The New York Federal Reserve survey reflects the obvious. Consumers see staple food and energy price increases far outpacing any wage gains, and the outlook moving forward does not show signs of improvement.
The distance between the inflation line and the wage line is the intensity of the hurricane coming our way.
We are in this very weird place where the politically motivated Fed cannot stop purchasing debt created by legislative spending. At the same time, the political Fed is going to have to raise interest rates or we will enter an impossible spiral of policy caused inflation. There are three options: (1) stop buying debt; (2) increase interest rates; or (3) deploy some COVID mechanism to shut down people and hit the demand side.
Considering that Omicron didn’t work, and further panic pushing does not seem politically viable, that only leaves the two options of the Fed stops buying debt, and/or the Fed raises interest rates. Now, considering that these same political ideologues will not stop pushing the Build Back Better legislative agenda, that means the Fed cannot stop buying debt. That leaves one option remaining, increase interest rates.
Dec 13 (Reuters) – U.S. consumers’ short-term inflation expectations pushed higher in November and expectations for future earnings growth dropped, suggesting they anticipate price increases will outpace wage gains at an even faster rate in the near term, according to a survey released on Monday by the New York Federal Reserve.
Prices for food and other goods are rising at the fastest pace since 1982, according to data released by the Labor Department last week, posing political challenges for President Joe Biden’s administration and cementing expectations the Fed will raise interest rates next year. (read more)
War?
Would they stoop?
That was a rhetorical question, right?
Save the Ukraine!
/sarc
Well, it’d only be the 193rd time they do so.
Throw a couple tomahawks at a baby milk factory somewhere?
You forgot the sarc tag?
I wish.
Trying to recall who said when issues at home are bad, focus on something foreign. When foreign affairs are bad, focus on issues at home.
Yeah, Ukraine is likely calling.
Several thousand cases of vodka and a sweet gas deal for Hunter appear to be the only national security issues to go to war for Ukraine. If we do, good old Vlad will turn the gas off on Europe.
Against them?
Ukrainian Inflation Stopper
I told the wife just yesterday, they darn sure would start something. It would boost Biden’s numbers as well (who doesn’t love a war president ?)
america, we re done sending our kids to die for nothing
“who doesn’t love a war president?”
Bush set back that strategy significantly.
More folks than ever, would see optional military intervention for the bacon-saving opportunism, it is.
I have been thinking that FJB will wag the Dog for almost two months now.
Our woke generals would get our asses kicked inside of two weeks. Xiden really going to think Afghanistan part 2 is the answer to any of the uniparty woes?
Heck, as awful as this administration and every recent past administration (except for the Trump administration) has been to our troops, what makes anyone think there wouldn’t just be a outbreak of the flu (of the fragging the policy type).
Called up to go to the Ukraine? Oops, the whole company just came down with Omicron and had to isolate for 14 days. So sorry – can’t risk public health and safety! Maybe go find some Vindmans to fight?
There’s some pretty great music from 1976-1980. Maybe rock n roll will make a comeback while interest rates return to Carter era misery levels!!! NYC already looks today like it did back then when Kojak was filming. What once sucked is new again! Or something like that.
Waiting for Funk to return. We’re near the fifty year cycle. 😉
Tear the roof off the sucka! (George Clinton)
Hard times make strong men – and strong men make great music!
I hope you don’t mind if I borrow that phrase!
Wow!! Not sure whether to laugh or cry…
Mr. Gorka’s video further down on the same tweet- This is for the greater good…spot on.
That was one of the best I’ve seen.
AND that is exactly what the occupant’s expert economists are indeed telling the citizens of this country and around the world daily.
We are now living in the 80’s Carter years….ohhhhh, I just can’t wait for those grand days of gas-rationing, depending on the beginning letter of your last name…it was such fun!
Trips to the grocery store were like playing a TV game show of “how much does sugar and coffee cost today?”
Remember? Fun times! /sarc
What, they were making fun of a Democrat? Quick call the 4 th branch of government.
Keith Richards can go on tour.
Stop buying debt and turn off that idiotic “Build Back Dumber” garbage.
Raise rates.
Stop pretending the FauCHI 19 is life threatening.
We can all dream…
The fed does not have a choice, they have to take the debt, one way or the other.
We have to consider another choice for the FED, BIS, World Bank, major western economies and other stake holders(Banks) to make …. a false flag cyber attack on the global financial system.
In fact all those parties recently conducted a 911 style drill to ‘simulate’ just such an attack. We all know they can’t unwind the balance sheet AND raise rates. I don’t care what Goldman Sachs predicts, that ain’t gonna happin’.
A trusted source of financial information and analysis makes the same point.
Maneco64. About 13 min
If interest rates rise, stocks will plummet.
The stock market is inflated because its the only place people can put their money that will generate additional value.
If money market accounts, CDs, etc. become viable again, look out.
If interest rates climb, and by all economic logic they should, stocks may dive. Where would you put your money (401(k))? Economic theory says that if I loan you $100 today for one year, I would expect to earn some extra based on the fact that I gave up my money for one year. A small percentage just for the inconvenience of not having my money for a year. But the same theory says that if inflation is 6.8% now, I would have to charge 6.8% just to break even a year from now. Interest rates are being kept artificially low to prop up the DEMs. They should be around 8%. It will be interesting to see what happens. I am old enough to remember that under Jimmy Carter interest rates for homes reached 21%. Who could afford to buy a house? Nobody. So the housing market will tank. Automobiles that are so expensive now that we finance for 6 years. Imagine buying a $40,000 car that you finance for 6 years at 20% . Your first year’s interest would be approximately $8,000. Your principal would have to be aboiut $6,000, meaning your first years payment would have to be about $14,ooo or nearly $1200 per month. You would have to make huge monthly payments to cover principal and interest. Down goes the car market. RECESSION. The DEMs would blame Covid or Trump, but they did this on their own.
