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The Worst Economy in 80 Years: The ‘Inflationary Wave’ Edition
Remembering last November:
There is quite a storm a-brewin’. In case you aren’t getting the picture: despite what the Biden fluffers at CNBC and the Yahoo Finance page put out to cheerlead the market every weekday morning, we are heading full steam into the worst economy in 80 years. Most common people are already feeling (and clearly seeing) the effects of the first wave. …
While there is not much any of us can to about it, next April or so when we are waist deep in this abyss, remember the appropriate November 2021 headlines of “THE WORST ECONOMY IN EIGHTY YEARS” that didn’t happen. Acknowledgement and recognition of that fact now would be bad for the progressive agenda…and, more importantly, the investment portfolio’s of our beltway class.
Well, it is now “next April” and I suspect that – even though the additional trillions of debt spending that seemed to be in the offing back then didn’t materialize – the above outlook from five months ago was a bit too rosy given our overwhelmingly incompetent and corrupt ruling class. The best possible spin for our current situation was provided by Instapundit a few days ago:
RIGHT NOW THE ONLY THING KEEPING US ALOFT IS THAT THE REST OF THE WORLD IS EVEN MORE F*[***]D
But, if you dig down through the links, even that little spark of optimism dies rather quickly:
…It has been over forty years since the West has seen this sort of inflation. That assumes the official numbers are accurate, which is unlikely. In the United States, official inflation is 7 percent, but that is using the new math. If we were using the same math we did in the 1970s, then the real number would be close to double. …
[Emphasis added]
For the record, a source for that “math we did in the 1970s” is not provided. I do, however, tend to believe the assertion…and will do so until evidence is provided to the contrary. More…
… Since the invention of the petrodollar, America has been able to print as much money as it needs. The dollar is the default currency of the world, so those extra dollars always had a place to go. They would be spent on trade and then get reinvested by foreigners, usually foreign governments, back into U.S. Treasuries, which props up the massive spending by Washington. …
Since the Louvre accords in the 1980s, Washington has been able to swap securities for newly printed banknotes by the Federal Reserve. This would normally impose an inflation tax on the public, but the dollar being the reserve currency of the world spread this tax over the global economy. Inflation rates in the United States remained low, as long as global growth remained high and the world was willing to tolerate this system.
Those last two items are why inflation will not be abating anytime soon. … …the rest of the world is losing interest in the system that profits Washington at their expense.
[Emphasis added]
Just to point out the obvious, that specifically does not say “the system that profits the United States” but is limited to that special class within our ruling beltway. (The astute reader will notice that a complimentary statement would reflect much of what I have scribbled here at R> for quite some time: …the rest of the country is losing interest in the system that profits Washington at their expense. But I digress.) Now the frightening conclusion:
What this means as a practical matter is that the West is about to get much poorer and do so in a highly disorganized way. Not only will the standard of living decline due to inflation, but government spending will have to be radically reduced. The great welfare states and the American military machine were only possible when the cost of these things was subsidized by the world. The world is no longer willing to do that.
Western people are about to learn that those bits of metal and paper we think of as money are more than just a way to buy stuff. They are a store of value, and that value is the cultural strength of the society that issues them. The West has been in decline for a long time, but it was covered over by financial legerdemain. The free-money era concealed the great cultural looting of the West. That era is now over, and Western people will soon have to pay the price for it.
[Emphasis added]
The outlook is not good. But at least we have a top-notch team on the case. Right? Surely they are clear-headed and honest about the issues facing us and willing to make the hard decisions to lead us out of this. Well…
Biden’s lying about inflation — and workers know it
Nothing paints Joe Biden and fellow Democrats so out of touch as their lame rhetoric about inflation being “Putin’s price hike.” While the recent global effects have had an impact, rapid inflation began a year ago…
“Out of touch” may be manageable, but the laser-like focus of modern progressive ignorance is not:
…Joe Biden and his team are in total denial about economic reality and have no plans that will address the inflationary wave in any direction except to make it worse. That all but guarantees that the Fed will have to create a recession to counter inflation and stop a wage-price spiral that could otherwise set us up for years of stagnation. But even that will only go so far to address the corrosive impact of Biden’s spending impulses and economic incoherence.
[Emphasis added]
“Incoherence” is a bit charitable here. While it is doubtful that holding that seat at the top of the world economic food chain was going to last forever, maybe that position has been much more fragile than most of us wanted to admit for quite some time now. But the current demise…in the form of this steep nosedive we are now in…was a choice, all but guaranteed within the first 9 hours of the Biden administration. Moreover, in case you haven’t been paying attention, this departure from the slow, managed decline of much of the last century is the realization of the “fundamental transformation” barely hidden in undefined “hope and change.” Again, in handing the levers of power to the overt forces of Anti-Americanism nearly a decade and a half ago, We the People chose this demise. Biden is just the clownish puppet chosen to finish it off.
