CPI jumps 5% in May of 2021, fastest since 2008

[oyarde]

I'm just getting annoyed that no one seems to know where inflation is coming from. It's caused by printing money, period. In fact the proper definition for inflation is the expansion of the money supply. Rising prices is just an effect of inflation, not the inflation itself. And money printing is caused by excessive govt spending.

It seemed like there was a brief window when people were starting to get the concept, maybe 6 months ago. But now the democrats are pushing the idea that it's Putin and Greedy Big Business and republicans the idea that it's an oil supply problem so now I'm constantly reading articles and posts, even on this website, about what is causing inflation, and they don't even mention the printing of money and the govt spending.

Well thats a serious problem that I dont expect to go away . Even if you got the general public to realize govt made all these worthless dollars you'd never get a dem congressman to even pretend that might be the case no matter what . Also the general public is retarded so no expectations there.

[Madison320]

Well thats a serious problem that I dont expect to go away . Even if you got the general public to realize govt made all these worthless dollars you'd never get a dem congressman to even pretend that might be the case no matter what . Also the general public is retarded so no expectations there.

I think it's funny that the federal reserve claims their previous QE had nothing to do with current price inflation, but they need to do QT to cure current price inflation.

[Occam's Banana]

A tale in three tweets:

https://twitter.com/Breaking911/stat...30257922703361


https://twitter.com/BusinessInsider/...77271431266308


https://twitter.com/therecount/statu...60593385291776

[devil21]

A tale in three tweets:

https://twitter.com/Breaking911/stat...30257922703361


https://twitter.com/BusinessInsider/...77271431266308


https://twitter.com/therecount/statu...60593385291776

Gee, if only there had been hundreds of books on it written over the last 100 years by Austrian economists?!?

I'm sure no one here believes his claptrap, though. He knows exactly what he (Fed) is doing.

(eta: and, imo, JPow's comment about Main Street's excess savings is a signal that price inflation will persist in order to drain those accounts. As George Carlin said "they'll get it all back from you eventually)

[Krugminator2]

Gee, if only there had been hundreds of books on it written over the last 100 years by Austrian economists?!?

I'm sure no one here believes his claptrap, though. He knows exactly what he (Fed) is doing.

I don't think he does. The Fed doesn't believe M2 matters which is why they only publish it once a month.

And apparently those Austrian economists don't understand inflation either (at least not the living ones)


Double-Digit Inflation Bet with Bob 2009 Murphy https://www.econlib.org/archives/200...igit_in_1.html "At any point between now and January 2013, if there is a year/year increase in seasonally adjusted CPI that is at least 10%, then I pay Bob at that time $500."




"I was going to wait until I officially won my inflation bet with Bob Murphy before announcing it here, but because Brad DeLong and Paul Krugman, each in his own special style, have already announced my win, I’ll address it today. https://www.econlib.org/archives/2012/12/my_inflation_be.html


Six years ago, Robert Murphy and I made the following bet: https://www.econlib.org/archives/2016/01/i_win_my_inflat.html
"At any point between now and January 2016, if there is a year/year
increase in seasonally adjusted CPI that is at least 10%,"
t. Indeed, cumulative inflation over the entire period from January 2010 to November 2015 was only 9.5%.


The Peter Schiff hits are endless 2011 https://www.businessinsider.com/pete...rinting-2011-3

[oyarde]

The fed is being run by people who couldnt run a lawn care business or a gas station . So is the white house and Congress and senate if you look at the actual leaders.

[oyarde]

Just think if there was too much money six months ago , look at all the money thats been put out of crypto and stocks and into cash since then .

[Madison320]

I don't think he does. The Fed doesn't believe M2 matters which is why they only publish it once a month.

And apparently those Austrian economists don't understand inflation either (at least not the living ones)


Double-Digit Inflation Bet with Bob 2009 Murphy https://www.econlib.org/archives/200...igit_in_1.html "At any point between now and January 2013, if there is a year/year increase in seasonally adjusted CPI that is at least 10%, then I pay Bob at that time $500."




"I was going to wait until I officially won my inflation bet with Bob Murphy before announcing it here, but because Brad DeLong and Paul Krugman, each in his own special style, have already announced my win, I’ll address it today. https://www.econlib.org/archives/2012/12/my_inflation_be.html


Six years ago, Robert Murphy and I made the following bet: https://www.econlib.org/archives/2016/01/i_win_my_inflat.html
"At any point between now and January 2016, if there is a year/year
increase in seasonally adjusted CPI that is at least 10%,"
t. Indeed, cumulative inflation over the entire period from January 2010 to November 2015 was only 9.5%.