Yeah, but you are forgetting that under Build Back Better you will not need a car!
Or you won’t be able to afford a car much less gas.
Bought a new home in 1981. The price was $99,000. With our down payment and a 14% mortgage, it still took a big hunk out of my paycheck. Younger folks today have no idea what they may be in for if this lunacy isn’t stopped.
My first mortgage had a 17% interest rate. I bought down 6% to qualify at 11%.
I remember those times well. The young ones haven’t seen anything close to that.
My first one was 11.75% for a 20 year mortgage. My mother was in the mortgage business and said, “Take it!” There’s no way I could afford that interest rate with today’s house prices.
I laughed when they said that the recession of 2007 -2008 (and extended forever with 0bama) was the worst one since the Great Depression. We saw double digit interest rates, unemployment rates, and inflation rates with Georgia Jimmy.
Now I sit here retired and the house I bought back in 2004 is paid off, the car & truck are paid off, and we’re fairly well-off compared to most. It was done by delayed gratification and planning, something the younger generations don’t understand.
Ahh yes, I remember buying my first home in 1987. We got a deal with an interest rate at 10% with 20% down. Can you imagine those in their 20-40 year range having to deal with mortgage rates like that?
I remember those days. I got married in 1976 and we never thought we could buy a home what with college debt to pay down and just starting out. I worked for a mortgage company and the rates in Calif. were 22-24% for a while.
and home prices all starting at 200k+ unless you buy in a crap hole area and a house needing work.
This is all planned.
And, just think, there are people around you who think this is good.
When the interest rates are low, an example of a $2000.00 monthly mortgage payment
could for an example purchase a $500,000.00 home. When the interest rates
go up, what would a $2000.00 monthly mortgage payment purchase?
The prices of homes will go down significantly.
Just remember, house prices are all calibrated to ability to pay. If interest rate goes down, house price goes up to keep payment at max you can afford. The coming crash in house prices is going to freak a bunch of people out. Pull equity our at 3% now.
200k+? More like 400k+ in the northeast, and those are the fixer uppers.
The first rises would probably be 0.25-.50, hardly devastating.
And yes , even that pitiful amount would panic the stock market. Before honest money was executed point blank and increases started appearing in that miniscule range, the SM always had a bad case of the vapours for about two days before resuming its climb.
It was the one thing Mr Trump kept wanting…O% interest rates. And every time he said that, my heart sank. Because after years of being prudent ourselves and stupidly thinking we would at least get a modest return on our savings, I predicted we’d end up here.
Oh and btw, there is actually a third mandate for the Fed which no one ever mentions, and one which has been liquid papered out. To maintain moderate interest rates over the medium term.
For us, no matter what, we will not enter that casino called the Stock Market. We’d rather make our economies by cutting our cloth to our circumstances…and hunker down.
Bought my first house in 1980, it took us 10 years of making payments and living for the home value to exceed what we owed so we could move up to a better one. The home market crashed a few months after we bought, the loan was based on inflated prices. What a lesson to learn when just starting out.
Everyone is forgetting – the retail prices will drop as interest rates increase (for homes AND autos). There are only so many dollars available to make the monthly stroke. The recent low interest rates are what generated the high demand to own housing – CHEAP MONEY jacked up the prices, folks. I know – I S O L D the condo while the selling was good and money was cheap. Make sure you buy bank stocks to get in on the profits the banks will rake in as interest rates rise – and rise they will.
That economic disaster is what Ronald Reagan elected. And when his policies dramatically decreased inflation and created jobs he was re-elected in a landslide. But that was before Democrats realized they could rig vote tabulations.
And often times (all the time?) THAT is what causes an investment bubble.
In China, the only viable place to invest $, is in housing, so that the demand for housing, AS AN INVESTMENT, has far outstrip the demand for housing, AS A PLACE TO LIVE.
Hence, the “Ghost cities”, and a lotvof vacant property. And now its collapsing.
So yeah, raising interest rates, enough to do any good, WOULD crash the overvalued, overinflated stock market, decimating retirement accounts amongst other things.
And, its gonna have to get REALLY bad, before they admit their monetary theory is crap, and until they do that, they will not let up on BBB.
In fact, they will argue that BBB is “the answer” to our economic problems, and blame the economy on those resisting BBB.
WE are SCREWED. Will we actually see food riots? Wouldn’t surprise me.
Five Finger discount.
Is that like a low key smash and grab?
The answer is YES. And that is just the beginning.
The housing market will be hit as well as loan rates rise.
Eric:
Michael Lewis’s great book “The Big Short” discusses the sad truth that money is pouring into the American stock market because there is nowhere else to go.
Dentists from Dusseldorf bought those awful “securities” based on sub-prime mortgages until 2008 because there were no other investment options in Europe. Europeans no longer have children, so there is now almost no growth. Young people buy houses, young people start businesses. All gone.
