This is the state of our union….

In order for the two-winged UniParty vulture to continue devouring the host they must always do two things:

(1) Present the illusion of choice; and
(2) Pretend not to know things.

The frustration you feel is a feature of the controlled program, it is not a flaw.  We The People are in an abusive relationship with our own government. The only real divide in our nation is the division between two classes: rulers (with wealth) and the ruled (without).  All other divisions are purposefully created by those who operate the system.

Inflation serves their interests.  Inflation cheapens the debt burden they create, which allows them to keep spending and transferring taxpayer wealth to themselves and the club insiders.  We The People are in an abusive and subservient relationship with our own government.

Ukraine is a shiny thing that keeps us from watching them.   Do not be distracted.

The “Producer Price Index” (PPI) is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released February price data [Available Here] showing a dramatic 10.0% increase year-over-year in Final Demand products at the wholesale level.  This is the highest rate of inflation in the PPI ever recorded.

The single month increase in wholesale prices of 2.4% was driven by inflation built into the supply chain at every level that shows up in the final wholesale price.  Those price increases then get passed along to consumers along with the additional costs for warehousing, transportation and delivery.  I modified Table-A to take out some of the noise.

The January, December and November data was also revised significantly upward, and a sketchy footnote is included in the data. “Some of the figures … in this release may differ from those previously reported because data for October 2021 through January 2022 have been revised to reflect the availability of late reports and corrections.”   Remember that temporary drop in December, yeah, that’s wiped out now.

The reason the total demand inflation number is 0.8% is only because inflation in the service sector is lower than inflation in the goods sector.  Two reasons: (1) energy costs embed in goods first before services; and (2) when inflation on goods squeezes budgeted consumers, less services are demanded.

Unfortunately, there is nothing upstream in the supply chain and manufacturing pipeline to suggest that higher prices at the retail level are not coming.  The price of raw materials, and the wholesale energy costs to process those materials into finished goods, are still rising.  Factually, the recent massive increase in fuel and transportation cost is not included in this data.

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In September of 2019, Elizabeth Warren promised to do something on her first day in office that would rebuild the Russian economy, grow China’s influence and support the Maduro regime in Venezuela.  We immediately wrote about it HERE.

SEPT 7, 2019 – Democrat presidential candidate Elizabeth Warren has made a campaign promise that was quite remarkable:

What Senator Elizabeth Warren promised in that tweet is EXACTLY what Joe Biden did on his first day in office.   Now, before going further, let me explain something about that relationship that will likely make a lot more sense.

You might remember when all the democrat candidates in the 2020 primary were told to drop out right before Super Tuesday, as part of the organized effort to stop Bernie Sanders from becoming the nominee.  The lone holdout was Senator Elizabeth Warren.  She was polling essentially even with Joe Biden while Bernie was leading.

It was very well documented at the time that Senator Warren was negotiating terms with the Biden team for her compliance and support.  Eventually, as the controlled party momentum grew, Warren agreed to drop out of the race, and she endorsed Joe Biden.  The terms of that agreement were never made public, but when we look at the priority of Warren (tweet), and compare it to the literal duplication of that pledge that was carried out by Joe Biden, well, the coincidence doesn’t look coincidental.   I digress…

Back to the original statement by Warren.  At the time she made this statement in 2019, we outlined a very specific series of consequences that would happen if she really did target fossil fuel on day one.  Now that Joe Biden has carried out exactly what Warren outlined, let’s go back to that 2019 outline of consequences and compare it to where we are today.

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Mohamed El-Erian, the chief economic adviser for Allianz, got the inflation problem correct; states a forecast in line with CTH Main Street review, but then falls short on his political outlook for the solution.

Within the interview, El-Erian predicts inflation at the current CPI measure will increase from current 7.9% to over 10% this year.  That aspect is in alignment with CTH review at ground level.

Current real inflation is more than 15% across the board, if you use the CPI methodology we were using in the 70’s and 80’s.  Both the scale and the speed of the current price increases are historic.  That is why you are seeing prices on retail items jumping so high, so fast.  The price increases on highly consumable goods are in the 15 to 20% range.  WATCH:

An increase to over 10%, using current CPI measures, equals an increase of 25 to 30% in actual price (using historic measures).  Keep in mind, we have already passed through a wave of backward-looking inflation in the 25 to 30% range.  El-Erian is predicting a duplication of that scale into the remainder of 2022, I agree.  The 2020 $3 item became the 2021 $4 item, which will now become the 2022 $5.50 item.  That is our reality. It will not get better.

Where we differ from El-Erian is on the wage side and the political analysis.  Any political intervention to create govt subsidy with the goal to generate a higher workforce will backfire – bigly.  Recent historic employment statistics have not yet reflected the demand side decline in goods.  The employment data is skewed and useless because of the COVID mitigation impact on jobs.

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Tucker Carlson used his monologue tonight to give a big picture review of how the White House is using the Ukraine-Russia conflict to hide the economic outcomes created by their policy.

Massive inflation on basic necessities, combined with rising gas, fuel and energy costs are crippling the working class.  The White House is now using the Russia-Ukraine conflict as an excuse to hide their responsibility.   It’s an accurate outline. WATCH:

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If you remember this very important quote from two weeks ago, what follows will make a lot more sense:

…”Strategic success in the 21st century is not about a physical land grab of territory; that’s what Putin has done.  In this century, strategic power is increasingly measured and exercised by economic strength, by technological sophistication and your story – who you are, what your values are; can you attract ideas and talent and goodwill? And on each of those measures, this will be a failure for Russia.”

