Even More Stag, Extra Flation

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Hawkeye
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Even More Stag, Extra Flation

Post by Hawkeye »

Breitbart Business Digest: Even More Stag, Extra Flation

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Please do not shoot the messenger.

Yesterday we warned that there was a good chance analysts were underestimating how much inflation and high gas prices were dragging down consumer sentiment, creating the potential for a downside surprise to today’s consumer sentiment number. Combine that with a worse-than-expected inflation print, and you will set the stage for renewed fears of stagflation.

This is exactly what happened. Consumer sentiment crashed to its worst level ever, falling below the previous low-water mark hit way back in the spring of 1980. The Consumer Price Index (CPI) came in much hotter than expected, with prices rising at the fastest annual rate since 1981. Stocks sold off, with the Dow Jones Industrial Average falling by 880 points, the Nasdaq Composite tanking 3.5 percent, and all 11 sectors of the S&P 500 declining. Walmart, whose shares are down more than 15 percent year-to-date, was the only Dow component to rise for the day, squeezing out a half a point gain.

This no doubt has the Democrats in a state of panic. The last time consumer sentiment was close to this low, voters threw Jimmy Carter out of office. In the 1980 election, Carter won just 40.1 percent of the popular vote, the worst performance for an incumbent president since Herbert Hoover lost to Franklin D. Roosevelt in 1932. Republicans took control of the Senate for the first time since 1955. The Democrats managed to hold on to the House but only thanks to so many of their members running as conservative “Boll weevil” candidates.

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President Jimmy Carter dropped by a meeting of business leaders in Washington on March 29, 1979, asking their help in controlling inflation. From left to right: Willis Alexander of the American Bankers Association, Carter, and Tom Murphy of General Motors. (AP Photo/Dennis Cook)

The setup in 1980 was pretty similar. The Federal Reserve, led by chairman Paul Volcker, was attempting to bring inflation under control by tightening financial conditions. This pushed the U.S. economy into a six-month recession in 1980 and a longer one in the summer of 1981 that stretched nearly to the end of 1982.

The CPI report out today effectively extinguished an that idea we’ve been warning against for months — namely, that inflation had peaked in March. Headline CPI jumped one percent month-over-month in May, well above the consensus expectation of a 0.7 percent increase. Food prices were up 1.2 percent from April. Energy prices were up 3.9 percent on record gasoline prices. The CPI year-over-year figure of 8.6 was the highest in over four decades.

President Biden said on Friday that there were signs that inflation was moderating once you look past food and energy. Economists refer to inflation excluding food and energy as “core inflation,” which is odd since it excludes two of the core expenses of most American households. In any case, there was actually very little sign of moderation. On a month-over-month basis, core inflation rose 0.6 percent—exactly as it had in the prior month. This was higher than the 0.5 percent penciled in. Core inflation was down year-over-year but only because of “base effects.” That is, we’re now comparing prices against the high inflation prices of last year.

There were really no signs of inflation fading or peaking in the report. While prices of appliances declined for the second consecutive month—which is what you would expect given the crash in consumer sentiment—core services prices surged 0.6 percent. Rent jumped 0.6 percent month-over-month and is up 5.5 percent from a year ago. Rent tends to both be a lagging inflation indicator and a particularly sticky one, so there’s probably more rent increases coming. Recreational services prices jumped 0.5 percent. Medical services were up 0.4 percent. Airfares soared 12.6 percent.

In short, the May inflation does not look like the result of “Putin’s price hike” or even supply-chain disruptions. Inflation is being driven by consumer demand pumped up by a legacy of stimulus–monetary and fiscal–and fueled by a red hot labor market. This means that the Fed will likely have to push harder to bring down prices. So prepare yourself for a lot of talk about whether the Fed will need to hike 75 basis points in September. The idea of a pause after two 50-point hikes is dead.

https://www.breitbart.com/economy/2022/ ... a-flation/
The best part about this is waiting four years to see how all the crazy apocalyptic predictions made by the fear mongering idiots in Right Wing media turned out to be painfully wrong...Gasoline would hit $10/gallon. Hyperinflation would ensue.
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Re: Even More Stag, Extra Flation

Post by Vēritās »

Republicans have been predicting inflation woes during Democrat Presidencies for many decades now. The irony is that after fifty years it finally happened, and it was caused mostly by a Republican.

Listening to economic experts on the Right, I agree that inflation is caused primarily by an exponential increase in money supply. If only there were some way we could measure the money supply in the economy so we can see when it starts. :roll:
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Biden took office in January 2021, well after the money supply had skyrocketed. Why did it quadruple under Trump? Well, for several reasons.