When this cliff edge is reached..then what?
The anarchists have the last laugh, I guess.
And the loopring, peer-to-peer, blockchain equities market is coming. Think what that will do when there is no longer float for hanky-panky!
I thought that they excluded food and energy, from the consumer price index?
Another accounting gimmick.
The Next Catalyst For Inflation: Significant And Persistent Increases In Labor Costs
A few months ago, large companies, such as Walmart, Costco, and Amazon, announced pay increases and significant pay incentives for workers to stay with the firm in 2022. At those announcements, the jobless rate was around 5%; there is even more pressure now, with the jobless rate approaching 4%. The most severe pressure is likely to be felt in smaller companies (100 or fewer workers) since losing a handful of workers will force others to work longer hours, demanding more pay in the process.
Average hourly earnings have increased 5.9% in the past year but still, trail inflation by 100 basis points. Workers want more. Wage increases have not exceeded consumer price inflation for an extended period since the late 1990s. But, the balance of power between labor and employers has shifted, and faster wage increases are in store for 2022.
This article is up on ZH.
Add in the effect of the mandates,..
Trump would have run up the same labor crush with rising wages.
It’s a death spiral upwards starting at the bottom. Lower paid workers’ wages raised. Next tier up wants a raise to keep the same gap, and so on.
Rising wage bills do not stop with baseline worker.
The great reset requires a new economic system. They are intentionally collapsing this one.
Part of the plan, step 1 actually.
There’s no reset. It’s just your disposable income redirected to taxes or inflation which is another word for repaying China for four years of Trump kicking chicom butt.
The purpose of the vax mandate is to alter your DNA so that humans grow body hair. You are going to need body hair to stay warm and energy to wash clothes will be too expensive. Let alone heat your house.
bret, they made a slight mistake in the DNA code sequence so all the extra hairs growing will be pubes. So no staying warm but such an additional thrill for FJB.
If interest rates go up on the massive and growing national debt, interest payments on the debt will cause the FED to print more money to make the debt payments. This cycle will continue, higher and higher debt payments, more and more FED printing. This has been warned about for some time, the point of no return is approaching. I believe the totalitarian forces want this to collapse the economy and more specifically destroy the middle class.
“You will own nothing and be happy.” – Blackrock, a public-private corporation that receives money directly from the fed. In other words, they are planning the total subversion of the moral system. Our very existence requires a moral system where values are produced through virtuous acts. We exchange values for values, and such a system requires great virtue. Take away all the values and there will be no virtue. We will be reduced to an animalistic system.
Sadly we have already reached the point of no return regarding the unpayable debt. I was optimistic when we were looking at a second Trump term. I believe Trump had a plan to renegotiate the debt with the central banksters , reback our currency with real assets and take back control of our currency. The Central Banksters wanted nothing to do with that and helped steal the 2020 elections.
Remember, the ONLY debt that “counts” is external debt. Debt we owe ourselves is a chimera. It’s like borrowing money you don’t have from yourself to fund your retirement. When 65 comes along, you have a pile of checks, no money in the bank and who is really owed? Now, money you owe the bank for your mortgage? THAT is owed money.
At the same time, they are so hesitant to raise rates because people will save more money. Saving money means you’re likely to be more self-sufficient. Lefty’s hate it when people are self-sufficient, as they are much harder to control.
Raising interest rates will have little to no de-inflationary benefits as the main st economy has already been decimated.
If the Federal Reserve did raise interest rates the value of the trillions of dollars in US Treasury Bonds the Federal Reserve purchased would plummet and they would lose billions. Does anybody seriously think that Yellen and the people who own the Federal Reserve want to lose that kind of money to prop up Biden?
Its time to fire the Fed. time to print our own non fiat currency, backed by real assets. Give the Fed and all the other Central Banksters the finger and offer them pennies on the dollar for money owed. We would have the only non-fiat currency in the world and everyone would eventually (after the dust clears) use the US dollar for all transaction. President Trump was setting us up for this scenario in his second term.
Why negotiate with thieves. Give them something for something they stole. The FED is a private bank, who owns it, who owns all the banks worldwide. Take off the blinders.
I do.
That’s one!
With the magnitude of accumulated short term debt, raising interest rates would mean having to devote a far greater amount of the Federal budget to debt servicing. This leaves less for everything else. It’s the financially correct thing to do but politically toxic.
On the other hand, the left loves wage and price controls. So does the GOP. Nixon implemented them and the GOP supported it. All part of the 5 year plan.
We’ll know if you start hearing a media narrative that highlights the negative impact of high interest rates but says nothing about spending reductions.
Already happening in Comrade Gavin’s socialist paradise:
“California will impose a statewide mask mandate in all indoor public spaces as COVID-19 case rates soar, state Secretary of Health and Human Services Mark Ghaly said on Monday, as state officials take precautions against a surge in cases due to the Omicron variant of the virus. In addition to requiring masks, the state is tightening its testing requirements for unvaccinated people who want to attend large events such as music festivals and professional ball games where more than 1,000 people are in attendance.”
https://www.reuters.com/world/us/california-re-institute-statewide-mask-mandate-amid-rise-covid-cases-2021-12-13/
For them, one place where tightening requirements might make sense from a scientific perspective is the border, given the unknown disease status of those seeking to cross over. Anyone think they’ll be tightening requirements there anytime soon?