~ Deputy National Security Advisor Daleep Singh

White House Deputy National Security Advisor Daleep Singh boiled down geopolitical power to a cultural issue of social likeability.  This is genuinely what the people running the Biden administration believe.

Everyone in the Biden administration is, after all, spawned in the petri-dish of community activism. When they successfully installed Barack Obama, the premise of their strategy proved accurate.   Within this political and cultural strategy, pop icons are used as influencers and policy ambassadors.

This report today from the Washington Post is directly aligned:

(Washington Post) – On Thursday afternoon, 30 top TikTok stars gathered on a Zoom call to receive key information about the war unfolding in Ukraine. National Security Council staffers and White House press secretary Jen Psaki briefed the influencers about the United States’ strategic goals in the region and answered questions on distributing aid to Ukrainians, working with NATO and how the United States would react to a Russian use of nuclear weapons.  (read more)

It is very easy to snark or ridicule this approach from the position of being an intelligent adult in a world of childishness.  However, we dismiss it at our own peril.

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The nationwide average for regular gas is now $4.32 a gallon, according to AAA. Just yesterday it was $4.25. In just a few days gasoline has eclipsed the highest price ever recorded by 20¢.  The previous record was $4.11 in July 2008.  Unfortunately, there is no end in sight.  Anecdotally, my neighborhood gas station went up 75¢/gal in just three days and is now $4.95.

Nationally, Diesel prices are also at record highs, with the average cost at $5.06 a gallon, up almost twenty cents overnight from Wednesday to Thursday.  This will increase transportation costs for all goods being delivered.   The speed of the current rate of increase is very troublesome.

(Current gas price in West Hollywood, Los Angeles, CA)

USA today has an estimate of gasoline prices by state – SEE HERE

What is the current price near you?

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The Bureau of Labor and Statistics (BLS) has released the February capture of the current inflation situation {DATA HERE} – the results are alarming and unfortunately will get worse.

The February rate of inflation was 0.8% (adjusted), an increase from the prior month (Jan 0.6%), and the calculated year-over-year inflation rate is now 7.9 percent and climbing fast.   There are some important indicators and aspects that need to be emphasized.  [Modified table-1 graphic]

First, the capture of the current February data was BEFORE the Russia-Ukraine crisis came into play.  Despite the White House attempting to justify the release data today by blaming it on Russia-Ukraine influence on oil and gas prices, the data itself was assembled before the recent spikes in oil and gasoline.  This is an important distinction, because that means what is coming next is even higher.

Second, what is surfacing now in the data is what we previously outlined in October and November as the inflation hurricane heading our way.  All of this was predictable, given the nature of the inflation, at all three stages of the supply chain (raw material, intermediate and wholesale).

The price of goods is still rising inside the supply chain, and the rate of petroleum price increases (energy and transportation) is making the final products even more expensive.

Third, the forward-looking rate of annualized inflation is higher in almost every category than the year-over-year backward looking data. This means future price increases will be even higher than previous price increases.  The rate of inflation monthly (in almost every category) is exceeding the previous rate of inflation.

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First things first, there is no need for panic, and it is important to remember the United States is a net food exporter.  The U.S. is blessed with a food production and capacity industry that leads the world.  We have fertile land, abundant harvests and the strong advantage of food independence.

That said, the influence of multinational corporations in our agriculture industry over the past three decades has ramifications, and we have outlined exhaustively, on these pages, what the real-world consequences are. As we head into a chapter of global food crisis, the food production capacity of the United States can be viewed as an asset, but only insofar as we are willing to secure a national food supply for our own America-First interests.

What we have talked about prudently on these pages is now coming into greater focus, as global leaders are beginning to prepare their own citizens for the long-term consequences of their disruption to the food supply chain.

The meteor of government intervention hit the ocean back in the spring of 2020, when government intervened in the food supply process, the tsunami -the ripple effect from that intervention- is now within sight of shore.

I’m not going to repeat the history here. CTH readers already know the details {Go Deep} – for everyone else, use the site search function.  As a result of intervention, global COVID intervention, food stocks were depleted.  Combined with increased energy costs, driven by the ideological chase for climate change under the guise of ‘Build Back Better,’ we end up with higher fertilizer costs for this year.

The ripple effect becomes a tsunami, and the next round of global food harvests becomes more critically important and simultaneously more expensive. For the past three months, the sound of the alarms have grown louder.  Now, people are really starting to pay attention.

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Gasoline is now at the highest price ever recorded. The average cost of a retail gallon of unleaded gasoline hit $4.173, according to the American Automobile Association, with many regions now far exceeding that price.  It is not uncommon to see $5/gal gasoline in many areas.

Against this backdrop, Joe Biden announced today that his administration is banning the import of oil, liquified natural gas (LNG) and coal from Russia.  [We do not import LNG or coal from Russia, so that political point is moot.]  You can read the executive order HERE.

The executive order also bans any U.S. entity from investing or facilitating the investment of Russian energy development.  That section explains why there were earlier reports of Oil companies withdrawing from Russia.  They were obviously given a heads up.

The way the order is currently written, and a lot of it has to do with extremely generous interpretations by the U.S. Treasury Dept., it would appear that any energy company currently operating in the U.S. cannot simultaneously be operating in Russia (or be part of the subsidizing and insurance network that supports energy development in Russia).  The Treasury interpretations here are fraught with complexity.

The part that matters is boiled down in this section:

(i)    the importation into the United States of the following products of Russian Federation origin:  crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products;

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