Tucker Carlson used his monologue tonight to outline how intentional Joe Biden economic policies are destroying the lifestyle of the average American citizen. As Carlson notes none of this is accidental, all of these policies are being done with intent. Yet almost the entire media system and financial class, are denying the resulting outcomes.
The administration and media are not redefining a recession, they are denying one exists in order to make all of the policies permanent. WATCH:
The distance between Wall Street and Main Street has never been as brutally obvious as it is today. It is simply stunning to watch the cheerleading and casual nature of the economic and financial pundits as they speak esoterically about how policies intended to reduce the U.S. economy are so wonderful.
Seriously, the disconnect in life impact has never been as stark. At least in previous times of economic contraction there was a smidgen of appreciation for the pain that unemployment and rising costs bring to the blue collar and middle-income working class. In this new era, the financial stress and visible outcomes of destroyed families are simply shrugged aside as if these are abstract consequences.
In this segment former Federal Reserve vice-chair Randal Quarles, notes with a casual flippance how the economic policies of the Biden administration are simply doing what needs to be done in order to intentionally reduce the U.S. economy. Sure, massive unemployment, in direct correlation to the scale of the inflation that precedes it, is almost certain, but hey…. the economy must be collapsed if the Build Back Better, Green New Deal, agenda is to be fully implemented. WATCH:
Maybe this flippancy seems starker because those who consider themselves outside the collateral damage impact zone were not visible in prior generations. Perhaps it is because modern technology and the information era allows us to see conversations that were previously only described in print newspapers and journals. Whatever it is, the shameless disconnect between the unaffected rulers and the proles who have to live with the consequences are far more visible today than before.
Smiling while describing a future where working men are emasculated by their inability to support their families. Smiling and shrugging while explaining a landscape where moms are worried about how to feed their children, as the checkbook in the household creates a type of stress these ‘betters’ have likely never experienced, is almost psychotic in its detachment.
Desperation is not a good situation for any society.
Worse yet, laughing in the face of desperation leads to the type of outcomes that eventually hits the ‘betters.’
The federal reserve looks carefully at the Personal Consumption Expenditures (PCE) price index when weighting inflation data. The Bureau of Economic Analysis just released the PCE index for June [DATA HERE] and the results show a 6.8% increase in June from a year ago, the largest jump in four decades.
Wage growth in the second quarter (April, May, June) was generally strong, rising 1.6%. However, it now looks like the consumption index and the wage indexes are creating their own inflationary spiral. In addition to supply-side inflation, driven by Joe Biden’s energy costs, the labor costs are now increasing substantially which adds costs on the production side of the economy.
As wages go up to keep pace with supply side inflation, the prices of goods and services produced/handled by those workers also increases. This is the inflation spiral that can get out of hand quickly. The major concern (not necessarily expressed by pundits) is the inability of any institutional economic response to offset the originating inflation caused by the energy policy. The economic team is pretending supply-side inflation created by energy policy doesn’t exist. They are only directing attention to demand side inflation.
As long as energy policy keeps driving the price of electricity, gasoline and petroleum products higher, workers need higher wages. Those wage increases, while significant in scale, still lag the rising originating prices of the goods; and the wage growth adds to the final costs. Inflation then becomes structurally embedded, hyper-inflation begins. This looks like the current situation.
Hanover, a city in the northwest of Germany, has become the first major metropolitan area to try and reduce the use of natural gas by removing hot water from public buildings. The move comes as natural gas supplies from Russia are reduced to 20% of capacity. Germany is attempting to fill up storage facilities of natural gas in order to survive the winter.
Germany, together with several European countries, are telling their citizens to expect large increases in their electricity bills as energy costs continue to skyrocket.
Germany does not have any LNG terminals to receive shipments of natural gas into ports, they are dependent on pipelines from Russia. They are urgently trying to reduce the current amount of natural gas being consumed.
(Via Daily Mail) – […] Other desperate gas-saving measures include switching off public fountains and blacking out night-time lights on major buildings such as the town hall and museums. The city’s mayor, Belit Onay, spoke of an ‘imminent gas shortage’ that meant they had to reduce the city’s energy consumption by 15 per cent.
[…] There will also be a ban on portable air conditioners, heaters and radiators among the general populace as the average German begins to pay a price for standing up to the Russian dictator.
[…] Germany, like most of Europe, has been enjoying a hot summer which should soften the blow of the cold showers, but public officials are introducing the measures now in fear of what awaits them when the season turns.
Comrades, Secretary Janet Yellen reminds everyone how important it is to smile and support the policies of Dear Leader as they manage our overwhelming happiness through this period of exceptionally wonderful abundance.
The secretary reminds us that our “household finances are strong” and we have good employment to keep ourselves industrious and valuable on behalf of the state. WATCH:
The beet and potato harvest will provide soup for everyone, but only if we continue to do our best. All of the best comrade citizens are cheerful and happy.
There is less pretending in this segment, but the core of intent is still missing. As soon as Ms. Bartiromo can admit the monetary policy is specifically designed to create lower economic activity, she will be able to reconcile the policy conflicts which she still views as hypocrisies.
While not outlining the motive, in the segment beginning at 1:07 Ms Bartiromo does a good job outlining the current state of the economy. WATCH:
Comrades, prior to the Joe Biden economy the average American worker was earning 29 onions per hour. After, the Biden economic policies were put into place, the average American worker is now earning 11 onions per hour.