I wonder if they are working on collapsing the US Dollar to establish a new electronic currency. Perhaps even global, like the basket of currencies. The great reset, one world order.
It’s all intentional. Fed is not losing control. Fed is in control.
You have it. They ran practice exercises for “a pandemic” before launching and/or exploiting covid-19. This year the same people are practicing for a collapse of private banking under hacking attack [Russia Russia with a side order of Ukraine conflict?]. The projected outcome is that all accounts are transferred to the Fed or the Treasury to make them more secure. “They” is the World Economic Forum and companies, agencies and oligarchs cooperating with them.
I agree, and what do you think of this suggestion of a false flag cyber attack on the world financial system to avoid raising rates and kick off an electronic currency. I want real money but they don’t.
About 14 min.
What are they going to do about Bitcoin and the block chain? They would have to shut down the whole internet and start from scratch, wouldn’t they?
Also, countries have been hoarding gold for the last eight years or more. China has been gearing up for a gold backed yuan. Russia, Poland, Germany, all going in big on gold, all storing it in their own countries.
Russia already had a taste of the “Great Reset” when Soros crashed the ruble. Is Putin really going to help on round 2?
Those diverging lines look like the wall street and main street divergence you describe as one goes north from florida.
There are things that can be done to control inflation, theoretically. However, inflation is one of these economic things that, once started, often does not respond as predicted to the things that are meant to control it. Start them too late or with the wrong intensity and inflation zooms out of control. The problem is that the right time or intensity is unknown. We may very well be past the time to make corrections. Even if we still have time, doing the wrong thing in response will likely make inflation worse.
The arrogance of TPTB is such that they think they are smart enough to rope this calf and bring it under control at exactly the time they want. They are not. They think they are smart enough to go into a great reset and they can control everything on the other side without the world going into anarchy. They are not. They are playing a dangerous game for which they are not prepared nor smart enough to play.
Get ready. This is going to be a terrible ride. Think economic tornadoes and just as controllable.
Anyone who enjoys economics should look at the Great Recession/more properly a depression of 1920/21. That’s where we need to go, but that will likely not happen for obvious reasons.
Seems to mevits STARTS with this fantasy Monetary policy, that since Gov creates money, they can create and spend as much as they want, without any downside.
(What do you mean, overdrawn?!! I STILL have checks left in my checkbook!)
Firstly, they have to admit, TO THEMSELVES, and then to everybody else, that thiscis WRONG, and THAT may well be the biggest impediment to any change in behavior, as these people are constitutionally unable to admit to themselves or anyone else, that they are WRONG.
Witness Bidens “succesful withdrawal from Afghanistan” which he is STILL defending, or this Vax crises they are ignoring.
Beyond that, raising interest rates more than a quarter, like enough to make a difference, is highly problematic.
And, significantly reducing quantitative easing, is like the check kiter stopping, once they stop, it all comes crashing down.
They have painted themselves into a corner, and unfortunately WE are all in that corner WITH them.
“There ARE no “good” options, so we are down to picking the least bad option.”
“So, this is the “best bad option” you have?”
“Afraid so”
Probably only ONE person on the planet who could safely steer the ship to shore, IF he had the authority and responsibility of Captain.
Currently staying at Mar a Lago,…
They think they have us cornered, and maybe they do. They have forgotten that the most dangerous time in the pursuit of ones prey is when that prey realizes that they are cornered and their option numbers have been reduced to exactly one.
If you’re the same person as on GP, sending healing vibes to you and your community!
GODSPEED^
That is me. Thanks.
They don’t care! 60% jabbed, they will try to run out the clock.
I’d be happy with only 6%….
but how much is gas, food, and housing really up….
I’m thinking all my prices are up 25-50%.
Yeah I don’t entirely grasp the 6%, even if it skips out on food & fuel. Some things are still steady, like basic clothing items and small home goods, but other stuff—-whew lad, building supplies springs to mind. Double, triple, quadruple the price, depending on the item. That can’t average out to 6% no matter how common core the math.
When a nation’s history is not taught in public schools, citizens will become students and be taught in real time. We treepers survived Carter and will survive the currant
occupant.
Your first sentence is perfectly and absolutely precise and right on the mark. It is no less than a direct call to action for all of us. Buckwheat University’s School for the Preservation of Liberty and Freedom (lol). Too long a name?
The Fed is trapped as I’ve said for quite some time. This is a controlled destruction and why we are all seeing this playing out. If they can convince the masses to accept a living wage, then that is their excuse for a default on the debt. I’ve said it many times on here, politicians never, ever, have any intentions of paying off the debt, EVER! Keynesian economics is a complete failure. So is MMT or whatever else brainless academics come up with.
Real world experience can never be taught and these 20-30 something academic idiots are the worst kind.
How does one prepare for inflation?
Spend all your cash? Save all you cash?
Pay of all credit cards? Or run up credit cards since money will be worth less in the future?
Stock up on food?
I am wondering the same. Spent many years to be debt free but now our cash/ credit/money is looking more and more useless. What to even spend it on??
I have some foreign currency, a gamble of course, but if the US dollar collapses or lose value, I’m not sure having dollars/cash whatever amount, would be a good idea.
If something loses value having lot’s of it you are just losing a lot of value.
Gold? I’m not sure, unless somebody is accepting Gold to be used as purchase currency at the grocery store. But who? Will the Gold shops give you cash for it when you and millions of other people show up to sell it? I don’t know.
