The Fed Has Spoken


Armstrong Economics Blog/Central Banks Re-Posted Dec 17, 2021 by Martin Armstrong

The Federal Open Market Committee plans to taper its asset purchasing program by $30 billion per month. Starting in January, the central bank will begin buying $60 billion in bonds monthly, citing “inflation developments and the further improvement in the labor market.”

As for interest rates, the Fed is considering as many as three rate hikes in 2020, followed by two additional hikes in 2024. This comes after the Fed artificially lowered rates to near zero for the longest amount of time in the history of the Federal Reserve.

“With inflation having exceeded 2 percent for some time, the committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment,” the central bank stated. Unemployment reached a post-pandemic low of 4.2% last month, but nearly 7 million Americans are still unemployed.  “Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation,” the statement continued. Now, the central bank believes inflation will somehow reach 2.6% in 2020, with core inflation dropping to 2.7%.

The central bank sees reduced GDP growth this year, dropping the forecast to 5.5% from 5.9%. GDP in 2022 is now estimated to reach 4%, and 2.2% in 2023.

Authentic Soviet Union Recipe


Armstrong Economics Blog/Socialist Re-Posted Nov 4, 2021 by Martin Armstrong

“What will you use to peel your imaginary potatoes in the upcoming socialist utopia?” questions the Babylon Bee. Let’s hope the chef (self-proclaimed Socialist influencer) shared the imaginary potatoes and single pea instead of hoarding them like a gluttonous member of the bourgeois.

Inflation to Rise into 2034?


Armstrong Economics Blog/Economics Re-Posted Oct 14, 2021 by Martin Armstrong

Inflation continued to surge, reaching 5.4% in September. Janet Yellen has never been right about anything and keeps calling this “transitory,” as if it will vanish in a few weeks. The Labor Department’s Consumer Price Index, which is supposed to measure a basket of goods and services as well as energy and food costs, came in at 5.4% in September from a year earlier, well beyond expectations. However, our model was projecting a rise in inflation into 2021 which is 13 years up from the November 2008 low. It is interesting how the COVID restrictions with lockdowns came in on target with our computer’s forecast. Curious how events seem to fulfill the forecast when it is done by a computer rather than human judgment.

Nevertheless, as you can see from the chart, inflation has bounced on a month/month basis, but it has not yet reached the Downtrend Line. The long-term forecast beyond a mere decade projects the historical high will be due in 2034, which should exceed all previous highs. A month/month number above 1.05% will signal that inflation is breaking out, and we will indeed make all-time record highs going into 2034.

4.3 Million Quit Jobs in August – Vaccines?


Armstrong Economics Blog/Vaccine Re-Posted Oct 14, 2021 by Martin Armstrong

The numbers are out — 4.3 million people in the US quit their jobs in August. This is the largest number since 2000. The leading sector is hotels and restaurants. I have a friend who has a daughter who had two jobs. She worked as a waitress/bartender at night and at a health food store during the day. She was very industrious, to say the least, and quite impressive. However, she quit the health food job because they demanded a vaccine. She said the bar owner was going to impose a vaccine rule and more than 50% of the staff said they would quit.

Meanwhile, New York’s bars and restaurants are hurting for business because of the vaccine mandates. Our most honorable leaders, who are most likely taking money from Pfizer lobbyists worldwide, are realizing that resistance is not futile. You can mandate vaccines and pretend they are 100% safe, but the truth always surfaces. The people can bring down the entire system if they simply refuse to participate.

Many journalists are too busy selling Biden’s propaganda about the vaccines. The FDA admits there are risks, but they, in their sole discretion, announced they “believe” the benefits outweigh the risk without any explanation of the analysis or a single word of caution (e.g., if you have certain conditions, you should not take the vaccine) despite doing so for other vaccines. So while the press and the Biden Administration are ignoring the facts and the trend, this only raises the question: How much has Pfizer and Moderna paid you?