The great pretending continues in order to protect the Federal Reserve from sunlight upon them. Central banks (U.S. Fed Reserve included) are raising interest rates into a recession, which is specifically against their legislative mandate. Therefore, in order to protect the bankers, the pundits and politicians must deny a recession exists.
Pundit Steve Liesman spins the data, says we need to wait longer, and circles the wagons to protect the policy makers, specifically the White House. Mohamed El-Erian tries to split the baby (02:00 video); while not admitting directly that the economy is in a recession, he states the “economy is weakening much faster than expected.” WATCH:
At a certain point all of this pretending and denial is going to come crashing down. The “economic transition” to a new “green future” they are all pretending not to see as the root cause of the economic collapse, has unavoidable consequences.
The dam is breaking around them and they are running out of fingers and toes to stop the inevitable collapse. Meanwhile the Davos crowd has purchased all the scuba gear and awaits the final outcome.
Jumpin’ ju-ju-bones, CTH did not expect the BEA to admit the U.S. economy was in recession. CTH originally predicted the BEA would use lower import data as the primary tool to modify the GDP result.
Factually, in this report, import data -in combination with lower consumer spending- was the primary sector that led to the result. However, even with drops in the valuation of imports which lift GDP calculations, the economy still contracted.
Things must be much worse than officially admitted (details below), if the BEA is going to admit things are bad.
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 Bureau of Economic Analysis (BEA) released their first estimate of the second quarter GDP [Data Here] reflecting a 0.9% drop in U.S. economic activity. The second quarter contraction follows a 1.6% drop in the first quarter, which means we now have two consecutive quarters of declining economic activity, the technical definition of a recession.
The two primary data points which show the economic contraction are: (1) Lowered consumer spending; and (2) much lower imports as a result of lower consumer spending on durable goods and non-essential items. High Q1 inventories of goods were also flushed out by companies and not replaced. Starting with the consumer spending, here’s the data [Table-2, BEA report]:
Consumer spending, also called “personal consumption expenditures” declined 1.08% for goods overall in the second quarter.
Consumer spending represents two-thirds of all GDP in the United States. Americans buy lots of stuff, and when Americans stop spending on goods the economy stalls. As you can see in Table-2, consumer spending on goods dropped 1.08% and spending on services increased 1.78%. The net difference is 0.70%, a massive drop in consumer spending compared to prior quarters/years.
The next component with major impact is the result of the drop in spending.
Two weeks ago, CTH warned everyone that Joe Manchin’s torpedoing of the $500 billion Green New Deal senate spending program was a head fake; he was always going to sign up to expand the control of the federal government over energy use. Today Manchin and Chuck Schumer made it official.
The people operating the “energy transition” levers will get $370 billion to spend on bigger windmills, more solar panels and new energy programs to eliminate coal, oil and natural gas. They will pay for it by raising taxes and hiring a new army of IRS enforcement officials. In exchange for his vote, the federal government will pay increased health insurance subsidies for West Virginians and pass out lower priced medications.
There you go. Exactly as predicted. Energy inflation will continue as the energy transition becomes a permanent feature. Ironically, Joe Manchin made them change the name to “The Inflation Reduction Act,” and pushed the effective dates for all renewals past the 2024 election (where he plans to be a candidate against Gavin Newsom).
WASHINGTON – Joe Manchin and Senate Majority Leader Chuck Schumer on Wednesday reached a deal on a bill that includes energy and tax policy, a turnaround after the two deadlocked earlier this month in talks on Democrats’ marquee party-line agenda. In a joint statement, the two Democrats said the legislation will be on the Senate floor next week. It includes roughly $370 billion in energy and climate spending.
Imports are plummeting… should be a good thing… trade imbalance shrinks…. that lifts GDP calculations…. but the problem is…
The state of the U.S. economy is not as difficult as the ‘experts’ always claim. Simple business and checkbook economics always, always, tell you the future. You just have to be willing to accept things as they are, not as you would wish them to be. Let’s have an honest chat. We need it.
Remember, it was November 2021, and no one was paying attention but retail hiring was negative. The month before the 2021 Christmas holiday, when historically businesses would be adding people to their payrolls to support the increase in shopping, and retail businesses did no hiring. In fact, 20,000 retail jobs were LOST the month before Christmas. Retail sales had plummeted. That was a major flare, no one paid attention. Everyone was distracted with the Supply Chain crisis.
Then the fourth quarter 2021 GDP result came in at 6.9%, massively higher than the visible reality on Main Street. The reasoning was identified as a major increase in the value of inventories. While the Biden administration liked the GDP figure, the existence of the unsold inventory was another major flare. Add unsold inventory units to the massive inflationary value of those units (+8%) and you quickly see the +6.9% was bad news, not good news. Major increases in the value of goods have no value unless people are purchasing them. It wasn’t happening. Again, no one (except us) was paying attention.
Then the first quarter of 2022 GDP result came back with a negative 1.6% result. With high inflation those inventories were stagnant. The eight-percentage point GDP swing from the fourth quarter of 2021 to the first quarter of 2022 was another warning flare. Again, no one was truly paying attention. Retail sales -as measured in units purchased- had been in a contracting position since June of 2021, when the stimulus ran out. However, skyrocketing inflation was hiding lower unit sales.