The U.S. government does not operate in a vacuum without knowledge of what is happening and a solid perspective on what is likely to happen.  Whether they listen to the commonsense advisors, or whether the control officers intentionally keep counter positions away from the principle, is another matter; however, the officials generally know what is most likely to happen.

The White House put Port Envoy John D. Porcari, who is also intricately involved in the supply chain taskforce, on the podium today to discuss supply chain issues.   The full video of his remarks is posted below, but my spidey sense is telling me they know what we know, and they are starting to prepare for what will ultimately become impossible to ignore.  WATCH:

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It’s not just a port issue, as we have discussed on these pages, the interventionist policies and regulations from the people creating the COVID response (writ large) have been fubar from the beginning. {Go Deep} When they shut down the restaurants and hospitality sector (2020 lockdowns), the advisors and bureaucrats triggered a cascading series of events inside the food supply chain.

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The Bureau of Labor Statistics (BLS) released the November job openings and turnover data today [DATA HERE] showing 370,000 workers quit their jobs in November bringing the quits rate now to 4.5 million people.

From the report, “Quits increased in several industries with the largest increases in accommodation and food services (+159,000); health care and social assistance (+52,000); and transportation, warehousing, and utilities (+33,000).”

Over the 12 months ending in November 2021, hires totaled 74.5 million and separations totaled 68.7 million, yielding a net employment gain of 5.9 million for 2021. However, while the unemployment rate drops with fewer people working, the employment picture overall appears to be tenuous.

The FRED personal savings rate for Americans overall [DATA HERE] has been dropping rapidly since March 2021, the last federal COVID employment bailout injection. All of the federal assistance has created massive data skews in the savings rate, as federal subsidies gave an artificial boost to the U.S. savings rate.

It appears that the aggregate American worker is now using their savings, created by COVID bailouts, to offset the massive inflation created by the COVID bailouts.  The net result is a workforce going into negative savings each month as inflation driven expenses (energy, fuel, food) are higher than earnings.  This is an unsustainable situation.

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You might remember on October 13, 2021, Joe Biden delivered widely carried remarks about specific actions his administration was taking to increase operations at the Port of Los Angeles (POLA) and the Port of Long Beach (POLB).

Here we take a closer look at the claims since the original announcement, and then highlight the actual results from the ports.  The port operations are actually doing worse today than they were in October. They are less efficient, less productive and have offloaded less freight in November than they did in October.  The factual results are exactly the opposite of the administration claims.

The October 13, 2021, White House fact sheet is HERE, “announcing a series of public and private commitments to move more goods faster, and strengthen the resiliency of our supply chains, by moving towards 24/7 operations at the Ports of Los Angeles and Long Beach.”  On November 17, 2021, the White House gave an update, “Recent Progress at Our Ports: Moving Cargo and Filling Shelves” and claiming the increased hours of operations were delivering on the White House expectations of increased productivity and offloading capacity.

Throughout these past 11 weeks, Joe Biden, Kamala Harris and Transportation secretary Pete Buttigieg have been claiming their supply chain task force has been successful in generating exceptional results and removing the backlog at the ports, specifically the ports of Los Angeles and Long Beach.  However, if we look at the actual records from both ports, we find exactly the opposite:

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Hopefully everyone has done their preparatory diligence and are well situated to assist their family, because prices on fast turn consumable goods (groceries) are now less than 30 days from entering exponential increase phase.  CTH has been counting down the days to impact as the contract terms of 30, 60 and 90 days have begun expiring.

The Wall Street Journal has seen the first pricing notification memo from Kraft-Heinz food group to the buying offices of major U.S. retailers.  Here’s how the WSJ presents it: “Kraft Heinz Co. told retailer customers that it would raise prices across many of its products including Jell-O pudding and Grey Poupon mustard, with some items going up as much as 20%, according to a memo viewed by The Wall Street Journal.”  VIDEO:

Keep in mind a few points:

(1) The outlined price increases noted are against current price terms and contracts.  Meaning, these are price increases from right now to the next fulfillment.  These are not inflation price increases which are compared to a year ago.  These are 5% to 20% increases from the current price right now.

