There has always been a general shaping and interpretation surrounding economic news, specifically as it relates to the impact of pricing on consumers and corporations. However, against the backdrop of supply side inflation, the financial gaslighting from the Wall Street Journal stands out at the top.
Without pretending, and looking directly at the Main Street reality, CTH has outlined inflation as a matter of monetary and energy policy. From that standpoint the timing and scale of price increases (inflation measured over time) was predictable. Our current status is an inflationary plateau, where prices remain high but stabilize for likely two quarters.
What the Wall Street Journal outlines as a “shopper rebellion against high prices” is complete hogwash. Notice in the construct of the narrative, the demand side (consumers) is identified as the cause of diminished revenue & profits for corporations. They continue pretending that inflation was not driven by energy costs.
(WSJ) – […] Many companies raised their prices substantially last year to offset higher fuel costs and higher prices for ingredients, parts and labor. As fuel prices have dropped and pandemic supply-chain snarls have eased, some of those costs have come down.
That is a good sign for the economy. It suggests that some inflation in the past year resulted from extreme supply-demand imbalances brought on by the pandemic and the war in Ukraine and which are now fading.
Notice the transparent lack of mentioning ‘energy policy’ as the inflation driver.
[…] The study, by economists at the Federal Reserve Bank of Kansas City, found that higher markups—the gap between what a firm charges and what it costs to produce an item—were a major driver of inflation in 2021.
They concluded that companies in some cases were raising prices in 2021 in anticipation of future cost pressures, rather than because of market power or outsize demand. Andrew Glover, a senior economist at the Federal Reserve Bank of Kansas City who was involved in the study, doesn’t expect prices to fall this year, he said, but he anticipates that the pace of increase will continue to slow.
Inflation is the rate of increase over time. We have experienced two years of massive price increases. Yes, the rate of those increases will moderate, this is the plateau, but the price will never drop. The current prices are a direct result of fixed energy policy.
[…] Unit sales of food and beverages fell 3% last year, but on a dollar basis they rose 10%. That showed consumers were willing to pay higher prices for groceries but bought fewer items.
[…] “People need to eat,” said Krishnakumar Davey, a president at IRI. Shoppers are nonetheless buying less when possible and, in many cases, buying less expensive versions of necessities such as toilet paper and laundry detergent. (read more)
Meanwhile the Fed is worried that wages will be forced to increase. Here is the real worry for the Wall Street Journal, “If consumers believe high prices will persist, they could seek bigger raises, and businesses, seeing higher labor costs, could continue raising prices.” Yes, workers, forward inflation is your fault.
Government policy drives up prices, but workers needing wage increases to pay for those higher prices… well, that is not acceptable to the government, comrade proles.
“shopper rebellion against high prices”
The only shopper rebellion I’ve noticed is hearing people talk about high prices while standing in line at the grocery store.
When grumblings turn to action we will truly see shopper rebellion.
Has anyone here after having to wait in a line to pay for a couple of items and the store being short on help ,get frustrated and just walk out?
Pray and help others
There’s a biz opportunity/solution somewhere in this.
My own take is that the profligate federal spending (to steal ‘federal’ funds to give to their friends, soros-type NGOs, foreign kickbacks, ‘diversity’, universities, etc in super massive amounts) requires enormous inflation to devalue the federal debt. This is the only, and predictable, way to prevent default. Especially when interest rates rise from the “free” zerointerest money giveaways to the fed-reserve-member banks. Lend to the banks at 0%, charge 25%+ on credit cards after usurylaw repeal, goofy autoloans with no declining balance interest reduction, etc.
What is interesting is the financial media (including the WSJ) generating volatility by alternately announcing gloom-and-doom’, and then “get on the bandwagon before it is too late” expert opinions, every few days. Of course company values do not change very much every few days. But investment houses, funds, with fast market access require high volatility to maximize their trading and leveraging advantage.
The Glass-Steagall separation of banks and ‘investment houses’ needs to be restored. Banks were a political and economic force for stability and price constancy. ‘Investment houses’ are a force for high leverage gambling. Clinton killed off Glass-Steagall with the falsely named “Financial Services Modernization Act”, killing off a major force for financial stability.
As an aside, whenever the democrats label an “Act”, the true purpose of the “Act” is the opposite of the title of the Act. A current example is the recent dem “Inflation Reduction Act of 2022” while spending $Trillions we don’t have and need to borrow. The borrowing will require inflation so the borrowed funds can be paid back (if ever?) with much cheaper dollars. Its true name is “The Inflation Sustainment Act to permit spending of donors, buddies and bribepayers”.
You can blame Clinton, but it was really Phil Gramm behind this.
One thing they will never run out of is “lies”.
“…buying less expensive versions…”
At the grocery yesterday, I had a coupon for $1 off the brand of eggs I prefer. Normally, they’ve been about $4.99/doz, so getting them for $3.99 looked sweet.
Oops! They are out of stock, but here’s another just as good alternative for $6.99.
Sorry, the coupon doesn’t apply to substitutes. We appreciate your business.
Reported government “data” no longer reflects reality, but is suffering from the same political manipulation that surrounded all things COVID. Be it interest rates, economic activity, inflation, climate or unemployment the government “data sources” are manipulating the numbers to backup whichever political position they are directed to support.
Trust nothing…prepare for the worst scenario you can imagine.
Remember the ALAMO
my recollection is that ever since the Reagan admin, reported government “data” (i.e., deep state bureaucrats) have never reflected reality. the reported government “data” has always reflected only the position they are directed by liberals and Dem operatives to support. for example, no matter whether conservatives or liberals have the majority in the House, Senate and WH, the GAO never takes into account the revenue increases that necessarily occur when tax rates are reduced. It’s always a “zero sum” game – i.e., for every % reduction in tax rates, the GAO always calculates an equal % reduction in tax revenue.
It’s well past time to eliminate the Federal Reserve and the Bank for International Settlements. These criminal organizations are the driving force behind the financial messes we all have to deal with.
Watch unit sales … that is the rebellion.
1776 Part II – Atlas is Shrugging
“the cure to high prices is high prices”
Having just completed my second consecutive seasonal UPS delivery position, I can confirm that in rural Minnesota retail sales were down this year…wayyyy down… although I delivered to a few new places this season, homes that last year got 3, or 4, or 5 deliveries a week (yes, a week) were down to 1 or 2 a week… sometimes less
The Founding Fathers told us everything that could kill our Union.
And they were so right.
Cut off the lifeblood of our nation, oil and coal, and you shut us down, Bite-me.
Gas prices went up after Christmas, diesel is in jeopardy and we’re worried about the price it takes to get eggs and other food to the grocery store.
Dear DC: FIGURE IT OUT!!!
And meanwhile you climb the tax bracket ladder with no increase in wealth or purchasing power.
We will see two periods of retail increase going forward.
One in August as kids get ready for school and Xmas.
Everything else parents will cut but for their kids.
Outstanding photo! Thanks, Sundance.