The Peter Schiff hits are endless 2011 https://www.businessinsider.com/pete...rinting-2011-3

Who's more wrong, the few people who predicted inflation early or the 99% who said we only have to worry about deflation?

[Madison320]

Just think if there was too much money six months ago , look at all the money thats been put out of crypto and stocks and into cash since then .

I don't think the crypto/stock crash adds to the amount of money chasing goods. The crash is just the perceived value of the crypto coming down, it's not adding to the amount of cash. If I buy a million dollars of bitcoin and it crashes to 0, I'm out a million in cash.

I sold my house 3 years ago and invested the profit. Whenever my total investment goes up over a certain amount I sell it and use it to supplement my job income. So when it was going up it was great, I was looking for ways to spend money, but now it's down and I'm having to be frugal.

I think a common mistake is to only look at a portion of the economy. This is the main principle explained in hazlitt's book, economics in one lesson. For example if the government builds a stadium it looks like that's adding to the economy but what about all the money taken that is used to build the stadium?

I think the same thing is happening with inflation. We have inflated the money supply from 1 trillion to 9 trillion in the economy "as a whole". That money is moving around doing all sorts of crazy things. I think most attempts to calculate the amount of inflation are wrong based on the fact that they are not look at the economy "as a whole". They're just looking at parts of it. The way I look at it is that there's an underlying force that wants to drive prices up 9 times what they were. But I have very little idea how long that's going to take or which prices are going to rise or fall during the process. That being said I'm almost positive that the final resting place is in essential things like food, energy and shelter.

[Madison320]

A tale in three tweets:

The narrative has gone from:

- Deflation is the only thing we have to worry about, not inflation.

- Inflation is only temporary.

- Inflation can easily be fixed because the economy is the strongest it's ever been.

- Fighting inflation may cause a mild downturn, but nothing close to a recession.

Just last week it was:

- Fighting inflation may cause a mild recession in the future.

Now it turns out we're in a recession so it's changed to

- We're in a "technical recession" but not a real recession. But it's going to be mild.

The reality is that things are going to get much worse. We've been over-consuming decades and now we have to under-consume. It's not that complicated, it's not a conspiracy by "Them", it's just basic logic.

[devil21]

I don't think he does. The Fed doesn't believe M2 matters which is why they only publish it once a month.

They know exactly what it means. That's why CNBC shut Jim Grant down, full stop, the moment he brought up the large increase in M2 on the air in April 2020. Perhaps you forgot about your posts in this thread back then? Not only did the Fed change from weekly to monthly reporting they also changed how it's calculated and presented. Even suggesting that the Fed doesn't understand it's own monetary base numbers and the impacts of them is too obtuse even for you Krug.

http://www.ronpaulforums.com/showthr...reat-Recession

Whole thread is good for a historical review but oyarde accurately predicted inflation over a year ago due to M2 but JPow can't?

05-26-2021, 10:31 AM #10
oyarde

Quote Originally Posted by Madison320 View Post
Commodities have pulled back from their highs. The headlines are saying the inflation scare is over. I think it's just getting started.

Ya I think its just about to start.

The Fed, along with connected corporations, who now own pretty much everything so they can set prices, are sucking money out of circulation to bring on defaults. Great Depression playbook again. Get everyone levered up and overextended then pull the money back out causing waves of defaults. Price inflation is a tool to drain money that would otherwise go to servicing debt.

[Krugminator2]

Who's more wrong, the few people who predicted inflation early or the 99% who said we only have to worry about deflation?

Both are horrible takes. Maybe we should learn from the people who right in 2009 AND 2021. I was ridiculed endlessly after the crisis on forums like this saying the Federal Reserve policy was way too tight and should be going much bigger. Endlessly. Had these conversations with you for 10 years. Then after the huge increase in the money supply starting in March 2020, I thought that would be highly inflationary because I didn't think the Federal Reserve would immediately start sopping up the excess liquidity.

This post I made early of 2021 is so good on so many levels. I should get some sort of poster of the century award. There should be some sort note that says genius next to my forum name.

M2 grew at 5.8% from 2009 to 2020. Has grown 26% in the last year. This time is different. Inflation is now a real concern.

I think the Fed will be reluctant to tighten if inflation runs at even 4%. I think they will call it make up inflation for running below 2% for so long.

M2 grew at 26% last year. M4 which apparently is a better metric grew at 28%. M2 is on pace to grow at well into double digits this year. So far markets aren't sending a clear inflation signal. Been wrong on soybeans, oats, and silver. I did just buy some palladium tonight. Maybe I am stubborn but really think inflation is going to be a thing and I think the Fed will be slow to do anything about it.