1. Trump’s money gusher began in 2017 with the $1.9 trillion tax cut that wasn’t matched with any spending cuts. The GOP didn’t sniff out socialism then, despite estimates that the Trump tax cuts increased the deficit by $3.9 trillion.

Seeking a compliant central banker, Trump, the self-styled “king of debt,” appointed Jerome Powell but quickly soured on him when he didn’t increase the money supply quickly enough for Trump’s taste. Powell was soon on the receiving end of Trump tweets. “Where did I find this guy, Jerome?” he asked in one of the milder tweets, but soon escalated to “No guts! No sense! No vision!” He argued that the “federal reserve doesn’t know what it’s doing,” adding “we need rate cuts and easing” (exactly the opposite of what we needed). If Republicans were worried about inflation, they might have spoken up about Trump’s attempt to flood the economy with easy cash.

Then came COVID. Most people think the big federal cash infusion, the $2.2 trillion CARES Act, was a necessary response to the emergency. It saved many from destitution. But that money, combined with the trillions of dollars of quantitative easing and near-zero interest rates over the past decade and a half, certainly set the stage for inflation. Congress passed an additional $900 billion in December 2020—which Trump signed—for a grand total of over $3 trillion in COVID relief.

Again, all of this money sloshed into the economy before Joe Biden took the oath of office.

The Fed, not the President, is responsible for regulating inflation, and Trump appointee Jerome Powell was constantly pressured to keep interest rates low. Trump Says Fed Should Cut Rates to ‘Zero, or Less,’ Attacks Jerome Powell Again

2. Trump's tariffs on imported goods from China.

This is from Forbes, September 2019:
Trump Tariffs Will Soon Cost U.S. Families Thousands of Dollars A Year

"Walmart, the biggest U.S. retailer, warned the Trump administration the newest round of tariffs on imported Chinese goods could prompt it to raise prices on products from shampoo to bicycles to food" https://www.cbsnews.com/news/walmart-Washington ... s-kick-in/

3. Immigration

Currently we're in one of the worst labor shortages we've seen in decades. This means companies are increasing wages dramatically, which translates to new money in the economy. The reason for the labor shortage is mostly COVID related but Trump's immigration policies have seen dramatic drops in both legal and illegal immigration in each year he's been in office.


The little fact no one is talking about is that the annual inflation rates for dozens and dozens of goods routinely purchased by American households - including food - were already at their highest levels in a decade before Biden entered the White House. https://www.reuters.com/world/us/republ ... 021-11-01/

For instance, in April 2020 gasoline averaged $1.94/gallon and that rose gradually to $2.60 by February 2021. So the inflation for gasoline was 34% in Trump's final year. https://www.statista.com/statistics/204 ... ince-2009/

Lumber is another important commodity that had already experienced a record increase in value just prior to the pandemic. It more than doubled in Trump's first two years before doubling against in his final year.
lumber.png
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So Republicans who insist excessive spending and money printing is causing Inflation, they're mostly right. But what they're hoping Americans are is too lazy to figure out who is actually responsible for it. They're also hoping Americans are too lazy to understand that inflation and the energy crisis is a global issue.
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Gadianton
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Re: Even More Stag, Extra Flation

Post by Gadianton »

The highlighted portion catches inflation mid-play. It all started in 2018, when Donald J. Trump launched a trade war with China, costing the economy an estimated 1.7 trillion dollars. Jerome Powell, a republican, covered for Trump by lowering interest rates. This fueled an asset bubble, which Trump loved, thinking he's now king of the stock market. Then came the pandemic, the supply disruptions, and rates were already low, but backed in to a corner and worried about the economy tanking, rates were taken even lower. On top of that, the amateurs at Breitbart did catch the part about stimulus. Yes, Donald J. Trump pumped all kinds of stimulus money into the economy, and make no mistake it was his doing because he personally signed all the checks. Unfortunately, demand seemed to have shifted away from services but toward other things, and there wasn't a need for the tremendous amounts of stimulus -- people didn't go into cash hoarding mode. Trump really screwed up, I'll bet you'd go back and vote for Hilary if you could -- I get it.

Now let me just teach you one more thing today, Ajax. Kind of like how you can't both be a Trumpian big energy exporter and pray for low energy prices at the same time, there's another oversight in your narrative. You can't be an anti-globalist and also be pro growth. Decoupling from China and elsewhere and insourcing will hit the economy hard. If you want things to continually get cheaper, you need global trade with cheap labor.

