To me, this is just jaw-dropping. The Federal Reserve Chairman Jerome Powell made statements today akin to saying the emperor is wearing a beautiful coat. I can share examples, but to really encapsulate the issues, it’s actually easier to start by sharing a chart he presented when discussing inflation.
Do you notice anything missing in this chart? Look at it carefully.
If you look at it and say: “hey, where’s the actual 2021 data he is talking about“, give yourself a cookie.
The guy is talking about the issue of 2021 inflation and expressing his empathy that inflation is running “far ahead” of the federal reserve projections. Yet, the graphic Powell uses doesn’t even show the 2021 rate of inflation that he is expressing his concern about.
Why wouldn’t the graphic show the rate of inflation for 2021? Well, take one look at what the graph would look like, and you realize immediately why he would not want to put it in front of people.
This is in essence what the graphic would look like if Powell included the 2021 inflation he is concerned about:
The 6.8% inflation rate is just about where the dot in the “j” of the word projection would be located. That’s where we are currently.
Now, do you really think that scale of inflation is going to drop in a dramatic inverted V formation to where the Fed projects it will end up next year (the little red line in the thing that looks like a battery)? Pro Tip: It won’t.
The chairman even said he anticipates “strong inflation throughout next year” into 2023.
Worse still, are his remarks leading into the segment where he talks about inflation:
(1) Powell claims the Fed “can see no signs of weakening consumer demand“. Who in the Sam-hell is he talking to, and how can they not see a drop in consumer demand?
(2) Perhaps worse, the Fed Chairman says almost nothing about the largest ever drop in productivity last quarter (-5%), and instead is only slightly worried that the drop in productivity is larger than the increase in wages (+3%). Whiskey – Tango – Foxtrot. Does this guy not have anyone on Main Street who talks to him? If I’m an employer paying three percent more and generating five percent less, what do you think I’m about to do?
Watch his remarks from 03:23 to 05:13 of the video below (prompted), and you will see what I mean:
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The key takeaway is this….
…. Take care of your family, this is only going to get worse.
Yes, thank you Sundance! I don’t get a cookie cause graphs blow my mind but I get the message of that lying snake who sold his soul for “Sweeties”!!!!! (what the white witch said to Edmund when he sold out his brother and sisters in Narnia, by C.S. Lewis) He better enjoy them now cause it all comes to an end eventually….
To borrow a phrase from the Catastrophic Anthropocentric Global Warming crowd:
<b> HOCKEY STICK </b>
and we the taxpayers are the puck
That is a beautiful metaphor.
me too
A puck about to get slapped but with no net to catch us.
The RED light is still flashing … permanently
I think we are “pucked.”
Nice one!
And I don’t give a puck what this guy stinks.
The government is the pucker and we are the puckees.
Brilliant!! I’m stealing that.
Hide the incline…
The Fed will wait until after the November elections to take action. Then they will then raise interest rates and stop bond purchases to crash the stock market. They will claim it’s necessary to control inflation. The Democrats will then continually blame the newly elected Republicans for the next two years while they have to deal with a Fed that’s working against them to destroy the economy in the run up to the 2024 presidential elections. That’s their plan. And much of the electorate will fall for it and blame Republicans for the destruction Democrats are creating now.
Once again, they rely on the stupidity of the American voter.
And it is quite easy to have “stupidity” when information including economic data and analysis are Controlled because freedom of speech is squashed.
The “stupidity” must be coming first, because they can get the information here like anyone else.
Dictators only stay in power because of FEARFUL and STUPID subjects.
Fed decisions usually take 12-18 months to fully impact the economy, so they’re doing just that by starting now.
Thank you James on your great analysis. It always the same with Dem Socialists, they create schemes that enrich their financial supporters and wreck a good economy with dangerous money printing and then when they are out of power, Blame the Republicans for not giving them more money to fulfill their evil plans to destroy this country. How much more longer can this country go on like this until we descend into hell.
May I borrow your response so I can remind my friends how devious their leaders are?
a neighborhood demoncrap is always wrong about everything, except: “The stock market does better with dimocrats in power.” Why, because of their schemes like you just described. They make a mess for whoever comes after them. Can you believe the stock market went up so much this year with the absurd demoncraps in power?! It was the same during the obama defilement. I guess most investors like communist dictatorship; that’s when they buy stocks more. And a lot of companies are pandering to them, e.g. blathering the absurd SCAMS, “climate change” and ESG. History has shown that you’re right. Since it’s been working for the demoncraps, they keep SCAMMING this way and in EVERY DISHONEST THING THEY DO. Short of hell, will they ever have to answer for their absurd DESTRUCTIVE, TREASONOUS, LIAR CRAP?