[Madison320]

Both are horrible takes. Maybe we should learn from the people who right in 2009 AND 2021. I was ridiculed endlessly after the crisis on forums like this saying the Federal Reserve policy was way too tight and should be going much bigger. Endlessly. Had these conversations with you for 10 years. Then after the huge increase in the money supply starting in March 2020, I thought that would be highly inflationary because I didn't think the Federal Reserve would immediately start sopping up the excess liquidity.

This post I made early of 2021 is so good on so many levels. I should get some sort of poster of the century award. There should be some sort note that says genius next to my forum name.

Yeah but when you said that printing money has no effect on M2 the genius award got cancelled. Please send it back.

What made M2 go up?

[Krugminator2]

Yeah but when you said that printing money has no effect on M2 the genius award got cancelled. Please send it back.

What made M2 go up?

M2 increased by 10% in a little over a month https://fred.stlouisfed.org/series/M2SL

M2 Feb 2020 - 15458
M2 April 2020 - 17002

What do you think is the more likely reason for this spike?

Option A) cash from QE done 10 years earlier on the balance sheets of banks started to flow into the system because it was such an opportune time to make loans

Option B) A bill called the CARES Act passed on March 27th, 2020 that deposited $560 billion directly in bank accounts increased M2

[Krugminator2]

Remember when the laws of markets were repealed and something about MMT and Janet Yellen and free worthless dollars from the Federal Reserve made it worthwhile for corporations to pay any price for houses because they couldn't lose?

Your little show of always pretending the point went way over your head is getting old. You keep pushing your MMT and then claim to be for free markets. Somehow though, you conflate Blackrock having unlimited FRNs to "free markets."

Blackrock has as many FRNs as they want. FRNs are not money. They are debt coupons created out of thin air. Blackrock has no worry of devaluing those FRNs or any sort of need for "value" in terms of FRN value. It's like a cheet code in a video game. It doesn't matter if they buy a house at $500,000 that should be worth $400,000. All the money printing will inflate the price past that anyway. Yet somehow this is all free markets. Yeah OK. Let me know if you need this translated into Sinhala again so you can understand.

You keep assuming that the unlimited money printing of the MMT system you support has no affect on the market. Just because currently there are still people willing to buy something for the FED's IOUs doesn't mean that Blackrock isn't well aware of the worthlessness of them, and they have an unlimited supply. You can't overpay with something that has a value of zero.

Trying to justify your MMT planned economy with free market rules is like trying to use baseball rules in hockey. It does not work. You can site whatever you want. That's the ultimate scam of the MMT central planner. Trying to make markets out to be some magic form of sourcery. Only the great wizards Powell and Yellan can save us. We commoners can't understand the markets.

Well.. turns out that was wrong. I can't find a breakdown of Blackrock's performance because they manage $10 trillion and real estate is only $60 billion of that but Zillow and Redfin certainly were in the business of buying residential real estate and it was a big part of their business. Let's see how that went for them. Did it go well I wonder? Free worthless money made losing impossible, right?







Zillow reports $880M loss on failed home-flipping business https://therealdeal.com/2022/02/13/z...ping-business/

Redfin losses soar amid iBuying ramp up https://www.housingwire.com/articles...uying-ramp-up/

[Madison320]

M2 increased by 10% in a little over a month https://fred.stlouisfed.org/series/M2SL

M2 Feb 2020 - 15458
M2 April 2020 - 17002

What do you think is the more likely reason for this spike?

Option A) cash from QE done 10 years earlier on the balance sheets of banks started to flow into the system because it was such an opportune time to make loans

Option B) A bill called the CARES Act passed on March 27th, 2020 that deposited $560 billion directly in bank accounts increased M2

Both, except I have no idea why it took so long for the original QE to show up in M2. All I know is that it ALWAYS will eventually.

Anyway I asked the question the wrong way.

What I meant to ask is what do you think makes M2 go up in general?

[Krugminator2]

Both, except I have no idea why it took so long for the original QE to show up in M2. All I know is that it ALWAYS will eventually.

Anyway I asked the question the wrong way.

What I meant to ask is what do you think makes M2 go up in general?

I think M2 changes are usually the result of bank lending. I think M2 will also increase if the government cuts people a check that isn't paid for with taxes or private citizens buying the debt that was used to send a check.

[oyarde]

Rumors are the 101st Airborne began moving from Ft Campbell Ky to Europe a week ago. May finish up today . In other news , US job openings slip. May commimg in at 400K less job openings posted from April and 600K less than Mar.. March was a record high though . Jobs numbers for Fri expected to be lowest in a year.