How can you tell is real Gold at the cash register at Walmart? I’m not sure is practical. Unless you want to park your money and leave it until the situation reverses itself. Then Gold may be a good idea or Silver. (Real Silver not paper promises)
I like foreign currency, because is liquid. You can hang to it and when ready to shop, exchange for the latest value of the Dollar. So It keeps increasing in value against the losing Dollar and you can use it when you need it.
Yeah… but what currency? Euro? Japanese Yen? Chinese Renmimbi ?( I have some Chinese money, in cash and other foreign currencies, Not much but, some, let over money from trips abroad)
Having a bank account in another country is a good idea in times like these. If you have family abroad, I would look into it. Having a savings account, In Japan for example and an International debit card. Winner!
Grocery shopping time, swipe that sucker and you are good to go. Cheap groceries.
In your hand gold and silver. Once it implodes you can either flee to a safe country or start a bank. Many families fled with gold to US from Venuzuala.
Cryptocurrency will likely be the bridge between fiat currencies and real money. That or except their new electronic currency when the music stops …?
Good questions . We need a daily thread dedicated to how people are preparing.
Borrow as much money as you can – refinance your car and house – at these low rates.
You can pretty safely earn inflation+ returns in the stock market. Re-invest the extra income; resist the temptation to spend it.
That’s my strategy.
Although this makes mathematical sense, there is significant risk if for some reason one lost their income source.
The purchase of tangible assets is one hedge against high inflation. However, those assets are typically not liquid and future value may not be predictable.
This. In every depression/recession the value of hard assets also decreases. My friend’s family bought a tiny island off the coast of South Carolina in the Depression for $50. The family sold it in the 1990s for over $15M.
Additionally anything that has taxes levied on it or needs maintenance can be an albatross around your neck, re building supplies to maintain a house or property taxes.
Start off with no debt. If you can live cheaply, then you’re better off than 90% of the population
Purchase assets now rather than later (last year would have been better). Do not just purchase assets to convert cash. That’s called shopping.
Stock up on food – primarily in case of emergencies, but additionally as an inflation hedge. Do this a little at a time.
YouTube had lots of prepper channels. Start with Alaska Prepper and perhaps City Prepping.
When I lived through hyperinflation abroad, the US dollar was it! At that time, Dollar was used preserve wealth at the same time have liquidity. But now… I guess find a foreign stable currency?
Liquidity is key.
Another thing is to stock up on necessities. Stuff “increases its values” as the currency devalues.
Debt is good, savings are bad. Debt will shrink and so will savings.
Real Estate I’m not sure. Property taxes increase and then what? Well ok, blackrock will buy it from you and rent it back… lol.
Do not max out the mortgage on your home!!! Bad strategy. When the value of your home drops below your loan amount, the bank can take your house. Doesnt matter if you are making mortgage payments or not.
In fact I would go so far as to say now is the time to pay off your mortgage. When home values tank (below your loan amount), anyone who cannot do just that will find thier home bought by BlackRock.
If this were the case, people wouldn’t be continually getting screwed by having to pay PMI. That’s ostensibly what it’s there for.
PMI protects the lender, not you.
This is not correct. There is no such clause in a standard mortgage agreement.
This is definitely the time to stop renting and get into a low rate fixed mortgage within your means. Preferably in a red state and in a rural area, with some land where you can have a garden and some chickens.
I’ve paid attention to what has gone down in Venezuela. Conclusion: No larder is deep enough. You can have a years food supply prepped, but sooner or later you are going to need to resupply. Best to do that in a trusted community with the ability to grow your own and barter.
If you are underwater on your mortgage, yes the bank can foreclose. You agree to a certain loan-to-value ratio, if your house value drops too much you may not be able to maintain that ratio. Ask someone who was flipping houses in the 1990s, this is exact scenario happened to a lot of people.
Imagine that China will no longer export finished goods in exchange for US dollars because the Treasury bonds they have been purchasing are a losing proposition.
Think of what you will need to maintain your living standards.
What would you do if the bathroom sink faucet began to leak and there were no readily available replacement parts because imports are scarce and domestic production has not been scaled up to meet demand?
Can you stay warm if the igniter fails in your furnace but the repair shop has no reserve stock because they rely on just-in-time inventory deliveries which have been disrupted by fuel rationing?
Can you prepare a meal if there are rolling brown outs and electricity delivery becomes intermittent?
Thinking through and planning out scarcity scenarios will help you to prepare much better than would sinking your assets into hard money or firearms.
Sure, you can buy a half-bag of “junk” silver or a pistol-caliber carbine but don’t get caught up in apocalyptic scenarios. Think about day-to-day needs and “put a little by” each week.
Hyperinflation runs its course quickly. If you can cope with 6-8 weeks of panic and uncertainty, you should be able to emerge from the crisis unscathed.
There seems to be a correlation between Bidens IQ and the cost of living. As Biden’s IQ continues to deflate, consumer prices continue to inflate.
This is SOP for Democrat Administrations…Drive up the debt, print more money for social programs…The kicker is that they still get elected…I find Americans have a short memory span…& I know there are illegalities in our election system, but that any of these idiots get elected in red states at all is beyond me…I’m old and have been around awhile and it never ceases to amaze me how some of these idiots keep getting elected to office.
“They still get elected.”
Lying and cheating. The big cities are easiest for cheating because the bigger populations can hide the fudged numbers. The only reason Florida has DeSantis is because the cheating was halted.
