With most financial media being intentionally obtuse with the Biden economic impact upon Main Street, it is refreshing to see analysis that cuts to the heart of the matter.  HatTip to ZeroHedge who provides a link to a great article outlining reality for blue and white-collar working families.

The folks at NerdWallet have taken the inflation date from the Bureau of Labor and Statistics (BLS) and applied the math to real life.  The result is a good encapsulation of checkbook economics and how the Biden economy is painful for the working class.

In total, Joe Biden’s energy policy driven inflation has added $961/month to preexisting expenses.  That’s $11,532 a year just to retain the status quo standard of living.

(NerdWallet) – […] In all of 2020, American households spent $61,300, on average. This number includes everything we spend our money on: housing, food, entertainment, clothing, transportation and everything else. In 2022, it stands to reach $72,900, a difference of more than $11,500 if consumers want to maintain the same standard of living. Keep in mind, this is an average, a number that represents an approximation across all Americans, but one that’s exact to a very few. Those who earn (and therefore spend) more will see more dramatic dollar increases. Those who earn less may see less dramatic dollar jumps, but the impact of these rising prices could be more significantly felt. (read more)

If the average household spent $61,300 and inflation is adding $11,500 to the expense, that means we now have to spend 18.7% more just to maintain the current standard of living.  That average is in line with what we are seeing in the real world.

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Federal Reserve Chairman Jerome Powell announced another 75-point increase in federal interest rates today. This is the third consecutive 0.75 percentage point increase.  Additionally, Fed policymakers have pledged to continue raising rates as high as 4.6% in 2023.

While Powell walked through his reasoning to continue targeting inflation by lowering consumer demand, not once in any of his remarks did he mention energy policy driving up the cost of materials and goods.  The Great Pretending continues. WATCH:

The Fed chair is trying to manage the economic policy transition by reducing economic activity to match intentionally diminished energy supplies.  Lowering economic activity drops demand for energy. Unfortunately, as admitted by Powell on August 26, 2022, in Jackson Hole, this means a period of “some pain” for Americans as the central banks join together in an effort to lower consumption.  (more…)

Trying to survive current price increases in housing costs, energy costs, electricity costs, food and fuel costs has forced consumers to reevaluate purchasing decisions.  As consumer demand for non-essential items has collapsed, and as Americans dig deeper into their savings just to sustain current unavoidable expenses, major retailers are now cancelling Christmas inventory orders.

On one hand the leaders of large multinationals must pretend everything is splendid; after all, the only acceptable position they can articulate is to support interest rates being raised because demand is just too darned high.  lololol…  pretending.  But on the other hand – those same retailers are furiously trying to calculate how to avoid being stuck with billions worth of unsold inventory.

RetailWire – Walmart, Target, Macy’s and Kohl’s are among retailers that have recently said they are canceling some orders to better balance inventory levels, a replay of a strategy used at the start of the pandemic.

Other steps retailers are using to clear inventories as spending has slowed on some non-discretionary categories are employing markdowns and packing away products for the following year. The elevated inventory levels also reflect intentional over-buying to mitigate shortages and the easing of supply chain constraints.

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The statistics behind the energy impact upon the German economy, the largest economy in the European Union, are almost unfathomable in scale.  There is no way for the German industrial economy to continue with this level of price pressure.  Stick a fork in the current creation of German industrial products and exports, the inflection point of feasibility for continued production has been crossed.  They are done.

According to release statistics from the German economic ministry, energy prices in August were more than double the same period last year, up 139%.  The monthly increase was more than 20.4% higher than July.  Additionally, producer prices for electricity rose 174.9% compared with August 2021 and by 26.4% in a single month.

This jaw-dropping increase in energy cost has resulted in German manufacturing prices for industrial goods jumping 7.9% in August alone, with a year-over-year increase in the cost to manufacture goods at 45.8%.  That is the highest rate of price increase since Germany began recording their statistics in 1939.

BERLIN, Sept 19 (Reuters) – German producer prices rose in August at their strongest rate since records began both in annual and monthly terms, driven mainly by soaring energy prices, raising the chances that headline inflation will surge even higher.

Producer prices of industrial products increased by 45.8% on the same month last year, the Federal Statistical Office reported on Tuesday. Compared to July 2022, prices rose 7.9%, it added.

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I was asked recently, what I considered to be the biggest problem of the current moment, and how would I describe it to my future self.  My response was, we are living in an era of great pretending, and if you elevate yourself and pause its actually quite interesting to watch.

The pretending issue goes beyond politics, it’s everywhere.  Sure, there was always an era where reality was skewed in favor of one position or another by various groups, people and leaders, where denying the obvious was always odd.  However, this current state of our national and international disposition extends far beyond politics into almost everything.

A person would ordinarily expect to see cultural or social pretending as an outcome of political correctness.  Denying the underlying social construct behind the rules of the urban society has been the norm for several years.  However, the pretending has become so pervasive it has recently extended into finance and economics; places where reality -actual outcomes- used to inoculate facts and figures against pretense.

It is no longer uncommon, heck, it’s become almost standard in this new era, to see CEO’s, CFO’s and even entire boards of directors, maintaining a standard of pretense. It is quite weird to see it happening.

Yes, this era -for a host of reasons- has made delusion somewhat of a norm.

In the social sphere, cultural norms now claim men can have babies, people can choose their gender, labels and pronouns, and everyone else bears the responsibility to conform to the delusion.  While goofy, that part is somewhat a weird cultural phenomenon of this western era.   If we were not pretending people like AOC would have no career opportunities.