[oyarde]

Jobs numbers from June are out , while probably slightly better than many expected they do not of course get the US back to pre plague levels. What that means is now they probably will not as no real economic growth is expected by many in at least 12 of the next 18 months . Considering how dismal the past six months were that does not look good. Odds are increasing by the moment for two consecutive years of no growth.

[oyarde]

Rumors are estimates for upcoming number are around 9 percent . Thats chooglin'

[oyarde]

New number 9.1 . Getting closer to the real double digit inflation.

[oyarde]

Best article of today I saw from Andrew Bucholtz at The Comeback was titled " Oklahoma catfish noodler confesses to killing fellow fisherman he thought would feed him to bighoot" . Guess inflation isnt the only scary thing in Pontotoc County.

[Occam's Banana]

https://twitter.com/POLITICOPro/stat...39013807017984


There's one hopeful sign for the Fed on inflation. Really.
Slower wage growth could help bring down prices and ultimately mean less sting for the average worker.
https://www.politico.com/news/2022/0...rkers-00045482
Victoria Guida (13 July 2022)

Wage gains for American workers are beginning to slow, threatening one of the few positive trends for the economy since the pandemic. But that could be good news for the nation’s labor force.

The government on Wednesday reported that inflation soared 9.1 percent in June — the biggest 12-month jump since November 1981. Prices rose across the board, but not because of salary increases, which have actually leveled off in recent months.

That matters because if prices and wages keep pushing each other up, the Federal Reserve — already under tremendous strain to rein in inflation — might be forced to move even faster to ramp up interest rates, throwing people out of work and thrusting the economy into a painful recession. Instead, slower wage growth could help bring down prices and ultimately mean less sting for the average worker.

“If we have a wage-price spiral, the Fed really has to slam on the brakes,” said Dean Baker, a senior economist at the progressive Center for Economic and Policy Research. “You can’t have that if wage growth is slowing, and it clearly is.”

“This takes an enormous amount of pressure off the Fed,” Baker said.

For now, that’s cold comfort to millions of Americans who are seeing less and less money left over in their wallets after their monthly expenses. The trend has contributed to a dour national mood that could feed fears of an impending economic slump and doom Democrats’ prospects at the polls in November.

The latest consumer price index report showed that prices skyrocketed by 1.3 percent in June alone from the previous month, partially reflecting a jump in gas prices that has since begun to ease. Senior administration officials told reporters on a call before the data was released that this would mean that any top-line inflation number is overstating what Americans are experiencing now.

But while administration officials had hoped for good news in so-called core inflation, which excludes the more volatile food and energy prices, costs there also accelerated.

The Fed generally pays more attention to core inflation than to the top-line number, because it’s considered a better indicator of where prices are headed, though Chair Jerome Powell has warned that rising gas prices might fuel expectations of higher inflation.

The central bank also looks at wages.

Average wages this year are up more than 5 percent from a year ago, the fastest pace since Ronald Reagan’s presidency. But that has caused concern at the Fed that the trend might accelerate and feed back into price increases, which have already been eating away at those impressive gains. The steady decrease in the speed at which wages are rising could allay those fears.

In a memo to reporters, White House National Economic Council Director Brian Deese and Council of Economic Advisers Chair Cecilia Rouse noted that average hourly earnings grew at a 4.2 percent annualized rate in the three months ending in June, down from 4.8 percent the previous quarter and 6.1 percent in the last quarter of 2021.

The picture for wages when adjusted for inflation “is terrible right now,” said Jason Furman, former chief economist for President Barack Obama and a professor at Harvard University. That’s because people are getting raises much more slowly than prices are rising.

But the slowdown in wage increases “might mean the Fed needs to raise less aggressively, so it can do a better job of preserving jobs,” Furman said.

Slowing wage data has increased optimism among some economists that the Fed will be able to avoid causing a recession. But an important component of that outlook is that inflation will still need to come down.

The central bank and other forecasters still expect some of the big drivers of price spikes — like supply chain snarls — to eventually fade, while global prices for food and oil might stay high but stop rising. That too could help the Fed avoid having to cause a significant increase in unemployment in its battle against inflation. But nothing is guaranteed.

Arindrajit Dube, a professor at the University of Massachusetts Amherst and a research associate at the National Bureau of Economic Research, said wages now seem to be rising at a reasonable rate that isn’t problematic from an inflation perspective.

“But if wage growth slows down a little and inflation stays high, that’s not good for workers,” he said. “Threading the needle is what we’d like to see happen.”

