The defender and protector of leftist politics, CNN’s Chris Cillizza, is having a meltdown over the 2022 mid-term prospects for Democrats, calling the economic situation “disastrous for Democrats’ 2022 chances.”

Cillizza is referencing the cumulative effect of high inflation, high gas prices, a negative GDP outcome for the first quarter, and now the latest Gallup polling data:

In the latest Gallup poll, conducted April 1-19, four in five U.S. adults rate current economic conditions in the country as only fair (38%) or poor (42%), with few describing conditions as excellent (2%) or good (18%). Furthermore, 76% of Americans say the economy is getting worse, 20% say it is improving, and 3% think it is staying the same. (read more)

As CNN shares, “if things stay roughly where they are today — in terms of economic measures like GDP and CPI and Americans’ perceptions of the state of the economy — Democrats will experience a cataclysm at the ballot box this fall. The question won’t be whether they hold their paper-thin majorities in the House and Senate, but rather how big the electoral hole will be that they have to try to dig out from over the coming decade.” (link)

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This is an update to an ongoing issue we started seriously discussing last October when it became clear that if the trajectory was followed, “the absence of food will change things.”

The International Monetary Fund (IMF) is continuing to send warnings with increased urgency about the very real possibility of widespread food shortages in regions where food instability is a historic issue. [SEE HERE]

“The war in Ukraine has triggered a sharp increase in energy and food prices that could undermine food security in the region, raise poverty rates, worsen income inequality, and possibly lead to social unrest,” the Fund said in its annual Regional Outlook for Africa.”

This is a recent warning around a topic that has increasingly gained international attention.  Indeed, experts in multiple related agricultural fields have openly started to discuss and predict a looming crisis as the majority of the global food supply is contingent on only one or two growing cycles per year for harvest.  Those harvests are facing multiple headwinds that could likely result in lower yields.

Against this backdrop we can be certain that all nation’s government interests are taking this issue seriously.  Now, we are starting to see a race for supply control by various governments.

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For his weekly monologue today, GBNews host Neil Oliver notes how government officials are now globally focused on stupid personality issues as a distraction from the complete mess they created.  Ironically, I just watched a Canadian parliamentary session yesterday where the most urgent policy for their assembly was ‘menstrual equity.’  Yes, you read that correctly.  It left me with that same bread and circuses thought as outlined by Oliver today.

Political leaders, not just in the U.K., are snipping and snarking at each other over the most ridiculous issues and personality points.  Do we really care about what kind of car the energy secretary drives and the hypocrisy it may represent?  Is there a purpose to the insufferable banality of it?  Indeed, they want us to move along, move past the issues they created with the pandemic nonsense.

They need us to participate in the great new pretense where consequences are inconsequential, discussion is disinformation.  We are to listen to their square dance music and participate gleefully, while pretending our economic barn isn’t burning down around us.  As the flames spread, we are supposed to ignore and forget the gasoline drums the politicians placed in the loft and just keep dancing….  However, most of us normal folk can’t ignore that it’s getting really hot in here.  WATCH:

(TRANSCRIPT) – “We need some grown-ups in the room – and pronto. As things stand in this country, right this moment, we’re being governed by what appear to be outsized school children intent only on picking fights with one another in the playground, calling each other names.

As far as anyone can tell, the party of government and those of the opposition are interested only in themselves and each other. Life in a goldfish bowl has apparently given them five-minute memory spans. Round and round they swim, seeing nothing beyond the glass and having the same tiny fights with their fellow inmates again, and again, and again.

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The Bureau of Economic Analysis (BEA) released March and first quarter (Q1) data today on personal income and outlays [DATA HERE].  The results show an increase in Q1 wages of 4.5%. However, inflation is running 6.6% on the items workers need to purchase.  The net result on Main Street is unsustainable inside the economy.  The U.S. stock market is responding negatively to this release.

It’s easy to get caught up in the esoteric weeds, so my effort here is to show just what is happening by putting an overlay of checkbook economics into the BEA release.  If we take out the noise it is very easy to see the problem.  I have modified TABLE-4 to put the results into simple understandable terms.