The 1% crowd/elite do very well with Democrats in power.
https://politicalmoonshine.com/2021/12/16/war-oil-and-omicron-then-now-and-trump-part-ii-oil/
Powell is not an economist and doesn’t seem to understand the fundamental concept of economics: that prices and quantity are determined by both supply and demand. This year’s inflation is being caused by both increases in demand and also by decreases in supply.
Once started, inflation gets its own momentum. Price increases lead to wage increases, which lead to more price increases. The best way to solve it is by increasing supply, as Reagan did to end Carter’s stagflation and Trump did to end Obama’s slow economic growth. Biden, Powell and Democratic governors, in contrast, have been intentionally decreasing supply through threatened tax increases, increased business regulation, increased business mandates and other actions that raise business costs.
Powell has been decreasing supply by discouraging banks from making loans to fossil fuel developers over the objections of several Republican senators. See:
https://www.aljazeera.com/economy/2021/4/14/powell-defends-feds-increasing-focus-on-climate-change-threats
Per a CTH article earlier this isn’t entirely true. Actual good moved has decreased while dollars traded has increased. This is why retailers reduced their employment numbers over the last month. More money, but on thinner margins and less product moved reduces overall profitability
Typically this time of year, Home Depot has Christmas decor galore, floor to ceiling, with end caps overloaded with blinking red-green stuff everywhere. I was in Home Depot yesterday — only 5 trees with fake lights.
Not my HD here on the gulf coast of central Florida. The Christmas decor went up before Halloween and lots of it. I’m also not seeing a weakening of consumer demand in new home construction. I divorced in Feb and am renting a condo. New construction behind me on zero lot lines and the builder can’t build them fast enough. 2000-2200 sq ft going for $650k on zero lot lines.
Okie,
I don’t think that anything you wrote disagrees with what I wrote. You are basically saying that actual goods moved has decreased (in other words that quantity has decreased). Simultaneously increasing demand while decreasing supply means that quantity is indeterminate – that it can go up or slightly down. The only sure thing is that prices will rise.
By the way, I am using demand and supply the way economists do. Each one is a curve that relates price to quantity. The intersection between the two curves determines the price and the quantity.
Light gauge steel is almost double it’s all time high. Though investors are desperately trying to put their money into real estate and construction, this bad boy of an economy is on it’s last legs.
The key to any business dealing with material products is INVENTORY TURNS. The more turnovers in inventory during any accounting period (week /month/ year), the higher the profits. Fewer turns = lower profits.
Business can only absorb so much cost increases from suppliers before it must raise prices to stay ahead of cost-of-goods-sold + expenses. And if supply cannot keep up with demand, all bets are off.
You’re spot on with “inflation gets its own momentum”.
It seems to have a life of its own and it tends to grow metastatically.
It certainly did in the late 1970’s and early 1980’s, when it had a decided impact on my life (as a college and grad student).
And the anxiety it generates makes it even worse, because you don’t know how high it will go or how long it will last.
When it finally tapers off, prices don’t go back down. They just cease increasing at such a rapid rate.
Having lived through that era with a single Mom supporting my brothers and I, it was a frightening time. Gas lines and shortages, increases in prices across the board and working after school to help pay bills. Here we are again.
It has made me stronger but, I am pissed that my wife and I and our adult children will have to experience this.
Well written and on the spot.
what in the heck is he waiting for? We forecast three rate increases in 20222. Whiskey Tango Foxtrot!. Raise the Fed Funds rates by 1% now and quit buying bonds. Can’t do that now, just gonna taper our bond buying with more funny $.
We have to remember this is the great reset. They must remove the buying power of main street if there is to be a reset. Thus the Fed allows the inflation to rage against the middle class machine.
I wonder if Powell is basing his “dots” for the future on the little recognizing fact that the numbers are Year Over Year (YOY)? This will allow him to argue that any further intervention is not needed. We will run head on into disinflation and eventually into deflation.
Just look at the 10 yr treasury 1.475. The bond markets sees this policy as driving us into a reset ditch. If you see the bond rates rise then you will know the global bankers see actual long term inflation. Otherwise, expect the Fed policies to continue to prop up asset values.