California just issued another mask mandate.
Some of the governors seem to be in a private pageant for who can be the biggest tyrant over this terrifying Omicron panic which doesn’t exist outside the fake media.
Right there, the total ignorance of leftist governors becomes loud and clear. Let’s mandate total bs (masks, business capacity etc) but fire those, due to bigger bs vax mandates, you need to enforce your other communist rules. Makes perfect sense. Of course as the number of compliant sheep diminishes, there’s no one left to carry out the orders.
Free states getting freer. Tyrannical states doubling down.
How much of an idiot do you have to be to stay in LA, NYC, or Killadelphia, if you have the choice, even at some real cost, to move?
it has to be covid because that is the only area the progs/biden are +50% in. the other options are for the GOPe when they in the WH.
Now is probably not a good time to move houses, but they are building 150-200 units (all rentals!) right next to us and we are starting to feel suffocated. We want to move to a smaller town, but with such an uncertain future as far as the coming financial storm. Plus we have no idea where the interest rates will be next year and we just refinanced at 3.1%. We also need a car but it would be insane to buy now (prices are double!), especially if there is a “chance” prices will stabilize next year and this is simply all due to supplies being stymied. Sometimes I just want to stay put, but like I said our small (ish) town is becoming crowded. If Trump were still in office, we would feel more free and secure making these big financial decisions. I’m sure we’re not alone.
Retired Magistrate here: If it is Section 8 housing get out while you can. Don’t know where you live but if the real estate market is still viable at all, now would be the time to get out. Things are going to get worse. However, why not live in a place where you feel comfortable and not suffocated.
With regard to your car if you have a car that runs get it fixed. If you don’t have a car at all check with friends and relatives and see if anyone has a car they want to get rid of in the near future. Wish I could be more hopeful that prices will stabilize next year, but I don’t think they will. This is not poor management of the economy; this is being done on purpose to destroy the middle class. Don’t think the government is inept; this government knows exactly what it is doing and are succeeding quite well.
No one (except GOD) knows that the future holds. However, it is up to you to live your best life now.
Thank you, I feel like this is another confirmation to move. We live in Az and the market is hot.
If they are upscale rentals, it may not be a problem. I just sold my rental property and my renters could not afford the new construction. Those units are being built with expensive materials and labor and it will take a fairly well-heeled renter to afford it. A lot young professionals that in the past would have bought are renting so they can be flexible when they are uprooted and need to move. Our rental property was an older house converted to apartments and rented well below new rentals. In fact, new rentals cost more monthly than a mortgage on entry level housing at today’s interest rates. They only become lower when insurance, taxes and maintenance are added, but a lot of people do not considered those.
As for selling and moving, it all depends on where you live. A friend recently sold his house in a working class neighborhood to buy one in a small town. It sold in two days and he made money after only having it for about two years. Whatever you do, lock in your interest. If you have a variable rate, try to lock in a fixed rate. Jobs in small towns usually do not pay as much but it is cheaper to live. It is often close to a wash. Just remember the 1st rule of wing walking: Don’t let go of where you are until you grab on to where you are going.
As for the car, ask your dealer about a one or two year lease. They will say they can not do that, but they can write a lease for any term they want. In a year, if prices have not stabilized, you can renew the lease. If they have dropped, convert to a purchase. If the economy has crashed and you need to bail out on the car, you turn in the lease and are not stuck with a car payment. Down side is that a lease is usually more expensive in the long run. It just seems cheaper because you are not paying for the whole car, you are only buying the depreciation.
I’m sorry for the long answer.
No, no, long answers are informative.👍
More education here than
in any institute of higher “learning”….cheaper as well!
Higher interest rates on $30 trillion of public debt means the FED prints more money. The Treasury has to issue more bonds and the FED has to buy them with digitally created dollars. The budget deficit increases further with new entitlements. So more bonds are issued and therefore more FED printing. The can has finally been kicked to the end of the road.
The Fed don’t need to raise interest rates – they JUST NEED TO STOP BUYING DEBT.
They are buying over $100 BILLION a month of Debt. If they turned that spigot off the sharemarket would crash (return to normal levels) and the crash in prices would destroy Inflation.
There would be no Inflation if the Fed turned off the monetary spigot.
It’s that simple – they don’t even need to raise interest rates – just turn off the “Ctrl-P” printing and say they’re going to raise interest rates – that’ll be far and away enough to make this whole Inflation episode “transitory”.
There is simply too much debt in the US Economy for Inflation to take off without the Fed printing money.
” There would be no Inflation if the Fed turned off the monetary spigot.”
This is true but the FED always prints tons of money especially in economic crisis (like 2008) but that has rarely caused this kind of inflation so quickly.
Mr. Titus explains the monetary mechanism the FED is using to purposefully cause this exponential increase in inflation in a bid to inflate the debt away. Most people think inflation is increasing prices but that is an effect of increasing the monetary supply of bank money.
Very worth the watch as this is the first and only time the FED has done this since it’s inception in 1913.
Mr. Titus Best Evidence channel youtube 30 min
“The Fed don’t need to raise interest rates – they JUST NEED TO STOP BUYING DEBT.”
Drunkards don’t need to enroll in AA, they just need to keep the cap on the bottle.
But drunks got that way because they lack self-control and the Fed buys debt because Congress has no fiscal restraint.