Funny enough, the Koch bros sponsored a very odd YouTube video trying to sell this to right-wingers like yourself. Look at Japan, Japan is stagnant. That's going to be the eventual state of the United States once we seal the borders and insource. However, as the video put it, the economic cost may be worth the social benefits of having a more insular society. Well, at least they understood the dream of the wall has a big economic price.

But, the one thing you and Breitbart understand correctly is that you don't need to know anything, the public in general will blame Biden for inflation because they don't know any better, and you might get your guy in next round. It won't fix inflation though.
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Re: Even More Stag, Extra Flation

Post by Gunnar »

Vēritās wrote:
Sun Jun 12, 2022 3:53 am
Republicans have been predicting inflation woes during Democrat Presidencies for many decades now. The irony is that after fifty years it finally happened, and it was caused mostly by a Republican.

Listening to economic experts on the Right, I agree that inflation is caused primarily by an exponential increase in money supply. If only there were some way we could measure the money supply in the economy so we can see when it starts. :roll:

m1.jpg

Biden took office in January 2021, well after the money supply had skyrocketed. Why did it quadruple under Trump? Well, for several reasons.

1. Trump’s money gusher began in 2017 with the $1.9 trillion tax cut that wasn’t matched with any spending cuts. The GOP didn’t sniff out socialism then, despite estimates that the Trump tax cuts increased the deficit by $3.9 trillion.

Seeking a compliant central banker, Trump, the self-styled “king of debt,” appointed Jerome Powell but quickly soured on him when he didn’t increase the money supply quickly enough for Trump’s taste. Powell was soon on the receiving end of Trump tweets. “Where did I find this guy, Jerome?” he asked in one of the milder tweets, but soon escalated to “No guts! No sense! No vision!” He argued that the “federal reserve doesn’t know what it’s doing,” adding “we need rate cuts and easing” (exactly the opposite of what we needed). If Republicans were worried about inflation, they might have spoken up about Trump’s attempt to flood the economy with easy cash.

Then came COVID. Most people think the big federal cash infusion, the $2.2 trillion CARES Act, was a necessary response to the emergency. It saved many from destitution. But that money, combined with the trillions of dollars of quantitative easing and near-zero interest rates over the past decade and a half, certainly set the stage for inflation. Congress passed an additional $900 billion in December 2020—which Trump signed—for a grand total of over $3 trillion in COVID relief.

Again, all of this money sloshed into the economy before Joe Biden took the oath of office.

The Fed, not the President, is responsible for regulating inflation, and Trump appointee Jerome Powell was constantly pressured to keep interest rates low. Trump Says Fed Should Cut Rates to ‘Zero, or Less,’ Attacks Jerome Powell Again

2. Trump's tariffs on imported goods from China.

This is from Forbes, September 2019:
Trump Tariffs Will Soon Cost U.S. Families Thousands of Dollars A Year

"Walmart, the biggest U.S. retailer, warned the Trump administration the newest round of tariffs on imported Chinese goods could prompt it to raise prices on products from shampoo to bicycles to food" https://www.cbsnews.com/news/walmart-Washington ... s-kick-in/

3. Immigration

Currently we're in one of the worst labor shortages we've seen in decades. This means companies are increasing wages dramatically, which translates to new money in the economy. The reason for the labor shortage is mostly COVID related but Trump's immigration policies have seen dramatic drops in both legal and illegal immigration in each year he's been in office.


The little fact no one is talking about is that the annual inflation rates for dozens and dozens of goods routinely purchased by American households - including food - were already at their highest levels in a decade before Biden entered the White House. https://www.reuters.com/world/us/republ ... 021-11-01/

For instance, in April 2020 gasoline averaged $1.94/gallon and that rose gradually to $2.60 by February 2021. So the inflation for gasoline was 34% in Trump's final year. https://www.statista.com/statistics/204 ... ince-2009/

Lumber is another important commodity that had already experienced a record increase in value just prior to the pandemic. It more than doubled in Trump's first two years before doubling against in his final year.

lumber.png

So Republicans who insist excessive spending and money printing is causing Inflation, they're mostly right. But what they're hoping Americans are is too lazy to figure out who is actually responsible for it. They're also hoping Americans are too lazy to understand that inflation and the energy crisis is a global issue.
This is yet another post that ajax18 is virtually guaranteed to not read all the way through or understand, nor will he even try to rebut it with anything but other than cheap insults and innuendo and/or flat unsupported conspiracy theories. The facts are simply not on his side, nor does he even seem to care that they aren't. To Republicans nowadays, who can get away with telling the biggest and most outlandish lie is more important than who can most effectively defend and demonstrate what the real truth is.
No precept or claim is more suspect or more likely to be false than one that can only be supported by invoking the claim of Divine authority for it--no matter who or what claims such authority.
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Re: Even More Stag, Extra Flation

