervention seriously messed up our food supply chain. {Go Deep}

In North America I do not foresee any major scarcity of total food availability, certainly not in the fresh food supply side.  There may be shortages on specific segments within the processed and manufactured food supply chain, but those would be nuanced based on specific ingredient issues.

What we will see is continued increases in price and a demand for U.S. agricultural products to fill the voids in global markets that result from less developed nations needing the products our North American farming experts can deliver.  There will be a higher demand for us to export food materials, and when combined with the already increased cost for the harvest, that means much higher prices still coming.

Our North American farmers are awesome in their ability to maximize yield, with the customary and appropriate qualifier that ultimately mother nature will determine success or failure.   Our U.S. and Canadian farmers and ranchers are the best of the best.  Their ability to feed our nation is a national and strategic advantage, unparalleled in any other region.  They know how to do it, if the government will just get out of the way and let them work.

If it was a priority for the U.S. government to ensure U.S. food stability, they could spend a few billion by securing fertilizer and reasonably priced energy (diesel) for our farmers, simply to offset the upfront and increased production costs.  Then, just turn North America loose, pray a little bit, and let them create as much product as possible for the overall market.  Let the market demand determine the crop, and get government out of their business.

Farmers in the U.S, Mexico and Canada have the capacity to drive higher yields.  Unfortunately, the politics of war, Wall Street – and the influence of the international banking system – takes a higher priority for DC than simple farming commonsense.   Unfortunately, as we saw today, turning corn into gasoline additive just exemplifies the stupidity of the DC mindset.

On one hand, we have serious people concerned about global famine. On the other hand, we have a narcissistic occupant of the oval office, and a tribe of DC idiots worried about gasoline prices and the mid-term election.  These issues do not have to be mutually exclusive, and there is a reasonable solution for both of them.  However, all that reasonableness evaporates once the people behind a fraudulently elected DC politician walk in the room.

Will there be a dangerous level of food shortage globally?  Yes

Will there be a dangerous level of food shortage in North America? No, but there may be some scarcity.

Will there be higher prices?  Absolutely.

Unleash the farmers and unleash the energy experts and all of this maddening anxiety ends.  Unfortunately, those actions are adverse to the Build Back Better agenda.

We are in an abusive relationship with our government.

During Speech to Blame Vladimir Putin for Massive Inflation, Bird Poops on Joe Biden


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

oe Biden was in Iowa today attempting to justify the massive Bidenflation his economic policies have created.  As a result of Biden energy, fiscal and monetary policy, rising oil and gasoline prices are contributing to pre-existing inflation and crushing the U.S. economy.

As part of the White House plan to blame anyone and everyone except the Joe Biden policy agenda, Biden took to the microphones to blame Russian President Vladimir Putin.  However, reflecting the synergy of human and avian opinion, a bird flew overhead and pooped on him.  WATCH:

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

Reports of Finland and Sweden Likely to Join NATO Highlight Global Financial Cleaving Underway


Posted originally on the conservative tree house on April 11, 2022 | Sundance

The Financial Times is reporting {link here, paywall} that Finland and Sweden are likely to join the NATO alliance.  According to the reporting {also in Reuters} the application from Finland is expected in June and Sweden shortly thereafter.

Adding Sweden and Finland would be a major escalation in both the western conflict and provocations against Russia, obviously, justified by western leaders as a consequence of the Russian invasion of Ukraine.  However, in the big analysis, the global financial system appears to be the larger issue.

From the outset of the Russian military operation into Ukraine, it was obvious the western alliance was intent on an almost ‘all or nothing‘ confrontation with Russia. The only limits to what the alliance was willing to do was trigger a nuclear showdown through direct military action against Russia to protect the non-NATO country of Ukraine.

The NATO and western government response was a fast system of financial sanctions intended to cripple the Russian economy.  However, Russia responded to those actions with countermoves on the trade front, beginning to establish the first ever non-Euro and non-dollar-based trade system.  In essence, a financial trading system created by the BRICS group (Brazil, Russia, India, China and South Africa).

Therefore, if we think about the current status of geopolitics and international finance, the NATO response now involves a priority of controlling and protecting the previously established financial structures of global trade.  A NATO effort to avoid the cleaving is now underway as an outcome of the sanctions against Russia.

As one person put it, “This is a fight for the dollar as reserve currency. Imagine trying to maintain our debt when nobody wants treasury notes. If BRICS succeed, US collapses as an economic power. On the other hand, if we win, Klaus Schwab’s nutty world wins.”  I tend to agree with this outlook because it parallels something we see domestically in the U.S.

In the United States, the people behind Biden and the extreme leftists are rapidly advancing their ideological quest toward the “Green New Deal.”

Coal, oil, and gas exploration/development have been slowed, stymied and halted as the administration chases clean renewable energy goals.

However, the current problem is there’s no intermediate system of energy production to support their push.  This is driving energy costs through the roof, and that problem is magnifying inflation created by prior spending.

During their collective pandemic response, western governments all followed the blueprint laid out by the World Economic Forum (WEF), which was, in essence, to shut down human activities, lock down economies and then spend massively to fill the void.  Almost all western leaders followed this exact advice and spent tens-of-trillions in direct subsidies to people and businesses during their lockdowns and COVID mitigation efforts.

At the end of this interventionist rainbow, the collective was instructed to “build back better,” where the economies they destroyed would be rebuilt through the priority prism of ‘climate change.’  However, just like the absence of any U.S. energy transition, the WEF program also did not have a mechanism to bridge the change from ‘dirty’ to ‘clean’ energy.

