The medical community has continued to say the Omicron variant, to the extent there is such a thing, is akin to a traditional head cold.  Symptoms include sniffling, sneezing, coughing and a stuffy head.  However, that said, the Omicron is also being used as a justification for shutting down human activity.

One way to look at the motives of Omicron as a tool to control behavior, is a method to stop travel, work, transportation services and other economic activity that involves the use of gasoline.  In essence, Omicron becomes a tool to target the demand side of higher gas prices.  If the proles would just stay home and lock down, then demand for energy would slow, and the citizens would not notice the negative effects of energy policy.

Enter Joe Biden today, to tell everyone the Omicron variant will fill up the hospitals with the unvaccinated and unboosted during a time when the winter cold and flu season generally does the same.  The White House fear mongering is in direct proportion to the drop in White House approval ratings. WATCH:

BIDEN – […] “Omicron has not yet spread as fast as it would’ve otherwise done and as is happening in Europe. But it’s here now, and it’s spreading, and it’s going to increase.  For unvaccinated, we are looking at a winter of severe illness and death — if you’re unvaccinated — for themselves, their families, and the hospitals they’ll soon overwhelm.” (read more)

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West Virginia Senator Joe Manchin appears to be done with the badgering and pressure over the Build Back Better legislation.

Politico reports the discussions between Senator Manchin and the White House are at a stalemate, with the White House saying “things are going poorly.”  Meanwhile, the New York Post is reporting that Manchin finally exploded on communist stenographers who have been continually hounding him for the past two months.

Senator Joe Manchin on Wednesday angrily shouted at reporters to go away — telling one, “You are bulls–t!” and “I’m done!” after he was peppered with questions about his reluctance to support President Biden’s mammoth social spending bill.

“I’m not negotiating with any of you, OK?” the West Virginia Democrat said as reporters followed him around Capitol Hill. 

Eventually Manchin added, raising his voice: “You guys, let me go. This is bulls–t. You are bulls–t! OK? I’m done! I’m done! God Almighty.” (link)

The communist guerillas never relent, they just modify their attack angles to keep pushing forward.

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Reuters is reporting on an interesting dynamic within the vaccine mandate as it pertains to Amtrak.  Reading between the lines tells us something very specific about this vaccine mandate that we have discussed here, and it’s starting to show.

The article itself points to how Amtrak is suspending their vaccine mandate as a result of the federal courts blocking enforcement of any mandate pending litigation.  From their perspective as a federal contractor, Amtrak is now in a position to cease the vaccine requirement until the legal issues are resolved.  However, there’s an element touched upon that needs to be considered.

First the article (the emphasis is mine):

WASHINGTON, Dec 14 (Reuters) – U.S. passenger railroad Amtrak said on Tuesday it will temporarily suspend a vaccine mandate for employees and now no longer expects to be forced to cut some service in January. In a memo seen by Reuters, Amtrak Chief Executive Bill Flynn said the railroad would allow employees who were not vaccinated to get tested.

Currently, fewer than 500 active Amtrak employees are not in compliance. Last week, the railroad told Congress it anticipated “proactively needing to temporarily reduce some train frequencies across our network” because of the mandate.

Flynn said 95.7% of Amtrak’s 17,000 employees are either fully vaccinated or have an accommodation — and including employees with one dose 97.3% of employees are in compliance.

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We said it was happening {Go Deep}, and it is.  Last month CTH put the preparation window at 60 days +/- depending on region.  That window is now around 30 days before the next spike in inflation shows up from cumulative costs snowballing throughout the supply chain. The “producer price index” is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate and Final.

The final product inflation rate in July (reported in August) was alarming at 7.8%. However, we warned it would get worse. The Bureau of Labor and Statistics (BLS) then released stunning price data for October [DATA Here], showing an even more dramatic 8.6% price increase in final demand. More intense warnings shared.

Today, we get the November BLS Result [DATA Here], and unfortunately the results are showing what was expected.  The cumulative costs of massive increases in energy prices are building into the supply at an astonishing rate.  The November data shows a rate of wholesale final goods inflation at 9.6%, the largest single month comparative rate increase in history.

The bureau even went back and revised/increased the August price index from 7.8 to 8.4 percent, and revised/increased the October figure from 8.6 to 8.8 percent.  The average monthly price increase is almost a full percent… every month.  It looks like the BLS backward revisions are an attempt to smooth down the rate of increase.

