U.S. inflation was/is driven by supply side impacts as a result of policy (Build Back Better).  The U.S. recession was/is now driven by demand side impacts that are the result of increased supply side costs.  This is the natural economic truth being denied by all levels of political leadership.

Joe Biden policy makers, specifically the U.S. treasury secretary and the federal reserve chairman, have claimed -falsely- that current inflation was/is being driven by demand. In essence, and ironically, their position means consumers are to blame for high prices.  This has been their story and they have stuck to it.  However, remember monetary policy can only impact the demand side of the economy.  Monetary policy cannot impact the supply side, that aspect is led by Joe Biden policy.

The Federal reserve, having denied (pretended) the supply side causation, has effectively raised interest rates (0.75%) into an economic environment where consumer demand was already contracting.  CTH has been asserting this fundamental position all year.   Here is the evidence:

US Manufacturing PMI fell dramatically to 52.4 in June 2022 from 57 in May.  This drop is well below the market and economic expectations of 56, and now points to the slowest growth and steepest drop in factory activity in almost two years.  Contractions in output and new orders are pushing the index down.

Production and new sales declined for the first time since the depths of the pandemic in mid-2020 driven by weak consumer demand.  Inflation and a drop in wholesale and retail purchases have lowered purchase orders.  The gears inside the economy are slowing to a halt.

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Yes, inflation is global; mostly.  That’s because all of the western governments and their central banks followed the exact same pandemic lockdown & spending instructions from the World Economic Forum.

The plan -as outlined publicly, was for government leaders to lockdown the economic activity (supply side), then spend to subsidize and fill the losses in economic activity (demand side), then reopen the economies using the Build Back Better agenda as a reset moving the underlying energy economy away from fossil fuels.

This was the collective plan, and they all followed the exact same playbook.  This is the origin of inflation.  The BBB plan disrupted the supply side, then triggered a reopening of the demand side while the supply remained scarce.  Simultaneous to the reopening, all former energy development processes were no longer supported by investment or policy.

In the aftermath, the energy sector was fractured and combined with higher costs for the production of all goods, that’s what is continuing this upward inflation spiral.

CANADA – Canada’s annual inflation rate accelerated to 7.7% in May, the highest since January 1983, on gasoline prices, as well as services like hotels and restaurants, Statistics Canada said on Wednesday.  Analysts polled by Reuters had expected the annual rate to rise to 7.4% in May from 6.8% in April. (read more)

U.K. – Soaring food prices pushed British consumer price inflation to a 40-year high of 9.1% last month, the highest rate out of the Group of Seven countries and one which underlines the severity of the country’s cost-of-living crunch.

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… And if they don’t, they are Russian sympathizers.

Delivering remarks from the stage built next to the White House, earlier today Joe Biden demanded that congress and states suspend gasoline taxes for 90-days in order to offset the massive price increases his energy policy has created. {Transcript Here} Additionally, Biden says any political opposition to his demand means his opponents support Russia:

“for all those Republicans in Congress criticizing me today for high gas prices in America, are you now saying we were wrong to support Ukraine?  Are you saying we were wrong to stand up to Putin?  Are you saying that we would rather have lower gas prices in America and Putin’s iron fist in Europe?  I don’t believe that.” {Direct Rumble Link}

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It will be worth watching how California Governor Gavin Newsom responds to this instruction.  California has the largest gasoline taxes in the nation and uses them to fund the majority of their left-wing policies.

Full video and transcript below.

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The conflict of interest is simply off-the-proverbial charts here.   Tom Donilon is a deep DC swamp operator and has been for his entire career.  Donilon is connected to every tentacle of the Obama and Biden administrations.  Donilon is also the Chairman of the BlackRock Investment Institute.

We have written about the conflicts {Go Deep Here} and {Go Deep Here}, but this move by Secretary of State Anthony Blinken is stunningly fraught with serious conflicts of interest.

Tom Donilon’s literal job description at Blackrock is to “leverage the firm’s expertise and generate proprietary research to provide insights on the global economy, markets, geopolitics and long-term asset allocation,” and the State Dept has just appointed him as Co-Chair of the U.S. foreign policy advisory board.

Specifically, the Biden administration has just put Blackrock Investment Institute Chairman Tom Donilon in charge of U.S-China policy.

How in the proverbial hell can this be permitted?  That’s way beyond a rhetorical question.   The Dept of State has selected a team of Wall Street control agents to guide global U.S. policy.

(STATE DEPT) – Today, Secretary Blinken announced his selections for the U.S. Department of State’s Foreign Affairs Policy Board.

Since its establishment in 2011, the Board has provided independent advice on the conduct of U.S. foreign policy and diplomacy, consistent with each Secretary of State and administration’s evolving priorities for it.

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Federal Reserve Chairman Jerome Powell admitted the obvious in his senate testimony today when asked about U.S. inflation.  However, his testimony directly contradicts the White House claims.

Senator Bill Hagerty (R-Tenn.), member of the Senate Banking Committee, walked through the inflation timeline and asked Chairman Powell about the cause of the escalated inflation in 2021.  Powell admitted the massive rise in inflation had nothing to do with the Russian invasion of Ukraine. WATCH (02:16 Prompted):

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Reuters has an interesting, albeit sad article, highlighting the state of the U.S. and global economy.  According to the article, many college graduates this year are finding their recent job offers rescinded as the landscape for employment quickly evaporates.