Post by Gunnar »

Gadianton wrote:
Sun Jun 12, 2022 4:22 am
But, the one thing you and Breitbart understand correctly is that you don't need to know anything, the public in general will blame Biden for inflation because they don't know any better, and you might get your guy in next round. It won't fix inflation though.
I wish we were wrong about that, but it may be tragically true. :(
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Re: Even More Stag, Extra Flation

Post by canpakes »

Inflation is being driven by consumer demand pumped up by a legacy of stimulus–monetary and fiscal–and fueled by a red hot labor market.

Remember when Trump was trying to bribe folks into voting for him by promising that he'd throw more stimulus money at them if re-elected?

Good times.
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ajax18
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Re: Even More Stag, Extra Flation

Post by ajax18 »

Vēritās wrote:
Sun Jun 12, 2022 3:53 am
Republicans have been predicting inflation woes during Democrat Presidencies for many decades now. The irony is that after fifty years it finally happened, and it was caused mostly by a Republican.

Listening to economic experts on the Right, I agree that inflation is caused primarily by an exponential increase in money supply. If only there were some way we could measure the money supply in the economy so we can see when it starts. :roll:

m1.jpg

Biden took office in January 2021, well after the money supply had skyrocketed. Why did it quadruple under Trump? Well, for several reasons.

1. Trump’s money gusher began in 2017 with the $1.9 trillion tax cut that wasn’t matched with any spending cuts. The GOP didn’t sniff out socialism then, despite estimates that the Trump tax cuts increased the deficit by $3.9 trillion.

Seeking a compliant central banker, Trump, the self-styled “king of debt,” appointed Jerome Powell but quickly soured on him when he didn’t increase the money supply quickly enough for Trump’s taste. Powell was soon on the receiving end of Trump tweets. “Where did I find this guy, Jerome?” he asked in one of the milder tweets, but soon escalated to “No guts! No sense! No vision!” He argued that the “federal reserve doesn’t know what it’s doing,” adding “we need rate cuts and easing” (exactly the opposite of what we needed). If Republicans were worried about inflation, they might have spoken up about Trump’s attempt to flood the economy with easy cash.

Then came COVID. Most people think the big federal cash infusion, the $2.2 trillion CARES Act, was a necessary response to the emergency. It saved many from destitution. But that money, combined with the trillions of dollars of quantitative easing and near-zero interest rates over the past decade and a half, certainly set the stage for inflation. Congress passed an additional $900 billion in December 2020—which Trump signed—for a grand total of over $3 trillion in COVID relief.

Again, all of this money sloshed into the economy before Joe Biden took the oath of office.

The Fed, not the President, is responsible for regulating inflation, and Trump appointee Jerome Powell was constantly pressured to keep interest rates low. Trump Says Fed Should Cut Rates to ‘Zero, or Less,’ Attacks Jerome Powell Again

2. Trump's tariffs on imported goods from China.

This is from Forbes, September 2019:
Trump Tariffs Will Soon Cost U.S. Families Thousands of Dollars A Year

"Walmart, the biggest U.S. retailer, warned the Trump administration the newest round of tariffs on imported Chinese goods could prompt it to raise prices on products from shampoo to bicycles to food" https://www.cbsnews.com/news/walmart-Washington ... s-kick-in/

3. Immigration

Currently we're in one of the worst labor shortages we've seen in decades. This means companies are increasing wages dramatically, which translates to new money in the economy. The reason for the labor shortage is mostly COVID related but Trump's immigration policies have seen dramatic drops in both legal and illegal immigration in each year he's been in office.


The little fact no one is talking about is that the annual inflation rates for dozens and dozens of goods routinely purchased by American households - including food - were already at their highest levels in a decade before Biden entered the White House. https://www.reuters.com/world/us/republ ... 021-11-01/

For instance, in April 2020 gasoline averaged $1.94/gallon and that rose gradually to $2.60 by February 2021. So the inflation for gasoline was 34% in Trump's final year. https://www.statista.com/statistics/204 ... ince-2009/

Lumber is another important commodity that had already experienced a record increase in value just prior to the pandemic. It more than doubled in Trump's first two years before doubling against in his final year.