(Table 4, Source)

By looking at the far-right column (Q1 2022) you can see the problem.  Wage growth at $268.00, minus taxes paid $51.40, leaves disposable income or take-home pay at $216.60.  However, our expenses for living (shelter, food, utilities, energy, etc) cost $398.50, leaving a deficit for our income of $181.90.  We either dip into our savings to cover our expenses, or we go into debt.  This is not sustainable.

If you look at Q1 last year, you can clearly see where all of the inflation is coming from.  That massive increase in income came from the federal COVID bailout and stimulus funds.  $4 trillion directly pumped into the economy at a time when Biden justified massive bailout spending by saying they needed to offset the economic cost of prior COVID intervention (businesses and workers shut down).  That is the primary source of current inflation.

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Yes, this actually happened today.  During her press briefing Press Secretary Jen Psaki said the White House doesn’t want to “define what success in Ukraine looks like,” but demands U.S. taxpayers to give them another $33 billion toward it.

A few moments later Psaki admits the money will be spent subsidizing not only Ukraine, but NATO allies who are suffering the results of inflation.

Psaki stated the Biden demand for more money “is not all for Ukraine, it’s also for some of our Eastern European partners and others to help support them during this time as well.”  Wait, now we are paying to subsidize the economy of EU countries while our own economy is contracting?

Seriously, the scale of this hubris is blood boiling.  First, they cannot tell us what success consists of, but give us money anyway.  The first segment to watch happens at 18:15 of the video, WATCH (prompted):

TRANSCRIPT – Q    Against the backdrop of the President’s announcement today and request for this $33 billion aid package, can you say: Is it the policy goal of the United States for Ukraine to defeat Russia? 

MS. PSAKI:  Well, look, it depends on how you — we’re not going to define that from here.  That’s for the Ukra- —

Q    How would you define it?

MS. PSAKI:  Well, that’s for the Ukrainians to define. 

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This is getting seriously out of hand.  On top of the $14 billion already appropriated for Ukraine assistance, Joe Biden is now asking for a supplemental budget allocation of an additional $33 billion for Ukraine.  Good grief, that’s almost $50 billion in aid, plus the billions in distributed weapons.

Biden is asking for U.S. taxpayers to fund the budget, salaries and pension obligations of the Ukraine government.  Biden made his request in a letter [SEE HERE] to House Speaker Nancy Pelosi:

[…] “I am writing to provide you with my request for fiscal year (FY) 2022 emergency supplemental funding for critical security and economic assistance to Ukraine.
 
I appreciate the Congress’ continued bipartisan support for Ukraine, NATO, and other partner countries affected by Russia’s War in Ukraine.  My Administration is committed to providing the Ukrainian people the assistance they need.  Our assistance to date has made a difference on the battlefield, helping Ukraine win the battle for Kyiv. 

This $33.0 billion request for additional funding and authority builds on the Congress’ supplemental appropriation of $13.6 billion on March 15, 2022, and seeks to address immediate and near-term security and economic needs.  Additional security assistance will put urgently needed equipment into the hands of Ukraine’s military and police, including ammunition, armored vehicles, small arms, demining assistance, and unmanned aircraft systems. 

Economic assistance will provide Direct Budget Support to provide rapid, flexible funds to assist the Government of Ukraine.” (read more)

Joe Biden wants U.S. taxpayers, those who are struggling to pay our own bills, to fund the government of Ukraine?  In case anyone is not up on current events, we are broke.

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The Bureau of Economic Analysis (BEA) released the First Quarter GDP figures today [DATA HERE] showing the U.S. economy contracted -1.4% in the first quarter.

Gross Domestic Product (GDP) is the dollar value of all goods and services produced in the economy, minus the dollar value of goods and services we import.  The percentages discussed are percentages of change over time.

The first quarter result was an annualized rate of negative 1.4 percent, meaning the U.S. economy is shrinking.   However, this should not come as a surprise as the primary driver of our GDP is consumer spending.  With everything costing more, less stuff is purchased.  Less stuff purchased leads to less stuff generated.

While the first quarter result of -1.4% is not a surprise, in the commonsense perspective, the fact that BEA didn’t revise the fourth quarter result of +6.9% is a little eye opening.  There’s no way in an apples-to-apples valuation the U.S. economy goes from +6.9% to -1.4% in one quarter.  Instead, what we are seeing is the effect we mentioned when the Q4 result was announced.  The BEA is modifying their assumptions by increasing the inflation rate in their calculations of the value of goods and services.  They really didn’t have a choice.