Jen Psaki Tells Stunning and Dangerous Lies About Transitory Inflation, Claims Price Increases Will Stop – They Won’t


Posted originally on the conservative tree house on October 13, 2021 | Sundance | 249 Comments

I do not expect White House Spokesperson Jennifer Psaki to understand how her bosses policies are driving massive price increases; nor do I expect Psaki to understand economics and inflationary impacts.  However, the scale of her false statements surrounding inflation are not just false, they are now dangerous.

Following the release of the consumer price index [SEE table 2], in her press briefing today, Jen Psaki outlined the White House perspective on inflation, and specifically the Fed claims surrounding “transitory inflation.”

In her statements today, Psaki referenced people comparing the prices of 2021 consumable goods to 2020 and 2019.  [Video prompted below] Within the statements, the scale of falsity is off the charts.  WATCH [Video at 19:00 to 22:42, prompted]

There is not one single thing about that three minute verbal exchange that is accurate.  Fast turn consumable goods, groceries etc., did not drop in 2020 during the first year of the pandemic.  Factually, all goods but especially consumable goods increased in price throughout the pandemic, because demand actually increased and the supply chains were unable to keep up.

Example.  A loaf of bread at $2.50 in 2019, climbed to $3.00 in 2020.  That price jumped again to $3.75 this year (2021) and will likely continue rising as monetary policy driven inflation continues devaluing our currency.

Even if, as Psaki claims, inflation slows down  (not likely) – “decelerating inflation” does not mean declining prices; it means a slower rate of price increase.   Stuff still costs more, it just costs more at a slower rate.  Consumable goods will cost more in 2022 than they do this year.  The 2022 loaf of bread likely to climb to $4.00; it will never return to the 2019 price of $2.50 because the dollar is worth less.

♦ Ask the White House: Why did Joe Biden increase food assistance benefits by 25% if inflation was transitory?

[The Consumer Price Index was released today.  The producer price index for Sept will be released tomorrow]

This massive inflation is a direct result of the multinational agenda of the Biden administration in combination with the spending spree.  Inflation is a feature not a flaw, and it has nothing whatsoever to do with COVID. The first group to admit what was obvious were banks, specifically Bank of America, because the monetary policy is the primary cause.

You might remember, when President Trump initiated tariffs against China (steel, aluminum and more), Southeast Asia (product specific), Europe (steel, aluminum and direct products), Canada (steel, aluminum, lumber and dairy specifics), the financial pundits screamed at the top of their lungs that consumer prices were going to skyrocket. They didn’t. CTH knew they wouldn’t because essentially those trading partners responded in the exact same way the U.S. did decades ago when the import/export dynamic was reversed.

Trump’s massive, and in some instances targeted, import tariffs against China, SE Asia, Canada and the EU not only did not increase prices, the prices of the goods in the U.S. actually dropped. Trump’s policies led the largest deflation in consumer prices in decades. At the same time, Trump’s domestic economic policies drove employment and wages higher than any time in the past forty years.

With Donald Trump’s policies, we were in an era where job growth was strong, wages were rising and consumer prices were falling.  The net result was more disposable income for the middle class, more demand for stuff, and ultimately that’s why the U.S. economy was so strong.

Going Deep – To retain their position, China and the EU responded to U.S. tariffs by devaluing their currency as an offset to higher prices. It started with China, because their economy is so dependent on exports to the U.S.

China first started subsidizing the targeted sectors hit by tariffs. However, as the Chinese economy was under pressure, they stopped purchasing industrial products from the EU, that slowed the EU economy and made the impact of U.S. tariffs, later targeted in the EU direction, more impactful.

When China (total communist control over their banking system) devalued their currency to avoid Tariff price increase, it had an unusual effect. The cost of all Chinese imports dropped, not just on the tariff goods.

Imported stuff from China dropped in price at the same time the U.S. dollar was strong. This meant it took less dollars to import the same amount of Chinese goods; and those goods were at a lower price. As a result, we were importing deflation…. the exact opposite of what the financial pundits claimed would happen.

In response to a lessening of overall economic activity, the EU then followed the same approach as China. The EU was already facing pressure from the exit of the U.K. from the EU system; so, when the EU central banks started pumping money into their economy and offsetting with subsidies, they essentially devalued the euro. The outcome for U.S.-EU importers was the same as the outcome for U.S.-China importers. We began importing deflation from the EU side.