Congress could pass a law freezing the Fed’s balance sheet but then how would they buy votes?
Alas, Jimmy Carter is now looking good.
This is what you get with rabid Keynesians at the controls.
Any chance there’s another Milton Friedman out there?
I’ve had this same thought. One of my old Biz professors used to call him Uncle Milton lol. Also Betsy I’ve read a lot of your posts here and am fascinated by Wales. I went to Oxford for a summer in 1990 for a summer Shakespeare study, was privileged to travel a good bit in England and spent a week in Edinburgh at the end of the trip. I’ve been an avid Anglophile all my life. I never made it to Wales though (had a friend when I lived in Chicago in the mid-90s who was Welsh, glorious human, avid Rugby player). Skip forward to this year and I was lucky enough to see a series called Hinterland recently and it was set & produced in Wales (UK murder/detective shows are my absolute favorites). The scenery, the characters and the music were absolutely spellbinding. I still hope to visit one day, but given current events I don’t know if I will. You are exponentially blessed to have had that time there when you did.
Oh, PP, I was. We often talk about after we left everything changed, and not for the better. Even our beautiful village has changed out of all recognition. And it grieves us. So we fully recognize the truth of what you posted. Blessed we were, and we have the glorious memories of it.
I am so sorry you were so close and yet did not have the chance to cross the border. You would have fallen in love. Peaceful, lovely people who, thank goodness, did not see me as an interloper. I loved them all and miss them more than I can tell you.
Hinterland was good. I agree. It is hard to find English speaking Welsh productions. Another wonderful one is Framed, which is about the moving of art works from London to a Welsh mining town, where during WWII Churchill did the same. It is utterly delightful, a happy film.
And The Englishman Who Went up a Hill but Came Down A Mountain…Hugh Grant. A sweet true movie. I can suggest both. A trip down memory lane for me.
Thank you so much for the comment. It has given me so much pleasure to revisit the place my heart never left. If you find yourself ever able into go, I can give you some good suggestions on where to go and what to see. And I’d be pleased to do so! Cheers☺
Also suggest you subscribe to Britbox and Acorn, both relatively inexpensive. It’s all we watch now. A cornucopia of the types of shows you’d enjoy. We’ve just finished the sixth season of Shetland. Outstanding is a word that doesn’t do it justice. Plus all the Inspector Morse series, and Lewis…now you’ve gotten me started.😊
I have been an avid viewer of both Acorn and Britbox for years.
They are all I watch.
Love all the shows you mentioned as well as Midsommer Murders.
Cheers!
Every one watched from start to finish multiple times. Favorite? Foyle’s War. Michael Kitchen’s acting just superb.
Loved Foyle’s War.
I have all of my favorites on DVD.
Huge collection.
Took forever to find all the dvds of Morse.
The last thing the FED wants is higher interest rates, the interest payments on the debt will blow up the budget deficit. I think the FED will continue to print money and buy US debt. Not because it’s smart or the right think to do. The reality is they have no alternative.
I think the only way out to get rid of this monstrous debt is a total currency collapse. Like Argentina, Brazil, Germany… That will wipe out all debt but in our case with the global reserve currency, this will be catastrophic.
Many countries hold US dollars, trades are done in US dollars, so, they better have a plan.
Electronic Global Currency?
Yes, the inflation tax the Commie Democrats never want to talk about or even more….refuse to acknowledge even exists. I mean, just listen to Jim Cramer at CNBC and we are in the strongest/best economy EVER! How these douchebags can even say crap like that shows how stupid they think we lowly deplorables are and we only need to listen to those on high. I swear seeing that clip of Cramer making those propaganda statements was like the Iraqi propaganda minister back in 2003. That’s who I thought of when I saw Cramer.
But they can’t raise interest rates much because the entire federal budget would be consumed by debt payment. No more EPA, FDA, TSA, ATF, FBI…hey…wait a minute, I think I could get behind this!!
Retired – fixed income – Maximum 3% COLA…. Yay! I definitely feel like I am back in Carter years, except my hair isn’t nearly as good and the music is way worse!!!
The FED is not independent, the government would have been forced to reign in the crazy spending if the FED didn’t create the money to fund the insanity. If interest rates weren’t manipulated to near zero, the spending would have had to at least slow down. Now they only have one game plan which is to shrink the debt by inflation. Yeah lenders will get back the $ 1000 for a treasury bond but it’ll be worth $ 250. A social security recipient will get their $ 1600 per month but’ll be worth $ 350. See the US government will n
I am noticing a decline in the working class (blue collar). We all still have to go to a store to buy goods, but the level of competence of the employees is disturbing. They need leadership/management to guide them, but it doesn’t seem to be there.
This appear to be a John Galt moment we are entering, hence the achievers and producers appear to pulling out of the workforce. This is self-propelled by the individuals. I see further damage to our infrastructure excelling with our country’s poor leadership to mismanage or intentional? Including counties and cities officials.
Those raised during a time when US education was a world leader are now retiring. I hate to think how bad things will get for blue collar once those educated in the 2000s really start having to take over. I fear a lot of industry/jobs I can’t even think of will just fall apart and the country with it.
