Historically, Stocks tend to soar in years when inflation is falling. But typically, inflation doesn't fall until the fed-funds rate rises above the current inflation rate... The last data we have as of this writing is that inflation was 6.45% in December, and the FED funds rate was 4.1%. That is still a significant gap. But inflation is already falling. Monthly inflation began a dramatic slowdown last July. Monthly inflation has fallen by 80% over that timeframe (bringing annual inflation down by 33%). At this point, the majority of our annual inflation occurred during the first six months of 2022. January through June of 2022 had an average of 1.02% inflation per month. The second … [Read more...]
Why the Fed Is Bankrupt and Why That Means More Inflation
In 2011, the Federal Reserve invented new accounting methods for itself so that it could never legally go bankrupt. As explained by Robert Murphy, the Federal Reserve redefined its losses so as to ensure its balance sheet never shows insolvency. As Bank of America’s Priya Misra put it at the time: As a result, any future losses the Fed may incur will now show up as a negative liability (negative interest due to Treasury) as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible. That was twelve years ago, and it was all academic at the time. But in 2023, the Fed really is insolvent, although its fake post-2011 account doesn’t show this. … [Read more...]
Inflation Falls Again in December
The Bureau of Labor Statistics reported that Annual Inflation fell from 7.11% in November to 6.45% in December 2022. This was down from a peak of 9.06% in June 2022. Monthly inflation was negative (Disinflation) for November at -0.10% and December at -0.31%. This is fairly typical for the fourth quarter, which is traditionally negative. Monthly inflation for 2022 was lower than in November 2021, so December Annual inflation fell. It is important to remember that although the inflation RATE is falling... prices are still going up, i.e., prices are still 6.5% higher than they were a year ago. A decline from 7.5% to 6.5% is similar to a car going from 75 mph to 65 mph... it is still … [Read more...]
Inflation Down in November
The Bureau of Labor Statistics reported that Annual Inflation fell from 7.75% in October to 7.11% in November 2022. This was down from a peak of 9.06% in June 2022. Monthly inflation was negative (Disinflation) for November at -0.10%. This is fairly typical for the fourth quarter, which is traditionally negative. Monthly inflation for 2022 was lower than in November 2021 so Annual inflation fell. It is important to remember that although the inflation RATE is falling... prices are still going up, i.e., prices are still 7% higher than they were a year ago. A decline from 7.75% to 7.11% is similar to a car going from 77 mph to 71 mph... it is still speeding forward just not quite as … [Read more...]
Can Businesses Really Set Any Price They Want?
There is a common belief that a company can arbitrarily pick any price it wants for its products and then make obscene profits. And while it is true that a company is certainly free to set its prices, that doesn’t mean that consumers have to pay them. There are a variety of other factors at play. Does the company have a monopoly? How long would it take for the competition to gear up and start producing a competing product? How much demand is there for this product? How desperately does the consumer want/need this product? How expensive is it for the competition to get started? Is the monopoly due to a patent, government fiat, or temporary supply disruption? And many others. In the … [Read more...]
Annual Inflation Retreats in October
The Bureau of Labor Statistics reported that Annual Inflation for October 2022, fell from 8.20% to 7.75% Monthly inflation at 0.41% was still very high for a month in the fourth quarter, which is traditionally negative or at least very close to zero. But although high, October 2022 monthly inflation was still lower than in October 2021. So… Annual inflation for the 12 months ending in October 2022 fell to 7.75%. This was down from 8.20% in September 2022. Inflation Summary: Annual Inflation fell from 8.20% to 7.75% CPI Index rose from 296.808 to 298.012 Monthly Inflation for October was 0.41% Next release is December 13th October Annual Inflation was 7.75%. Jan. … [Read more...]
August 2022 is Actually Disinflationary
The Bureau of Labor Statistics reported that in August, Annual Inflation fell from 8.52% to 8.26% Inflation Summary: Annual Inflation fell to 8.26% from a peak of 9.06% in June CPI Index fell from 296.276 to 296.171. Monthly Inflation for August was -0.04% Next release October 13th August 2022, Annual Inflation was 8.26%. Jan. 2021 -- 1.40% | Jan. 2022 -- 7.48% | Feb. 2022 -- 7.87% | March 8.54% | Apr. 2022 --8.26% May 2022 -- 8.58% | June 2022 -- 9.06% | July 2022 -- 8.56%% | August 2022 -- 8.26% BLS Inflation Report: According to the BLS Commissioner: "The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in August on a seasonally adjusted basis … [Read more...]
Everything They Tell You About Inflation is Wrong
In today's article, J.R. MacLeod looks at the effects of inflation, the fraud it perpetrates on the population, and who benefits and who loses from inflation. He also shows that "Inflation is not necessary for real wealth and real growth... inflation is completely unnecessary for a growing and prosperous economy". ~Tim McMahon, editor Inflation, the Price Level, and Economic Growth: Everything the Elites Tell You about It Is Wrong Fundamentally, inflation is fraud. The central government or bank printing more money lessens the value of the money already in circulation. A truckload of sand isn’t particularly valuable in Saudi Arabia. An increased supply of money means that ultimately prices … [Read more...]
Will Corn Prices Drive Up Inflation?
Corn prices peaked in April and began coming down in May, June, and July... but all that may be over. According to Bloomberg corn prices may be set to drive up inflation. Recently they've been running a series of articles on Corn Prices: Their article US Crop Tour Stokes Fears of Looming Corn Shortage says, "Parched soils. Grasshopper infestations. Scorching heat. Hail damage. This year’s US corn crop has been put through the wringer... Things are so bad that scouts currently on a four-day tour through the Midwest are finding plants that are stunted and browning. Scores of fields have visible damage from pests. Cobs of grain are unusually small, and sometimes, stalks aren’t producing the … [Read more...]
Gas Prices Fall, Bringing Down July 2022 Inflation
The Bureau of Labor Statistics reported that in July 2022, Annual Inflation fell from 9.1% to 8.52% Inflation Summary: July 2022 Annual Inflation fell to 8.52% CPI Index declined slightly from 296.311 to 296.276 Monthly Inflation for July was -0.01% down from 1.37% in June. The next release is on September 13th July 2022, Annual Inflation was 8.52%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% ** March 8.54% Apr. 2022 --8.26% ** May 2022 -- 8.58% ** June 2022 -- 9.06% ** July 2022 -- 8.56%% Crude Oil prices averaged over $107.10 per barrel for June and averaged $93.12 in July. While according to the AAA, Regular Gasoline prices averaged $4.99 … [Read more...]