You might remember my prior opinion that the Q4 numbers were very overinflated because of two factors: (1) they underestimated inflation; and (2) the December 2021 import data from the Port of Los Angeles (POLA) was missing [NOTE: remember, Buttigieg was there in November and POLA supervisors are on team Biden].  I said at the time that if my hunch was correct the first quarter 2022 import data would be magnified by the December POLA data being added.  Remember, imports are a deduction to the GDP equation.

Well, what shows up in Q1?  A massive increase in first quarter import data that surprised everyone.  Go figure… lol.

Let’s look at the data

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At the same time as Russia has targeted railway lines as part of the effort to block U.S. arms shipments into Eastern Ukraine, Vladimir Putin has now followed through on the previous warning to stop Russian gas supplies unless payments are made in non-sanctioned Rubles.

Poland is obviously the primary target for retaliation here, as the NATO alliance is using Poland as the gateway for arms deliveries into Ukraine.

According to multiple reports from the EU Russia has halted gas shipments into Poland and Bulgaria.  (Reuters) “Gazprom Russia’s gas export monopoly, suspended gas supplies “due to absence of payments in roubles”, as stipulated in a decree from Russian President Vladimir Putin that aims to soften the impact of sanctions.”

There are conflicting reports as to whether Germany is paying Russia, or whether they are trying to avoid running afoul of the NATO alliance by reducing Russian imports.

Ukraine President Zelenskyy is using the opportunity to reinforce his position that all European countries need to stop purchasing energy from Russia, or else they are not supporting Ukraine.   However, it’s not as simple as it seems because multiple EU countries are dependent on Russia for energy products and there are no immediate alternatives.  Russia is leveraging this dependency in an effort to break the western sanctions.

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Goya Foods CEO Bob Unanu appeared on Fox Business earlier today in order to give a bigger picture review of the current status of food production. Unanu does a good job outlining how the interconnected systems from field to fork impact consumers.  The Goya CEO appropriately outlines what is happening and what the consequences are from Biden energy policy.  It’s a good interview.

Unanu does not push food alarmism and accurately states the U.S. food production system will ensure that food is available for U.S. consumers to purchase, albeit at higher prices.  The people most at risk from food insecurity are developing countries who rely on exports of food products generated by efficient, productive and exceptional farming operations in North America that feed the world.

For U.S. consumers it is the massive increases in energy and transportation costs that are driving up food prices, putting the issue of food insecurity into the correct context of food affordability.   WATCH:

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Consumers can offset the price impacts by shopping closer to the field, the origin of the food purchases needed.  Shopping for fresh food products at farmers markets avoids feeling the impact of shipping and transportation costs, and it helps the local economy.  If you are near areas with farm production in the United States consider the financial value of skipping the convenience of the supermarket in favor of shopping closer to the field.

In the field to fork food supply and distribution system, the closer you can get to the field for purchases the less costs you will encounter.  Obviously, for many people this may not be possible.  However, for others it might be time to evaluate the cost of convenience.

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Another item in the long list of ‘thanks Joe Biden‘ stuff.  Shortages in natural gas in windmill chasing Europe have driven up the prices significantly.  The conflict between NATO and their targeted villain in Russia is only making matters worse.

As the EU prices jump to $33/$34 per million British thermal units (BTU’s), the U.S. natural gas selling at $6 per million BTU’s is an absolute bargain.

Liquify that stuff and send it across the pond says any smart energy capitalist.

However, that comes with a problem for us.  Our supplies of natural gas are depleting quickly, our exports are now almost three times more than our production.

LONDON, April 8 (Reuters) – U.S. gas prices have climbed to their highest level in more than a decade as strong demand from overseas has emptied storage and left inventories well below average for the time of year despite a mild winter.

Front-month futures for gas delivered at Henry Hub in Louisiana have risen to $6.40 per million British thermal units, the highest in real terms since 2010. Wholesale prices in the United States are still far below those prevailing in Northeast Asia ($33 per million British thermal units) and Northwest Europe ($34).

[…] U.S. LNG exports rose 13% in the three months from November to January compared with the same period a year earlier, while gas production was up by less than 5%.

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