All of the western government spending during their COVID plan has created two big issues (crisis):

♦ First, massive inflation in every nation who followed the government spending approach. Not coincidentally, the national rate of inflation in every nation directly correlates to the scale of their spending in relationship to their GDP.   Global inflation is raging amid the nations that locked down and then subsidized the missing economic activity with government spending.

♦ The second crisis is simple.  All of that unsustainable spending has created massive government debt, that has to be paid back.  The debt level within the western nations has skyrocketed.

However, if you take the outlook that WEF instructions were based on forethought this inflation and debt was going to be a natural consequence, a crisis created by following the plan, then it’s also likely the way out of the debt was going to be a global digital currency.  How else could the World Economic Forum members possibly expect to pay for their: (a) current spend level, and (b) grand “build back better” agenda?

That global banking system and multinational financial outlook puts a very important context to how the west would look at the BRICS financial trade mechanisms as a threat.

Additionally, if this financial and banking issue is the true motive of western government, then suddenly a lot of our internal conservative political pro-Ukraine anti-Putin commentary starts to make sense.

People have wondered why folks like Mark Levin, Ben Shapiro and other conservative voices have been pounding the table demanding U.S. military involvement and more punitive actions against Vladimir Putin.  In the U.S., people have wondered why suddenly a major section of the Republican establishment have aligned with the position of the WEF, UN, NATO, World Bank, George Soros, Hillary Clinton, etc.

If you accept the global banking system and international financial system is at risk, due to the strategies of Russia to avoid the sanctions, then suddenly the severe position of those voices makes sense.  Follow the money.

Arguably, this global economic problem (debt and inflation) was directly caused by the collective western government response to COVID.  However, now there’s another aspect that makes the debt and inflation seem small by comparison.  If there was an alternative to currencies deliberately devalued by the collective western approach to government spending, wouldn’t you want to own that?

If the financial systems, central banks, and global financial mechanisms are fractured by an entirely new system to pay for trade, i.e. the BRICS approach, we end up with two distinctly different currencies (still undetermined) to pay for trade.

This outlook puts Sweden and Finland essentially in a position of choosing banking sides.  NATO supporting the maintenance of Euros and Dollars, and the BRICS group, representing almost two thirds of the world population, fighting to go in another direction.

That is the bigger conflict.

WEF -vs- BRICS over trade currency….

…. is also NATO -vs- Russia

…. is also Climate Change -vs- Oil use.

…. is also Globalism -vs- Nationalism

…. is also Feudalism -vs- Freedom

Here We Go, White House Warns of Extraordinarily Elevated Inflation Data to Be Released Tomorrow


Posted originally on the conservative tree house on April 11, 2022 | Sundance

She did it again. Just like in February, when Psaki (seemingly out of the blue) gave a weird proactive statement about bad economic data that was going to be released the following day {LINK}. Earlier this afternoon White House spokesperson Jen Psaki gives another proactive justification for even worse inflation data that is about to be released from the Bureau of Labor and Statistics tomorrow.

In this brief soundbite, Psaki says the March inflation data that is going to be released tomorrow is going to show “Putin’s price hikes” on U.S. consumers.  However, even within the framework of her false justification, she attempts to blame Putin for gas price increases in January, when the Russian military operations did not start until February 24th.  The inflation news is going to be really bad tomorrow. How bad?  WATCH:

None of this will come as a surprise to CTH readers.  We noted in the February inflation data (released in March), that things were going to be much worse in the April release.  The reason was simple, the massive gas price increases were not yet matriculated in the February data, and the massive food inflation was not yet captured by the USDA component. All of that preceded Russia’s invasion of Ukraine.  None of it has anything to do with Vladimir Putin.

The inflation data that will be released tomorrow is the first visible data assembly of the second inflation wave now upon us.  Remember, inflation data lags behind the reality of the price increases. What the BLS will show tomorrow is the price results from the last half of Feb through the half of the month of March.  It will likely show the largest single month inflation increase in modern history.

How bad is the data going to be?

FLASHBACK TO February:  “In my estimation, the massive price increases the bureau quantified through January were the end of the first wave of massive inflation that CTH warned about last October.

“Do what you can do now to start preparing your weekly budget in ways you may not have thought about before.   Shop sales, use coupons, look for discounts and products that can be reformulated into multiple meals or multiple uses.   Shelf-stable food products that can be muti-purposed with proteins is a good start. Consider purchasing the raw materials for cleaning products and reformulate them yourself to avoid these massive increases in petroleum costs.” [October Warning]

The recent announcement of price increases we have discussed, from food producers specifically (Kraft-Heinz, Proctor and Gamble, etc.), in combination with massive fertilizer and farming costs for future yield, is the second wave that has yet to be fully quantified.  The second wave of retail inflation, only just beginning to arrive now in the February results, will extend throughout the spring.

Next month, March data reported in April, the second wave of inflation data should carry the first big jumps in gas and diesel prices.  For ordinary people, this next round of food inflation will be focused predominantly in the ‘Fresh Foods‘ categories.  Fresh produce, vegetables and fruits have short life cycles, and rapid increases in transportation costs hit that segment fast and hard.

On the positive side, our victory gardens are going up in value, very quickly.   A few backyard growing boxes can generate an easy $200 to $500/month in fresh produce as the price of ordinary row crops at the store starts to double and triple.  Mature citrus trees are worth their weight in gold right now.

The BLS data was collected at about the time of the red arrow in this graphic below (Feb 10 to 15).  You can see where the gas price goes from the point at which the inflation data was collected.  That 30% spike is what will roll-up into next month’s inflation data. (Written from the March data)