With all this discussion about the Fed and the dollar, how exactly does crypto currency figure into this. I actually have bought bitcoin and sent it. I’ve heard about specifically about someone who bought into BTC in 2012 and is now worth well over $50 mil. The couple is relatively young (30) and don’t depend on the money nor do they spend or look like they have wealth (on paper). What I’m trying to figure out is that people keep talking like crypto will overtake the dollar in terms of everyday use. I don’t see how that will happen. Just to transfer bitcoin can take minutes or hours. It’s so unreliable. I’m totally baffled about it except that there’s a whole world out there using crypto.
I keep reading up on crypto and never see an answer to how this becomes a usable currency in terms of everyday normal transactions.
My personal perspective is to STAY AWAY FROM ANYTHING CRYPTO. Yes, people have made lots of money on crypto – as do many early investors in new things. People also LOSE lots of money.
The best use for crypto would be if you wanted to take a large amount of money to another country. Convert to crypto and travel with a small piece of paper with a number on it. At the other end, convert back to fiat money in the local currency.
Crypto may be viable as a store of wealth – for instance with the current situation of substantial inflation in Lebanon and Turkey.
Some crypto may be viable as a form of money, but for that to be viable, it needs to be stable. For everything else, there’s Visa.
In so far that Bitcoin and some other cryptos are something finite that are neither created, owned by or owed to any government, I use crypto as a hedge and hold a small portion of my portfolio as crypto. Similar to the way I use precious metals. Another hedge position in my portfolio. Do I expect gold, silver, crypto to be the primary means of transaction? No, but they should transition me well into whatever currency comes after the petrodollar ultimately does fail.
That is the question, will it survive? I would buy some and hang on to it.
Options 1 & 2 are the same thing. Stop buying bonds and you have decreased demand and constant or increasing supply, which means price declines. As you know an increase in interest rate also leads to decreasing bond prices. They are one in the same with regards to yields (increasing interest rates).
I for one am rooting for the fed to stop their bond purchases. I’d love to find out what kind of yield would be required to motivate real people to buy debt from a seller that hasn’t written a budget in 12 years and is already $30 trillion in the hole.
“U.S. consumers’ short-term inflation expectations pushed higher in November and expectations for future earnings growth dropped, suggesting they anticipate price increases will outpace wage gains at an even faster rate in the near term, according to a survey released on Monday by the New York Federal Reserve.”
Does anyone else read this as al-Reuters trying to blame consumers expectations for inflation?
Good catch.
NY and California are making moves to shut downs with new mask mandates.
They are gonna try the mail in ballot scam and the Covid Unemployment scam. Biden will play right along with them, since it worked out so well the last time. Pelosi made sure the payoffs went through via the taxpayer bailout money.
I’m picking up that people want a plan to financially survive these trying times….I’ll suggest “Dave Ramsey”….
Some key points that I remember….
—Pay off your high interest items first….
—Save 6 months of salary….
—Work on paying off your house last….
Please check out Dave….it won’t hurt.
If Marie Antoinette were alive, would she warn the elite to concern themselves with the need for food. In order to head off potential problems.
According to historical legend, cry of, “Let them eat cake!” was the straw that broke the camel’s back during the French Revolution.
Expecting that the Fed will be able to influence the path of inflation via monetary policy which has influence over the demand side is flawed thinking. The problem (as Powell pointed out during recent Senate testimony) is that the what is driving inflation most at this point in time is the supply side. Powell noted that the Fed failed to realize the role supply side was playing in current increasing inflation and gave no indication of what could be done by the Fed to influence supply side. The reality is there is nothing the Fed can do for the supply side. Their efforts via monetary policy will be futile while aggregate supply is increasingly constricted.
The leftists have taken us back to the 1970s era of stagflation by design via their policies of control and regulation. What is needed is political leadership that will work to expand aggregate supply. Eliminate market inefficiency (like banning trucks over a certain year servicing our busiest ports), eliminate restrictive practices (like those in place around energy), and eliminating disincentives to work (like illegal health mandates and increased welfare w/o employment requirements).
The problem is no politician is affected by this and honestly no DC bureaucrat. They all have too much money – they probably haven’t even noticed.
This only gets real when they fear the voters in flyover country and I’m not sure they ever will.
From the dussel in chief…”not everyone’s looking for a used car”. C’mon man.
Yeah I wasn’t looking for a “new” car either until someone turned into my lane and we hit head on and my car burned. Insurance payout:34k Same car similar miles:38k. Yeah that works 🙄 The car was less than a year old and the payout was only 2k shy of the original price I paid. Dealers now put a surcharge on cars because of supply issues and because they can.
The article’s title needs to be revised to add at the end. . .
‘up to a Sideways Shit-Storm’
This will be global.
US dollar is the global reserve currency. Oil is traded in USD, most countries have USD. Now what?
What happens when the global reserve currency loses value fast or even collapses?
We may be about to find out
Sundance,
“There are three options: (1) stop buying debt; (2) increase interest rates; or (3) deploy some COVID mechanism to shut down people and hit the demand side.”
We must consider a fourth choice the FED, BIS, World Bank, major western economies and other ‘stakeholders’ (international banks) may make.
This has been in the back of my mind since the series of cyber attacks culminating with the attack on the Colonial Pipeline and subsequent truth about the nature of that attack (financial payment system).
I have been waiting for a signal and now it has arrived at serendipitous time for the Cabal from none other than Reuters. No one else has picked up this story and that can mean something in itself….
A trusted source of financial information and analysis that doesn’t belong to the hive mind financial system who has worked inside the system.
Maneco64 About 13 min