lumber.png

So Republicans who insist excessive spending and money printing is causing Inflation, they're mostly right. But what they're hoping Americans are is too lazy to figure out who is actually responsible for it. They're also hoping Americans are too lazy to understand that inflation and the energy crisis is a global issue.
But you claim the economy was never really shut down due to Covid. And there has been well over 3 million illegal immigrants enter the country since Biden took office. Where is the wealth that they supposedly produce? What's worse is Democrats never learn. They just keeping doling out more welfare by printing more money. Inflation and gas prices are the hidden tax upon the poor that the poor were to uninformed and misled by the mainstream media to foresee before it was too late.
And when the Confederates saw Jackson standing fearless like a stonewall, the army of Northern Virginia took courage and drove the federal army off their land.
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Gadianton
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Re: Even More Stag, Extra Flation

Post by Gadianton »

illegal immigrants are not an inflationary pressure, Ajax. Illegal immigrants do menial jobs for far less money than a citizen would do -- you wouldn't even send your kids to work at a chicken or fish processing facility, I'm sure, let alone do it yourself. Lower wages are a deflationary pressure, Ajax, which is what you claim to want.

Well, what you claim to want is a mixed bag of incompatible things that can never happen. It's all angst. Quit being a loser.

Besides, illegal immigrants vote for Trump when they get the chance to vote. I'm sure you're down with that.
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Re: Even More Stag, Extra Flation

Post by Vēritās »

ajax18 wrote:
Sun Jun 12, 2022 2:00 pm
But you claim the economy was never really shut down due to Covid. And there has been well over 3 million illegal immigrants enter the country since Biden took office. Where is the wealth that they supposedly produce? What's worse is Democrats never learn. They just keeping doling out more welfare by printing more money. Inflation and gas prices are the hidden tax upon the poor that the poor were to uninformed and misled by the mainstream media to foresee before it was too late.
Republicans seeking to pin Trump's inflation vortex (which began under his administration) onto Biden are the ones arguing COVID shutdowns led to inflation, but what they're unwilling to do is be honest about it. We're not talking about something that happened more than a century ago, it was just a couple of years ago when Trump initiated shut downs.

The labor shortage is a result of several factors, drastically reduced immigration being only one of them. The data is clear that both illegal and legal immigration dropped significantly during Trump's one term stint. When workers have more leverage they can demand higher wages, and that's precisely what's been happening. There is a huge shortage of contract workers which is a reason why new housing is down, leading to low inventory and thus, skyrocketing home values. Whether you like it or not, most of the homes built in America over the past few decades have been mostly built by immigrants.

The number of illegal immigrants to enter the USA since Biden took office is closer to one million, not three million. But you completely ignored the point that legal immigration is also down. New legal residents dropped below one million annually for the first time in 20 years. These are people with skills who come here prepared to work.

Inflation is a inevitable consequence of capitalism when the markets drive prices higher as demand surpasses available supply. Put another way, there would be no inflation if Americans were too poor and couldn't afford to spend money on things they may or may not need. Would we be better off in that scenario? The fact that consumer demand is still skyrocketing is a sign that the economy is still on fire and demonstrates the ability of the general public to continue to buy things. Of course, you could always wish to be back in April 2020 simply because your guy was in office and gasoline was only $1.94/gallon but you'd also have to accept the fact that unemployment was dropping near 15% and GDP was pushing into negative territory.

Your last point appears to be nothing more than denial. I've already shown how the Republican explanation for inflation's cause is dead on accurate, and once we can identify the causes we can then know who to blame for it. The fact that they admit inflation is caused by increased money supplies + COVID shutdowns + exacerbated by a red hot job market + low interest rates, means we can clearly and honestly place the blame on the one guy who dumped $5 trillion into the system in just a couple of years, he overstepped his authority by coercing his Fed chairman to keep interest rates at record lows, then he made a pandemic induced labor shortage much worse with his immigration policies, and for extra gravy he started a trade war with China that added costs to American consumers.

Because of this inflationary period, we will have plenty to learn from. Economists will for years be writing about things not to do to cause inflation, while using Trump's disastrous administration as the backdrop.
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Re: Even More Stag, Extra Flation

Post by Hawkeye »

Republicans seeking to pin Trump's inflation vortex (which began under his administration) onto Biden are the ones arguing COVID shutdowns led to inflation, but what they're unwilling to do is be honest about it.
Then why aren't you a Republican since you claim that inflation has made our lives so much better?

Just a few months ago, Janet Yellen was insisting that inflation was only transitory. Only recently have we started to realize that Bidenflation will likely be even worse than the inflaiton that resulted from Jimmy Carter's policies.
The best part about this is waiting four years to see how all the crazy apocalyptic predictions made by the fear mongering idiots in Right Wing media turned out to be painfully wrong...Gasoline would hit $10/gallon. Hyperinflation would ensue.
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