In the political sphere, the axiom of politics being downstream from pop culture is perhaps the reason the infection of pretense has overwhelmed congress and the professional bureaucracies of government.  The social pretending has metastasized from the federal level to the state level, and now we see efforts to counteract “wokeism” as a social priority for state and local leaders.   It’s weird to see so much time and effort being exhausted on combatting social pretense at every level.

But the more stunning development comes in the sphere of economics, where factual outcomes of transactions are matters of simple accounting.  A ledger of sales and profits would normally dictate whether a business was successful or failing, and in the bigger picture would show empirical evidence of the financial health of the community of customers who purchase goods and services.

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Joe Biden’s economic policies, mainly driven by excessive spending and the Green New Deal climate change agenda, are the origins of massive inflation.

In an attempt to diminish the outcomes of his energy policy, the Biden administration has been releasing oil from the Strategic Petroleum Reserve, in an effort to curb gasoline prices.  However, that process is about to end as the SPR is becoming dangerously low and will need to be replaced (more spending).

When asked about the current status of inflation during a CBS interview, Biden responds by saying it could be worse, citing the last two months where the SPR spigot has been running at maximum release.  WATCH (48 seconds):

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If you combine government use of energy policy, government regulation on individuals around that energy policy, and the self-interested need to control political opposition, you discover one of the most effective ways to control human activity is to control their finance.

Canadian Prime Minister Justin Trudeau gave us a great example of that when he weaponized the power of the Canadian government to target the protesting truckers and those who support them.  You might remember Trudeau’s government locked down bank accounts, froze assets, denied loans, blocked mortgages and generally confiscated the wealth and incomes of his political opposition without any due process; all because the people were challenging his totalitarian COVID dictates. {Go Deep}

Take those reference points as an overlay and now consider this undiscussed recent announcement from the Biden administration:

[White House] – President Biden often summarizes his vision for America in one word: Possibilities. A “digital dollar” may seem far-fetched, but modern technology could make it a real possibility.

A United States central bank digital currency (CBDC) would be a digital form of the U.S. dollar. While the U.S. has not yet decided whether it will pursue a CBDC, the U.S. has been closely examining the implications of, and options for, issuing a CBDC. If the U.S. pursued a CBDC, there could be many possible benefits, such as facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the U.S. within the international financial system. However, a U.S. CBDC could also introduce a variety of risks, as it might affect everything ranging from the stability of the financial system to the protection of sensitive data.

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“Gaslighting” is essentially a term used to describe an abuser continually lying to victim in order to make the victim misbelieve reality.

Economic “gaslighting” is a process of lying about the nature of true cause in order to continue advancing the abusive policy.

Combine the economic gaslighting with the historic leftist approach of pretending not to know things, and you get this dynamic on CBS Face the Nation today.  In this brief segment describing inflation, we see all the classic strategies deployed by ideological media.

First, notice they blame: (1) the pandemic recovery, (2) consumer demand, (3) Ukraine, and (4) a supply chain ‘muddle’.  Not only are these issues ridiculous, but none of them are the cause of supply side inflation.  Blaming “consumer demand,” which has transparently collapsed for the last year, is beyond nonsense.  WATCH, and also pay attention to the graphics they use to manipulate the audience:

The true cause of inflation, and yes that includes ‘global inflation‘, is the collective western economy jump into climate change energy policy known as “build back better.”  Stopping the use of oil, gas and coal as the source for cheap energy, has resulted in every element of the inflation they outline.

As an outcome of their ideology, the central banks of the western economies are now trying desperately to lower economic activity to reduce energy consumption.  The goal is to lower human activity to the point where windmills and solar farms can sustain it.  Everything else is pretending.

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You know that moment just before the tsunami hits, when the water is pulled out to sea?  Yeah, that.

Media are starting to realize what a destabilizing force ‘food insecurity’ can become as the pre-existing high prices are about to go even higher.

(WASHINGTON, Via The Hill) – […] the five items that have seen the largest year-over-year price increase based on the latest report from the Labor Department, and how much the price has changed: Eggs 39.8%, Margarine: 38.3%, Butter: 24.6%, Flour/prepared flour mixes: 23.3%, Olives, pickles, relish: 19.4%

Many of the items listed in the Consumer Price Index have seen prices rise by more than 15% compared to August 2021. That includes chicken (16.6%), soups (18.5%), cereals (17.4%), and milk (17%).

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Welcome to the new “democratic norms” in the industrialized west as Germany seizes the private assets of Russian owned energy company Rosneft; because oil refining is critical to fuel prices and German has just realized their vulnerability.

Within this new Build Back Better system, driven by the policies of western nations, it appears things are changing quickly.  Democracy or capitalism in Germany is now quickly dispatched, as socialism -state control- becomes the priority.

Heck, I’m old enough to remember when everyone decried China’s authoritarian economic model for doing the exact same thing as Germany (a few months ago).  But, well, we must pretend not to notice these things comrades….

(Reuters) – BERLIN, Sept 16 (Reuters) – Germany took control of a major Russian-owned oil refinery on Friday, risking retaliation from Moscow as Berlin strives to shore up energy supplies and meet its European Union commitment to eliminate Russian oil imports by the end of the year.

The economy ministry said it was putting a unit of Russian oil firm Rosneft (ROSN.MM) under the trusteeship of the industry regulator and taking over the business’ Schwedt refinery, which supplies 90% of Berlin’s fuel.

“This is a far-reaching energy policy decision to protect our country,” Chancellor Olaf Scholz told a news conference to present the government’s plans to put the Schwedt refinery under the control of the Federal Network Agency regulator. (read more)

Who knew economic security was national security?

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