(BLS) – “The Producer Price Index for final demand increased 0.8 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.6 percent in each of the 3 prior months. (See table A.) On an unadjusted basis, the final demand index rose 9.6 percent for the 12 months ended in November, the largest advance since 12-month data were first calculated in November 2010.” (more)

I modified Table A (final demand product pricing), taking out some of the noise to make it a little easier to see the big picture of what is happening.

When you see the wholesale level of prices almost double the increase in consumer level inflation rate, you can predict that consumer prices will likely go even higher.  Future finished goods, at a retail level, will carry the current wholesale price increase.

Stuff costs a lot now… and because the inbound stuff to make the finished goods is still climbing in price…. stuff is about to cost even more.   You can see this in the inflation rate of intermediate goods which I have highlighted below.

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I’m not confident that Joe Manchin will ultimately hold the line on more spending; however, it is interesting that on the same day Manchin is reported to be casting doubt on more Joe Biden social spending {LINK}, the Washington Post published a hitjob on him around his family finances {LINK}.

Accepting there are no coincidences in politics, it would appear the intelligence agencies are firing a warning shot against Senator Manchin based on his financial connections to the West Virginia coal industry.

(New York Times) – WASHINGTON — Senator Joe Manchin III of West Virginia, the most prominent Democratic holdout on President Biden’s $2.2 trillion social safety net, climate and tax bill, cast fresh doubt on Monday on his party’s plans to speed the measure through the Senate before Christmas, saying he still had grave concerns about how it would affect the economy.

Mr. Manchin outlined his skepticism before speaking by telephone about the bill with Mr. Biden, a discussion that aides to both later characterized as positive. After the call, Mr. Manchin, who represents West Virginia, did not rule out the possibility of supporting the measure this month. He said that “anything is possible here” when asked about a vote before Christmas, and that he was still “engaged” in conversations with the White House.

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ABC/IPSOS are trying hard, very hard, to provide cover for Joe Biden. [IPSOS Release Here – pdf data Here]  However, even within what they call a “probability-based sample of pre-selected” Americans, aka “the knowledge panel“, the responses toward Joe Biden show a nationwide rejection of the White House occupant.

A heavily weighted sample of 28% support Biden’s efforts on inflation.  The rest of their pre-selected panel say he sucks.

Another weighted sample shows 36% think Biden is doing a good job on crime.  The rest of their pre-selected panel say no, Biden sucks.

(Via ABC) President Joe Biden is facing significant skepticism from the American public, with his job approval rating lagging across a range of major issues, including new lows for his handling of crime, gun violence and the economic recovery, a new ABC/Ipsos poll finds.

[…] More than two-thirds of Americans (69%) disapprove of how Biden is handling inflation (only 28% approve) while more than half (57%) disapprove of his handling of the economic recovery. 

[T]he survey also reveals weaknesses from Biden’s own party with only a slim majority of Democrats (54%) approving. Biden’s orbit is also hemorrhaging independent voters, with 71% disapproving of his handling of inflation.

[…] As the national murder rates see historic jumps, only a little more than 1 in 3 Americans (36%) approve of Biden’s handling of crime, down from 43% in an ABC News/Ipsos poll in late October. (read more)

The White House strategy to deny chaos created by their policies, and yet demanding that media report good things about Main Street collapsing, does not seem to be working.  Apparently, an overwhelming majority of Americans now believe what they see and feel for themselves.  (more…)

President Trump economic policy -vs- Joe Biden economic policy

When wages (blue line) are above inflation (red line) our income is growing, life is good and the working class has more disposable income to enjoy life.  However, when wages (blue line) are lower than inflation (red line) our income is shrinking, life is a struggle and the working class has less disposable income to enjoy life.

♦ Point One – Nothing happens accidentally. The road to a “service-driven economy” is paved with a great disparity between financial classes. The wealth gap is directly related to the inability of the middle class to thrive.

♦ Point Two – There is nothing of value behind the obtuse term “service-driven economy.” The multinationals are paying for this administration, just like they paid the Obama administration; paying for economic policy that advances their interests.  Congress goes along with the K-Street demands, because Wall Street is now the primary benefactor of legislative intent. Nothing about their effort is done with American interests in mind.

To go deep, keep reading.

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At the most troubling level, Joe Biden believes what people tell him to say for the reason they tell him to say it.  This reality underscores the reason why Barack Obama’s network selected Biden as their disposable front man in 2020.  Biden sounds convinced, because Biden is convinced.  He’s wrong, factually and fundamentally wrong, but he believes what he repeats in public.

The most painfully obvious examples of this dynamic are present when Joe Biden explains economic things based on what other people have told him.  The guy really is the modern personification of the naked emperor parading around to show off an invisible coat that he genuinely believes he’s wearing. The self-deception would be embarrassing except for the fact he is only deceiving himself; so people laugh…. but this is dangerous.