The article focuses on the tech sector with various platform companies yanking the jobs.  Twitter, Meta (Facebook), Lyft and Uber are all mentioned as downsizing, freezing current employment and/or leaving positions unfilled.

(Reuters) – […] In what appears to be a counter trend to the Great Resignation of 2022, when legions quit for new jobs, some tech job-seekers now face cost cuts and hiring freezes amid four-decade-high inflation, a war raging in Ukraine and the ongoing pandemic.

In the case of those who were poised to join Twitter, the whims of billionaire Elon Musk have also caused stress. Musk has agreed to buy Twitter for $44 billion, but his recent tweets have raised questions about when and if the acquisition will be completed. 

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There are going to be multiple negative economic indicators surfacing in the next 60 days as the first wave signals of a deep and prolonged recession begin to reach shore.  Think of it like an economic meteor that hit the mid-Atlantic while only a few people were tracking its inbound trajectory and prepared for what was likely.

We are not likely to see much good economic news, but on the positive side, most readers are prepared.   Again, I will repeat… If you did not purchase a home this year, you are already ahead financially.

Housing sales are dropping fast, but housing values are, on a regional basis, holding steady – for now.  However, the banks and lending institutions are preparing for those values, and the contained equity, to drop and disappear precipitously.

Today Bloomberg is reporting that JPMorgan Chase is shifting around 1,000 employees in the mortgage side of finance with some being laid-off and others being reassigned to different parts of the bank and financial services.   This should not come as a surprise, but it does align with other less noticeable moves in the banking and home loan sector.

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The current White House Press Secretary, Karine Jeanne-Pierre, is hopelessly over her head and does not possess the intellectual or professional skills to articulate clear policy or answer questions.  Her professional inability is brutally obvious, yet political correctness dictates everyone is supposed to pretend not to notice.  In a weird way she is a perfect representation of the Biden White House.  Jeanne-Pierre is the Kamala Harris of Hank ‘tippy guam’ Johnsons.

That said, the White House is using former Pentagon spokesperson, and current National Security Council Coordinator for Strategic Communications, John Kirby, as a crutch to support Jeanne-Pierre until enough time passes and the permanent switch can take place without backlash from the media and left-wing cultural police.   Narrative engineering is a tenuous business and relies upon media pretense to continue.

With the shortage of infant formula still visible as an example of Biden incompetence, today the White House began selling a proactive strategic communication message in advance of looming food shortages.  {Direct Rumble Link} Yes, you guess it, the advanced position of the Biden administration is that the future U.S. food shortages are Vladimir Putin’s fault.

Apparently, Russian President Vladimir Putin has the ability to drive up U.S. inflation, explode U.S. energy costs, increase gasoline prices, influence global agriculture, weaken U.S. oil refining capability, disrupt availability of diesel fuel, impede the transportation of U.S. goods, force municipal energy companies to raise prices, cancel airline flights, stop the manufacturing of infant formula and now block the production -and increase the cost- of food in North America.

It’s worth noting how John Kirby says NATO and the western allies can deliver thousands of tons of heavy weapons and arms into Ukraine from western Europe without issue; however, the western allies cannot get thousands of tons of grain and foodstuffs out of Ukraine.   I digress.  The propaganda around World War Reddit is remarkable.

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Kaliningrad is an enclave of Russia on the Baltic Sea, with a population of around 450,000 Russians.  Kaliningrad is surrounded by NATO countries Lithuania to the north and Poland to the south.

Land access for Russia to Kaliningrad is a matter of treaties between Russia and Lithuania providing transit to the Russian enclave through Suwalski gap where railroads connect Kaliningrad to Belarus.

In an intentionally provocative move, the NATO alliance has now decided to use Lithuania to cut off access to Kaliningrad by land.  The NATO alliance is saying this is part of their execution of economic sanctions against Russia by stopping the transport of goods and products through the Suwalski gap.

The blockade began today, and the Russian government is evaluating how to respond to this aggressive effort against Kaliningrad.

This action is being taken as the same time as EU NATO countries are threatening to rush NATO membership for Ukraine into place.  There is no other way to look at this decision by NATO member states as anything except a deliberate effort to increase the likelihood of war between Russia and the western alliance.

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The French parliamentary elections were held Sunday and delivered a surprising result for Marine Le Pen’s Rassemblement National party.   The RN won 89 seats, far beyond what would be needed (15 seats) to have a consequential impact in the assembly.

FRANCE – […] The results would severely tarnish Mr. Macron’s April presidential election victory where he defeated the far-right to be the first French president to win a second term in over two decades. 

The expected number of seats for Marine Le Pen’s Rassemblement National (90) amounts to a historic breakthrough. Only once under the Fifth Republic had the far right passed the threshold to form a group in the Assemblée (15 MPs), which allows for certain parliamentary resources and prerogatives.

The only time this happened was in 1986, when Ms. Le Pen’s father Jean-Marine Le Pen led a group of Front National MPs for two years. They were elected in the only ever legislative elections using proportional representation.

[…] Falling short of the majority forces Mr. Macron into tricky partnerships with other parties on the right to force through legislation.  There could now potentially be weeks of political deadlock as the president seeks to reach out to new parties. The most likely option would be an alliance with Les Republicans LR.

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