Interesting conclusions. I haven’t been sure what twists and turns will occur. But I agree with your starting point: The world villains want a “great reset”. I’ve been wondering if the economic ditch will occur from them killing billions with their vaccines. [Apparently, SO MANY SHEEPLE don’t realize that the “globalists” want to murder most of the world population. If they “achieve” that, surely there will be a gigantic fall in economic demand. But I do put an IF on that: 1. Will God allow it? 2. State’s rights: I live in Florida, and Governor Ron DeSantis is throwing backlash at every piece of treasonous crap that the satanists come out with. By now, the satanic traitors must be hating State’s rights above all else! (which is why, e.g., the traitors are trying to have voting under COMPLETE federal govt. control)]
I got a cookie.
Now I’ll have to freeze-dry and seal it, since that’s all the emperor wants us to eat when TWAWKI ends.
Or was that cake, Joe?
The democrats and the fed have gotten the US in a pickle. The debt load is such that rates cannot be raised else will blow the continuously bloated spending. Raising interest rates will not impact inflation as the economy that might use borrowed money has been decimated.
Indeed, take care of your family. Yes it’s going to get much worse, hyper-inflation then deflation. Assure that you have access to tangible items of real worth. Water, food, shelter, medicine. Ammo. We need to step back, in the short time we have remaining, and rationally evaluate our situation. It’s survival time. Get out of the cities and into the countryside. The cities are gone, hopeless. Cultivate a state of wanting and needing nothing except essentials. Our ancestors survived and flourished in an essentially pre-cash economy, we can as well. This is not some utopian pipe dream of Hippie Heaven, rather a blueprint for preserving what is worth preserving. I think it would be optimal to coalesce with like-minded people into an autonomous region, then build walls and issue passports. Walls are expensive so we’ll just have to raise taxes 🙂 Kidding. The Powers will not take kindly to all of this, as they have repeatedly stated they will give us no peace. Hence ammo. The alternative is to sit back and delude ourselves into thinking we can ride the storm out. But this particular storm is the Big One, it won’t be ridden out until we are ground into the dust. They want us gone, eradicated. No worries, as DJT said in his inaugural, God will protect us. If we are worthy
Raise a garden and have a few chickens. Make sure of a reliable source of water and the means to purify it. Try to live without the grid as much as possible.
Look at The Organic Prepper web site, and Backwoods Home magazine.
God bless!
There are a gazillion springs here for pure water. The State (MA) has closed and barricaded every last one. I had to drive 25 miles into VT and halfway up a mountain to get some the other day. Most commercial springwater is actually well water. Big difference. As for chickens the legislature is currently debating a bill that would mandate a specific amount of space for every hen. Seriously. This place is nuts
Very good advice. Moved to Arizona, near the foothills of Catalina. Best move we ever made. Following your advice. Many retired Veterans and Patriots here. Stay out of the Dem ruled cities. Once they ransack the stores in the city, they will try to make their way to the suburbs. Good luck, open carry and plenty of Deer Hunters in our town.
Stuck in Massachusetts. For now. I envy you
This is exactly why news shown to the lemming Headline chasing Investors is kept siloed.
While ALL of this was occurring…the UK and EU banks raised interest rates as the EU talked tough to Russia. Two major headlines among Asian market news that will whipsaw things again. Rational folks using actual economic metrics better hedge because those metric have zero to do with finance at this time, for “conventional” or “cyber money” investing.
The Whales are driving the Markets via headlines and control over timing of US Congressional Financial decisions.
Balance sheets have to cleaned up tax wise by 31 December, ahead of the new IRS tax tables for CY2021, as well as set the stage for supporting 2022 Elections.
Proving that everything Democraps touch turns BAD!
Got gold?
This seems like those “mostly peaceful protests” while the city was on fire statements. Bury your head and everything will be fine.
Orchestrated, coordinated destruction of the country. What they’re doing is an absolutely disgustingly abhorrent accursed thing. What their “great reset” metaverse is creating are the abominations of desolation. The enslavement of everyone’s bodies to serve and worship them in their global prison. What we can only hope is that these people responsible for it are completely annihilated at the end of it all. I believe that is exactly what’s about to happen too . . .