Questioned today about inflation, Joe Biden starts talking about his Build Back Better program.  It really is worth watching to see how oddly emphatic he is in the belief that if government pays for a thing (childcare, healthcare, prescriptions) the cost of that thing somehow mysteriously disappears.

Biden believes that if government subsidizes something there is no longer a cost associated with it.  He believes this.

Setting aside the historic fact/truth that anything government pays or subsidizes ultimately costs more, the real cognitive dissonance in Biden’s worldview is that any cost associate with a ‘thing‘ disappears if the government pays for that ‘thing’.   From that bizarre viewpoint, the disappearance of public expense for that government subsidized thing then creates “deflation”, or a lowering in overall prices.

This claim is abject nonsense.  Truly and genuinely batshit crazy nonsense.

Example.  According to Joe Biden’s talking point: if government pays for college education, the price of a college student’s car drops.  It doesn’t.  To make that claim is absurd in the extreme.   The college student may have more money to pay for a car if they are not paying for tuition, but the car itself doesn’t change in price.

A person may have more money to pay for groceries if they are not paying for childcare expenses, but the price of the groceries doesn’t change.   The inflation on the prices of products at the grocery store does not change just because some families no longer have daycare expenses.   But Joe Biden believes it does.   (more…)

Joe Biden may be celebrating his historic achievement in reaching an inflationary milestone previously set by Jimmy Carter, but the working class is paying the price for their economic stupidity.

The Bureau of Labor Statistics releases the November inflation rate today [DATA HERE] showing another rise in the annualized rate of inflation of 6.8 percent.  As you review the data, ask yourself this question: ‘Is there anything in the current economic landscape to indicate this is going to stop?’  The honest answer is no.  Here’s why…

As the BLS accurately (albeit briefly) notes, their inflation data reflects the cumulative increases in costs of products and services at all stages in the supply chain.  Raw materials cost more (extraction, regulation impact), processing costs more (energy impact), transport costs more (fuel impact), final goods assembly costs more and handling costs more.  From field-to-fork or mining-to-showcase, the total cost to create stuff costs more. [AP Interactive Chart]

Yes, the inflation data is backward looking. Meaning, it is looking back toward the previous period to compare costs.  However, despite the White House protestations to the contrary, that’s not a good thing, because it is going to get worse.

The contracted price for goods delivered (depending on sector) are net terms in 30, 60 or 90 days.  Meaning, the purchase price on final goods wholesalers are receiving now, were agreed upon months ago.  Those terms for current arriving goods are no longer valid.  The new terms (purchase orders) carry higher costs, and as an outcome higher prices to consumers are still coming.

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In the aftermath of the White House demanding that media pundits put a positive spin on economic news, the National Economic Council Chairman, Brian Deese, appears at the Brady Room podium today [Full Video Here] to put the finishing touches on their Potemkin village of economics.

The statistics cited by Deese were jaw dropping in the level of spin used to create them.  First, the economic council cite their own national employment forecasts for economic recovery (under their ‘American Rescue Plan’), then celebrate they are ahead of schedule for a timeline they created.

When asked about inflation, Deese then proclaims he is not going to get into the business of economic predictions; which the media just accept without reminding him that his economic policies are entirely based on his own predictions… which he just cited in the prior moment of self-congratulation.  Additionally, according to Deese (without any citation to demonstrate validity for his claim), the NEC Chairman says “real household income” is at its pre-pandemic level; which seems highly unlikely given the scale of inflation.

When asked if inflation will continue into next year, Deese refused to answer the question.  Keep in mind, the discussion of inflation is a percentage of change from a previous price 12 months earlier.  If an item doubles in price this year (from $2 to $4), and then goes up to $4.50 in the following year, you can claim that inflation is dramatically decreasing.  However, that does not mean prices will ever return to the prior level, or that the next year price is any more affordable.  WATCH:

The fact remains that White House energy, regulatory, fiscal and monetary policies are devastating for Main Street.  All of those policies impact the domestic economy with increased costs from field to fork.

Cumulatively, all of the White House economic policies are increasing housing costs, transportation costs, medical costs, food costs, retail costs and service costs.  At the same time, wages are only modestly rising to keep up with those massive cost increases.  No amount of spin is going to stop the reality of the inflation storm from hitting U.S. consumers.

As we shared during the Obama-era baseline budget spending and deficit mess: “Half of something you just quadrupled is not less than you started with.”

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