It’s all a ruse; an economic shell game being played for politics – nothing more.
Consider this quote from Fed Chair Jerome Powell today, “Inflation remains well above our longer-run goal of 2 percent. Over the 12 months ending in September, total PCE prices rose 6.2 percent. Excluding the volatile food and energy categories core PCE prices rose 5.1 percent. And the recent inflation data again have come in higher than expected. Price pressures remain evident across a broad range of goods and services. Russia’s war against Ukraine has boosted prices for energy and food and has created additional upward pressure on inflation.” (source)
You can argue Powell’s points of demand side inflation all day long, it matters not. It’s nonsense. Take interest rates to 10%, or even eleventy percent, and that will not stop inflation because demand is not creating it. Current inflation is a supply side issue, driven by a radical change in energy policy. I have made this case for well over a year, sooner or later people are going to have to stop believing the demand side nonsense.
As Powell himself noted, “with today’s action, we’ve raised interest rates by 3 ¾ percentage points this year,” and yet inflation hasn’t flinched. Why? Because there was no excess consumer demand to tame all year. Demand for consumer goods has been in a freefall since the fall of 2021, while the prices of those goods have remained on an upward trajectory because costs associated with producing them continue rising. That’s a supply side inflation issue, not demand – but Powell cannot admit it.
Powell […] “Even so, we still have some ways to go. And incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected. Our decisions will depend on the totality of incoming data and their implications for the outlook for economic activity and inflation. We will continue to make our decisions meeting by meeting and communicate our thinking as clearly as possible.
We’re taking forceful steps to moderate demand so that it comes into better alignment with supply. Our overarching focus is using our tools to bring inflation back down to our 2 percent goal and to keep longer-term inflation expectations well anchored.”
If you want to take the pretending out of the paragraph and make it truthful, insert the word energy:
“We’re taking forceful steps to moderate [energy] demand, so that it comes into better alignment with [policy driven energy] supply.”
There. THAT’S THE TRUTH !!
Ask yourself, or anyone else, this simple question:
...At what point in the process of raising interest rates does the price of gasoline, home heating, natural gas, electricity, diesel fuel or food start to drop?
How does a 15% federal interest rate lower food prices?
.
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consumer demand is too high for what? Eggs? Bread? Cereal? Spaghetti-o’s?
Right. We should buy fewer necessities and be brought to our knees, because Democraps.
spaghetti-o’s were .99 under trump and they’re $1.50 now. Sorry, had to share, never thought I’d have an avenue to complain about Spaghetti-o’s… just by two instead of three…thanks Jerome….
Uh oh Spaghetti-O’s !! sung to the tune of Uh Oh Spaghetti-O’s
Tried feeding the two granddaughters SO’s. They spit it out.
The supply sits 150 miles off the coast and the food will rot. California laws will not permit trucks that now pollute beyond their (Ca.) regulations to move on their highways.
Yes, and despite assurances otherwise, NOTHING was done to address this, except have the ships move FARTHER out, so they wouldn’t be as visible, AND so they could burn cheaper, far dirtier bunker diesel, and since they are sitting out there pluting away, Cal air will be dirtier than if they waved the truck mandate.
“You people are eating too damn much! Aren’t you all vaxed by now? Why can’t you just die already?”
J. Powell
Yep. Sums it up well.
J. Powell: Why haven’t MORE of you had your homes foreclosed yet!? My masters at Blackrock haven’t yet expanded their distressed property portfolio
We should all just *eat cake*!!!
If we shutup and get vaxxed …. we won’t need food.
These clowns have no clue what they are doing….
I have dreams, where they are hunted in the streets…
They know exactly what they’re doing.
A reporter on Good Morning America yesterday (Wednesday) pointed out at the end of her segment that the rate hikes so far have had zero impact on inflation, that prices continue to rise. She probably doesn’t work for ABC any more.
I was looking for that news segment I just mentioned, and I came across another GMA segment “Steals and Deals” where they urge people to buy random sh*t because it’s allegedly on sale. I think they have that segment at least once per week. So are we supposed to be buying a lot of stuff now or not? Have we ever received any guidance from Biden or his token sidekick Karinne about how we should be acting at this time, other than their less-than-helpful hints about buying generics?
And what about EVs? We were told to buy EVs but we’re also being told that buying things is driving up prices, right?
I’m confused. lol
Confused is what they want. If you don’t buy quick, it will no longer available. (China won’t make any more.)
If they want people to buy less sh*t then why don’t they cut off the massively huge pipelines through which Chinese goods flow directly into the US, with us taxpayers footing the bill for the shipping.
McConnells inlaws run shipping company, financed by interest free loan from CCP.
WHY, as this is well known, and not disputed, is he not in jail?
Powell thinks everything is demand. He doesn’t appear to understand the basic concept of economics, that price and quantity are determined by the intersection between supply and demand. The head of the Bank of England appeared to have the same misunderstanding when he drove Liz Truss out of office for daring to propose a tax cut to alleviate Britain’s economic ills.
Back in 1982, the combo of the Reagan tax cuts increasing supply with Fed interest rate hikes to reduce demand ended the inflation of the 1970s — but the heads of both central banks don’t appear to know the relevant economic history!