From the Fed’s perspective, officials don’t want to see inflation become a more permanent feature of the economy through pay raises.

“If it’s not built into wages, then it’s unlikely to be a long-run entrenched phenomenon,” Dube said.

---

[Madison320]

Average wages this year are up more than 5 percent from a year ago, the fastest pace since Ronald Reagan’s presidency. But that has caused concern at the Fed that the trend might accelerate and feed back into price increases, which have already been eating away at those impressive gains. The steady decrease in the speed at which wages are rising could allay those fears.

The "wage-price" spiral is a bunch of crap. Wages are prices and they're going up for the same reason all prices are going up. Because the Fed printed 8 trillion dollars.

[Madison320]

New number 9.1 . Getting closer to the real double digit inflation.

I'm getting crushed lately. My inflation hedges are getting killed by ... inflation.


The dog food I buy from amazon was always $50. About 4 months ago it went to $52. Then $54. I just bought some today and it's $62! On top of that amazon's 2 day delivery is up to about 6 days. I think UPS and FedEx must be getting hammered. It seems like everything now is shipped by usps. They just try to cram it in my mailbox.

I think we're seeing the massive amounts of money that's been printed over the last 12 years finally moving from the stock market to the grocery market. It's really getting that "end of days" feel to it. It's not just in the US. All the major democracies are crashing from decades of over consumption.

[oyarde]

The amount of money out there right this minute is staggering . Pretty much why we are where we have arrived. Once you get that $#@! rolling people dont seem to understand how difficult it is to stop . The next hike of .75 isnt going to do it.Youve got people sitting on cash from bitcoin they sold for 25K they bought under 1k , youve got the Dow down 24 percent and none of it went back into the markets on top of what the fed and govt has done etc

[Swordsmyth]

The amount of money out there right this minute is staggering . Pretty much why we are were we ave arrived. Once you get that $#@! rolling people dont seem to understand how difficult it is to stop . The next hike of .75 isnt going to do it.Youve got people sitting on cash from bitcoin they sold for 25K they bought under 1k , youve got the Dow down 24 percent and none of it went back into te markets on top of what the fed and govt has done etc

After the CPI data, investors even began talking about 100 basis point hikes in the Fed funds rate at the next FOMC meeting July 26-27, perhaps the most aggressive monetary tightening seen since the early 90’s.

Federal Reserve Board of Governors member Christopher Waller however came out and voiced support for a 0.75% rate hike at the next meeting, but said he would back a 1% hike if upcoming economic releases show strong consumer spending.

Following Wednesday’s CPI data, Atlanta Fed President Raphael Bostic said, “Everything is in play,” and when asked if that included a 100 basis point hike, he said, “it would mean everything.”

More at: https://www.thefinancialtrends.com/2...-stocks-mixed/

[Krugminator2]

That "cure" only works in a free market. Unlimited Federal Reserve notes to select insiders does not a free market make.


Blackrock buys real estate with Federal Reserve notes that have no limits in supply. They can "overpay" because they are using an asset they have an unlimited supply of. Overpaying by 20% doesn't matter to them because more is just a phone call away.

As usual, you're completely wrong, but that's okay.

Blackrock has as many FRNs as they want. FRNs are not money. They are debt coupons created out of thin air. Blackrock has no worry of devaluing those FRNs or any sort of need for "value" in terms of FRN value. It's like a cheet code in a video game. It doesn't matter if they buy a house at $500,000 that should be worth $400,000. All the money printing will inflate the price past that anyway. Yet somehow this is all free markets. Yeah OK. Let me know if you need this translated into Sinhala again so you can understand.

"FREE MONEY. CAN"T OVERPAY. YOU ARE STUPID. MMT."

[oyarde]

According to S & P Global Market Intel the preliminary snapshot for July shows contraction of roughly 3 to 4 1/2 percent . With a reading of 47 , June reading of 51.6 and readings below fifty in contraction. I am though not expecting any relief from inflation growing between now and labor day. Locally gasolinne at 4.60 after a high of 5.26 but no real changes in diesel which is still 5.70 to 6. Looking at the rising costs of mnfg , no relief before the weather turns cold and people face higher heating costs to go along with Christmas.

[oyarde]

Inflation still chooglin' . Fed raises rate another 3/4 as expected to about 2 1/2 , according to the fed June sentiment they would need to get to 3.8 next yr for any improvement. No changes. Still inflation , still fed says in Sept they will begin dumping about 95 billion per month in assets of the 9 trillion balance sheet. So at this point next increase in interest should be 9/21.