In the middle of this, there was a downside for U.S. exporters. With China and the EU devaluing their currency, the value of the dollar increased. This made purchases from the U.S. more expensive. U.S. companies who relied on exports (lots of agricultural industries and raw materials) took a hit from higher export prices. However, and this part is really interesting, it only made those companies more dependent on domestic sales for income. With less being exported, there was more product available in the U.S for domestic purchase…. this dynamic led to another predictable outcome, even lower prices for U.S. consumers.

From 2017 through early 2020, U.S. consumer prices were dropping. We were in a rare place where actual deflation was happening. Combine lower prices with higher wages, and you can easily see the strength within the U.S. economy.

For the rest of the world this seemed unfair, and indeed they cried foul – especially Canada.  However, this was America First in action. Middle-class Americans were benefiting from a Trump reversal of 40 years of economic policies like those that created the rust belt.

Industries were investing in the U.S., and that provided leverage for Trump’s trade policies to have stronger influence. If you wanted access to this expanding market, those foreign companies needed to put their investment money into the U.S. and create even more U.S. jobs. This was an expanding economic spiral where Trump was creating more and more economic pies. Every sector of the U.S. economy was benefiting more, but the blue-collar working class was gaining the most benefit of all.

♦ REVERSE THIS… and you now understand where we are with inflation.

The JoeBama economic policies are exactly the reverse. The monetary policy that pumps money into into the U.S. economy, via COVID bailouts and ever-increasing federal spending, drops the value of the dollar and makes the dependency state worse.

With the FED pumping money into the U.S. system, the dollar value plummets.  Now the value of the Chinese and EU currency increases. This means it costs more to import products, and that is the primary driver of price increases in consumer goods.

Simultaneously, a lower dollar value means cheaper exports for the massive multinational conglomerates who now control our farms and farming resources (Big AG and raw materials). China, SE Asia and even the EU purchase U.S. food and raw material at a lower price. That means less food and raw material in the U.S. which drives up prices for U.S. consumers.

It is a perfect storm.  Higher costs for imported goods (durable goods) and higher costs for domestic consumable goods (food). Combine this dynamic with massive increases in energy costs from ideological Green New Deal policy, and that’s fuel on a fire of inflation.

Annualized inflation is now around 8 percent, and it will likely keep increasing in the short term. This 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 household purchasing of durable goods drop because people have less disposable income.

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.

This inflationary period will not stall out until the U.S. economy can recover from the massive amount of federal spending.

If the spending continues, the Fed keeps printing money.  The dollar continues to be weakened.  As a result the inflationary period continues. It is a spiral that can only be stopped if the policies are reversed…. and the only way to stop these insane policies is to get rid of the Wall Street democrats and republicans who are constructing them.

Tucker Carlson hit this point very well last night:

How Soviet Communism Worked


Armstrong Economics Blog/Socialist Re-Posted Oct 9, 2021 by Martin Armstrong

Kroger CFO Notes More and Faster Food Inflation Coming in Next Several Months


Posted originally on the conservative tree house on September 12, 2021 | Sundance | 78 Comments

This is not a surprise data-point for readers here.  However, it is good to see honest statements from corporate executives on what to expect with food inflation.

As noted by Kroger Chief Financial Officer Gary Millerchip in a call with financial media, we can expect to see even more rapid inflation in food prices overall in the next several months:

MSM – Cincinnati-based Kroger Co., which had $132 billion in sales last year, says inflation is running hotter than management previously anticipated and that expectations are now for prices to rise 2% to 3% over the second half of this year.

Kroger is “passing along higher cost to the customer where it makes sense to do so,” said CFO Gary Millerchip on the company’s second-quarter earnings call on Friday. (read more)

The reason for more inflation is not too difficult to understand.  Fresh foods show fast price increases immediately because they have almost no pre-existing inventory.  Fresh foods go from field to fork the fastest, and price increases show up immediately.  The same applies to restaurants.