“The Beast and the Ten Horns you saw will hate the Harlot. They will make her desolate and stripped bare; eat her flesh and burn her with fire.” ~ Apokalypsis 17.16
“For in an hour such great riches are made desolate.’ . . . For she is made desolate in one hour.” ~ Apokalypsis 18.17,19
“. . . for your merchants were the great ones of the earth; for with your PHARMAKEIA all the nations were deceived. In her was found the blood of …all that were slain upon the earth.” ~ Apokalypsis 18.23-24
“However we are speaking of wisdom among the mature, but not the wisdom of this age or of the rulers of this age, who are coming to nothing.” ~ 1 Corinthians 2.6
Nobody will ask him to show the graphs they were using from February through September to justify their claims that inflation was “transitory” and would “subside by the fall”…
This chart reminds me a LOT of the famous Obama-lie-chart in 2009 which showed unemployment projections that turned out to be absurdly wrong:
https://i.insider.com/4fff3ff269bedd374100001c?width=960
Communists are the greatest fiction writers of all time. Whether peons accept the narratives or deny them is completely unimportant.
Please understand that raising interest rates is initially inflationary as it raises the cost of money. Eventually, it crushes the economy, then it is deflationary. Landing that plane is exceedingly difficult. Even if you do land it, things are never the same.
What’s the main way countries A) distract the populous from a severe economic downturn and B) quickly recharge the economy? What’s Putin doing on the border of Ukraine? What’s China been up to with Taiwan and the South China Sea (along with building up their military capabilities)? If you said “war”, here’s your gold star for the day.
Wow I don’t think we’re even going to survive to see the midterms. They will burn it down before then.
Back in the college years of the early 70s, my economic professor said that only 4% of the public understood economics. That may be high.
Again we have a politics influenced Fed Chair. Will drive us into a deep recession just after he steps down. Federal Reserve needs to die a fast death, flush out all the bad stuff and tax those elites who have been raping the country through FRB largesse.
The FED is EXCELLENT at ruining your life savings and ability to achieve life, liberty and the pursuit of happiness. They are about to cause the next great depression.
I only hope when the time comes, someone can “Settle It Down A Bit” the way Everett Sanipass tried in the 1987 World Juniors game between Canada and Russia.
The fracas started around this time:
Great moments in Canadian hockey…
Merry Christmas
So then … on the FIRST week of 2022 … the Fed can update their chart with an actual LINE!!??
Wanna bet when they do that, the vertical ‘percent’ axis gets smashed flatter than flat?
Lies, gawddamanned Lies … and charts/graphs
Awesome article!
People, please hunker down!
Just over 6 months ago I asked a regionally well known financial adviser how I should prepare for hyperinflation.
After about 15 seconds I knew I was on my own.
Buckle up
All economic bubbles POP.
The crash of the Stock Market Bubble will dwarf
the collapse of the 2008 Housing Bubble.
The worse it gets the louder the voices from the Ministry of Truth praising Brandon for fixing Trump’s “disastrous economic policies.”
Millions of ballots are already being shipped on sailboats and rafts from the faraway lands as we speak, boosting the world economy to infinity and beyond. Please clap.
Administration front people’s task is not to manage anything; the Deep State apparatchiks run the machines. Their only task is to channel their inner Jen Psaki and insist that it’s raining and not pissing on your leg
A line adapted from Apocalypse Now: The Four Star Clowns are in charge and they’re giving the Circus away.
And so all this mayhem obviously in front of our very eyes begs the question: WHY is there a Fed AT ALL?!
Do you know why?
If so, how do you justify it? Is it possible to justify it rationally and morally?
Notice how inflation FELL during the period 2017-2020. Hmmm … was there something different about that time period?
https://politicalmoonshine.com/2021/12/16/war-oil-and-omicron-then-now-and-trump-part-ii-oil/
They’re prophets. They foretold a hockey-stick and….got one. Just not the one they wanted.
I read that the Fed is the most profitable private corporation in the world. They keep printing money and giving it to themselves for free which they then use to prop up the top ten stocks and make 26% in 2021. Of course when the current crop of worthless mortgage securities goes belly up no problem the middle class will foot the bill.
Honestly, the average citizen is absolutely clueless when it comes to understanding inflation or even basic economic issues. We’re truly pissing into the wind to expect most people to become concerned until it hits them square in the pocket book. There are help wanted signs in every store window in town and the government is paying people NOT to work. Inflation? We don’t care about no stinking inflation! What could possibly go wrong?
The Biden administration is still riding on the coattails of the superior financial talent of the Trump administration. President did make some mistakes as everyone does. But he had a hell of a financial team.
Another hive mind reptile that eats bugs from the pit