(2) The price increases are not the final price increase.  This is the price of a contract today from the field to the distribution center.  The retailer also has additional price increases (transportation, energy, labor, etc) which they need to add to the wholesale price before you see the final price at retail (grocery store).

The final field to fork price is not yet known but will be higher than noted above.  We are only seeing the notifications from field, through processing and into warehousing and distribution.

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A series of Freedom of Information Act (FOIA) filings into the Dutch government has resulted in rather revealing letters showing the motive of the World Economic Forum, an assembly of multinational banks and corporations, summoning government leaders.

[SOURCE]

Notice how they are using the words “shaping policies for the post-COVID-19 era“?

The World Economic Forum, a collection of corporations, “shaping” government “policies.”

Why does this matter?  Well, fascism was traditionally defined as an authoritarian government working hand-in-glove with corporations to achieve objectives. A centralized autocratic government headed by a dictatorial leader, using severe economic and social regimentation, and forcible suppression of opposition.

That system of government didn’t work in the long-term, because the underlying principles of free people reject government authoritarianism.  Fascist governments collapsed, and the corporate beneficiaries were nulled and scorned for participating.  Then, along came a new approach to achieve the same objective.

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The Commerce Department November retail sales data was release today [DATA HERE] – [DETAIL pdf HERE].  The top line issue is a shocking drop in retail sales for November in key categories that align with previous discussion of inflation spending priorities for all U.S. consumers.

Before getting to the data, one point is critical to remember.  The commerce department sales figures are based on dollars spent. This point is important, because the items being purchased have inflation within them.  When prices are higher due to inflation, sales figures should be higher due to higher prices.  Ex. If there is an 8% increase in retail price, but only a 4% increase in retail sales, that means less stuff is being sold.  [Less units sold at a higher price gives the illusion of an increase in sales.]

Despite the start of the traditional holiday sales and shopping period, the total sales growth in November was 0.3% over October [Column A].  Factoring in inflation during the same month to month comparison at 0.9%, you can tell that overall in November there was a drop in units sold across the total of retail sales outlets.

A drop in sales at a time when holiday shopping should be taking place is concerning.  However, the sales reality aligns with the employment data last week showing a drop of 20,000 workers in the retail sector for November.  Put them together, and the picture shows retailers did not need employees, because consumers are not spending.

If we look deeper into the November sales figures, we can see that a contraction in discretionary spending is the primary issue. Electronics (-4.6%), Department Stores (-5.4%) and even online sales at ZERO.  We can also see a direct correlation in comparative inflation impact within the sales data for November 2021 when compared to November 2020 [Column B].

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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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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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Tesla CEO Elon Musk was seemingly channeling his inner Galt during a video interview with Joanna Stern of the Wall Street Journal at the CEO Council Summit.  Apparently Mr. Musk can see what’s on the other side of this spending horizon and doesn’t want to experience it.  WATCH:

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The Full Interview is below:

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Many Americans have no idea that Russia is an OPEC member.  Even fewer recognize that Russia’s primary economic export is energy via oil and gas.  Oil and gas exports drive the Russian economy.  Any U.S. policy that drives up the value of oil and gas directly enhances the economy and influence of Russia.

Thanks to Joe Biden’s specific energy policy shutting down U.S. energy exploration, Russia’s economy is booming and has made billions more in the sales of high priced oil and natural gas into Europe and the global marketplace.  That increased oil and gas revenue is directly responsible for Russia’s ability to expand militarily in the region.

So when it comes to threats, like Russia annexing even more of Ukraine as a strategic objective…. Joe Biden is strengthening Russia on one hand and threatening the strength of Russia with the other.  Russian President Vladimir Putin sees this with clear eyes.

Meanwhile the NATO partners who *claim* to be worried about Russia (they’re really not) are the same nations that are buying the oil and gas from Russia.   This was the ridiculous economic dynamic President Trump confronted when he challenged NATO on their energy and national security policies.   Tucker Carlson discusses this:

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