However, processed foods and shelf stable foods have a deeper inventory, the turns on that inventory take longer, and as a consequence, it takes longer for the price increases to show up.  Millerchip is simply saying the total supply chain price increases are going to hit, and they are going to hit even harder than the last few months, as the new processed inventory carries a higher cost.

The skyrocketing prices at the grocery store are predictable based almost entirely on Joe Biden’s pro-Wall Street and Multinational Corporation policies.  Main Street is getting hammered, and the working class is suffering as a direct result.

Their specific accountability for these outcomes is why the Biden administration is trying to distract and blame COVID-19 for supply chain issues.  However, it is not COVID driving the prices, it’s Joe Biden policies that benefit multinationals.  {Go Deep}

Food products are fast-turn consumable goods, and the inflation in the food sector is jaw-dropping already.  However, fresh and processed foods turn at different inventory levels.

Obviously fresh foods spoil fastest (think produce, fish, meats and dairy), so they are replenished more quickly, and the thin supply chain (field to fork) passes along increased costs fast. Processed foods have a longer shelf life (boxed, canned, frozen, etc), and as a consequence, have a much larger inventory level in manufacturing, warehousing and retail storerooms/shelves.  Within processed foods, there is a lag between cost increase at origination and that cost hitting the stores.

The problem identified within the current ‘producer price index’, is that price increases in the raw material and intermediate material are building into the supply chain.  Keep in mind, the entire supply chain is dependent on energy costs and the fuel prices that impact transportation.

The retail consumer supply chain for manufactured and processed food products includes bulk storage to compensate for seasonality.  There are over 800 commercial and public warehouses in the continental 48 states that store frozen products (2020 data).  The previously processed food price increases are currently reflected on store shelves (already hurting).  However, the coming processed processed food price increases will be much, much higher.  We will see even higher prices on processed foods in the supermarket.

The same price increases happen for restaurants, albeit faster as they follow the similar supply chain to fresh foods.

Pro Tip – Buy your Thanksgiving and Christmas holiday shelf-stable items now (spices, condiments, flour, sugars, dried foods etc.) before the prices go up in the next few months.

Two Generations Agreeing in Song


Armstrong Economics Blog/Opinion Re-Posted Sep 1, 2021 by Martin Armstrong

Here we have the opposite generations of artists singing songs (click on image) about the same problem. I think this is fantastic for what you are listening to is showing that the Resistance is rising. I think we are all tired of the COVID nonsense. Debating if it will kill people in 2 to 3 years or it will track people with chips and nano-technology. I believe it will impact fertility for I have been informed already that girls in their 20s have been experiencing side effects impacting their menstrual cycle changes by staff with direct experience. With both Gates & the Rockefeller Foundations trying hard to reduce population, I do not find a single world of Gates as being trustworthy nor his puppets at the World Health Organization and our most dear Saint Anthony Fauci.

These two songs are a glimmer of hope that there are two distant generations singing about the same problem. I long the Monalisa Twins and how they point out that Gates, a college dropout, has elevated himself to our global health czar with absolutely no expertise in climate or health. Yet the press he has indeed bought, run to him for his guidance on these subjects.

Then there is even resistance showing up in Rap songs such as Tom MacDonald’s Brainwashed.

This is the real agenda – not COVID. That is just the tool to scare the hell out of people to surrender all their liberty to prepare for the Great Reset. We need more singers to come out for we now have one year to defeat these people.

Australia’s Finest Politician Setting New Standards for the World


Armstrong Economics Blog/Tyranny Re-Posted Sep 1, 2021 by Martin Armstrong

This compiled video (click on image above) sums up Australia’s FINEST Politician and how absolutely insane she has become in the face of this manipulated pandemic for political purposes. I think she must have watched too many Naxi films when growing up and was deeply inspired. This is who the Australian police are protecting. Well, when Australia falls, they can always plead they were just following orders as they did at Nuremberg. Australia – really going down under this time!

Categories:Tyranny

I Bought a Politician – Cheaper by the Dozen


Armstrong Economics Blog/Humor Re-Posted Sep 1, 2021 by Martin Armstrong