And there is another mistake that Powell is making also. He doesn’t appear to realize that government spending is increasing demand by government faster than he is able to decrease demand by consumers and businesses. Check out the following graph from the Federal Reserve to see how fast government spending has been rising:
https://fred.stlouisfed.org/series/FGEXPND
Oh … they clearly understand the economics. They just don’t like it. They view themselves as genius gods who can bend the economic curves to their will. They don’t like or believe in supply and demand … so they ignore it and try to change it. Problem is … economics IS human behavior. And at the core of that behavior is SURVIVAL. We, mortal humans will ALWAYS behave in our own self-interest … that curve cannot be bent or fiddled with. Human behavior in the coming months will be defensive and protective … followed by violent and aggressive if things don’t change.
The sooner they can drive us into the ditch of total submission, the faster uncle Klaus can take over the world with his magic reset button.
it’s all about their global warming/climate change/green $$$ agenda. Somehow, they can’t tell us if we need an umbrella tomorrow, but our actions today will affect a one degree world temp 100 years from now? Come on, man!
“Powell thinks everything is demand. He doesn’t appear to understand the basic concept of economics, that price and quantity are determined by the intersection between supply and demand.”
I’m sure he understands it quite well.
IN THE OLDEN DAYS; demand used to mean that stuff was lower priced and there was more available. …. more people had to work also, not sit home on their posteriors.
👊👊👊 Love your truth bombs!!
60% or more of Americans are living paycheck to paycheck.
These are the people the Fed thinks are able to purchase so many goods they’re creating a scarcity to create inflation.
More blame-shifting won’t convince people when they look at their actual situation.
…and that ladies and gentlemen concludes this pump and dump exercise by our financial puppet masters … sorry for the losses suffered by all you want to be smart investors (suckers) but all my and my political BIG GUY friends’ accounts made money.
Wasn’t that fun??
Fake GDP report
Fake employment report
Fake stock rally
Democrats get election talking points … and all you Charlie Browns fell for it again.
Another dump is coming … big time. Anyone who isn’t OUT of the Stock Market NOW … is going to regret it. Bigly.
Just hedge your ENTIRE portfolio with S&P put options. The downside is limited and the puts’ value increase dollar for dollar with the portfolio loss. Once the bottom is hit and everything moves sideways for the next decade, sell covered call options to generate portfolio returns.
No thanks. I’ll just continue to put my $ in ammunition futures, as they continue to hold their value (inflation proof) and will inevitably become currency once the $ implodes and people reject the new “funny $” of “digital currency”.
“Consumer demand is too high” wins the monthly award for dumbest comment by an economist.
How to destroy an economy and country by Jerome Powell!
The MAOcrats spend us into oblivion and the Federal Reserve finishes the job.
“Excluding the volatile food and energy categories” tells us nothing about the actual rate of inflation.
Spot on Sundance, and I am as tired of having to read about this Bureaucratic nonsense as you are. It is never ending BS.
It’s also labor costs have risen.
so they can make more for themselves…..not the employees doing the work.
Powell is full of crap. Does this guy actually get paid? I feel bad for families wanting to feed/provide for their children. These fed types live well and care nothing for the former “middle class.”
Well, it is Russia.
In the sense they are leading the world off US dollar reserve.
US is maintaining a strong dollar so the west has a stable currency to go to provide some financial stability in the world.
When the dollar starts to lose value then you will know real inflation as countries exit dollars.
Inflation IS “the dollar losing value” and its been going on my whole life.
All these interest rate hikes are doing is destroying asset values.
Those that depend upon the selling of assets in order to consume will naturally alter their consumption patterns away from discretionary (say cruise ship vacations) towards the essentials of food and fuel we all have, retired or not.
To state otherwise is either a sign of complete idiocy or collusion.
Keynesian…errr…Kenyasian Economics.
Effectively, Powells argument is denigrating Americas consumer market.
Traditionally, Americas “consumer market” was one of Americas core strengths; we ALWAYS “punched above our weight class” with America consuming more goods and services that countries with far larger populations.
All manufacturers wanted “in” to the U.S. Market, BECAUSE of this.
And THIS guy, making THESE rediculous, non-sensical arguments, is “the guy” in control of the economy, and is representative of the “pool” of idiots Fed chairs are drawn from!
That we sock puppet is reading from the WEF script.
“Consumer demand is too high.” Yah, that’s right Puppet Powell. We demand our energy resources be utilized. We demand you stop denigrating half the nation. We demand you enforce the laws of our country. We demand you let parents raise their children, not your communist nanny state. We demand all races be treated equally. We demand you stop spending our money on foreign countries and their conflicts we want no part of. We demand you, Joe Biden, Mark Elias, and all your socialist criminal gang uphold our citizens constitutional rights.
And finally, after a republican majority takes control we demand you present yourself along with your subpoena to congressional questioning for not supporting the laws and constitution of the United States.
Not surprising that Powell makes a unnecessary false political statement. Goes with his earlier this inflation is transitory. Recent Fed chairs have a history of keeping interest flat and low during democrat administrations and rising them during republican administrations. See 2008 to 2020.
I think they believe the hype that the democrats are the political future demographically but with the loss of hispanic and black support since 2016, they might be betting on the wrong horse!
Folks that monitor food activity in the world predict we will see food shortages in 2023 and famine in the US in 2024. Be sure to thank your local democrats for the actual human suffering their communist activities have created. They are pure evil.