For the record, I would argue that “inflationary wave” is also a bit of unwarranted optimism for what is going to feel more like a tsunami to us in the middle class and below. Good times, good times.
There are now 1,011 looonnnnggg days left in the Constitutionally mandated Biden-Harris administration. May America get every one of those to the fullest…and emerge on the other side certainly bruised and battered but also wiser. (In the meantime, the ‘cabal’ that bragged of foisting Joe Biden on us must answer for his failed presidency.)
Into the abyss…
___ ___ ___
EXTENDED ASIDE
I hope you do take the time to go back and review the November 13, 2021, post titled The Worst Economy in Eighty Years referenced at the beginning of this offering. The key history review in the first half of it is summarized here:
…the 1991 recession. For those unfamiliar, that was a rather average 8-month recession that lasted from July 1990 to March 1991. (Note that the end of it was more than 18 months before the 1992 presidential election.) Interestingly, the official outlet for such things (i.e. the National Bureau of Economic Research) did not announce the end of that recession until December 22, 1992. (Note that the announcement came several weeks after the 1992 presidential election.) If you were politically aware of things back then, you will remember the Clinton Campaign, aided by the reliably Leftist media including the trusted nightly news anchors of the day and their near monopoly on dictating the narrative, took full advantage of this to hammer home the mantra “THE WORST ECONOMY IN 50 YEARS” for many, many months. Also, for the historically ill-informed out there, that reference timeframe meant something for a key voting demographic that tended to get more conservative at their age. You do the math.
The larger point beyond that was that the same media clowns that pushed that “WORST ECONOMY IN 50 YEARS” mantra then are now and will continue to be either silent (or much less “panicked”) about the modern economy that is justifiably now the worst in 80 years…and still charging full steam ahead in exactly the wrong direction.
Yet another example of the selective reportage by those charged with dispensing “approved-narrative journalism” only. It is not a new phenomenon. This is the kind of stuff that is useful in calibrating (or periodically recalibrating) your “fake news” filter.
You’re welcome.
Published in General
Flicker, I’m not sure that my description of Jerry as a “Commie Democrat” is not apt.
A. Has not Jerry repeated in almost every post the most absurd talking points of the Biden Administration over the last few months starting with somehow trying to justify the absolute debacle of the Afghanistan pullout?
B. Are not the Democrats seemingly full fledged Communists or something like that? Are they not against almost every “inalienable” right we have in the Constitution? Have they not held law abiding Americans without cause or a speedy trial for the J6 commission nonsense and hidden evidence in doing so? Did they not steal the 2020 Presidential Election? Have they not tried to destroy small business in America? Have they not literally murdered hundreds of thousands of people with their restriction for COVID care and their mandates for these dangerous mRNA “vaccines” that are killing thousands and will likely kill thousands more for a very long time? Have they not kowtowed to China, from which the Biden Crime Family gained millions in corrupt deals? Did not Biden try to provoke Putin into this no-win Ukrainian War which will have disastrous effects for billions of people
The list of callous, corrupt, nefarious, illegal and treasonous activities by the Commie Democrat goes on and on, so I guess I get really pissed off when some clown like Jerry trots out the totally absurd talking points of the Commie Democrats again and again because those policies he is defending are actually killing people by the thousands and perhaps injuring billions in the process, for those who don’t know there will be a disastrous food shortage worldwide this year because much of the world cannot do spring planting because of the lack of fertilizer. The danger to the entire world is just beyond words.
I hesitated to write anything and my finger lingered over the “Comment” button for a while. Then I “mashed” it, as some like to say here. And I let it out into the intertubes. :)
I agree with every factual point you made in your previous comment. But I think that people are pretty distraught now, and if Ricochet is any representation of the nation as a whole, the whole country may be on edge. And I don’t know what if anything can be done about it. But in the mean time, I think decorum (which can be severely over-emphasized, I admit) is more important now than it was prior to 2020 (more important now because of the egregious breach in law — and the civil order that law fosters — that was demonstrated with the forged election results) and most important now on a forum of at least nominal friends such as Ricochet.
Really, it’s only two things that I personally objected to. Calling Jerry a Communist and a Democrat is probably not correct. Firstly, I seriously doubt that Jerry would ever identify himself as either one. And secondly, calling him such and referring to his friends as such, seems like calling him, in public, the equivalent of a pinko commie rat-faced bast*rd, which are more or less fighting words.
There may be a time and a place for fighting words, but I don’t think that now, on Ricochet, with Jerry, is it.
I’m just one guy. And if it’s okay with you, and with Jerry, and with the moderators, I guess it’s just me. So to coin a phrase, It’s not you, it’s me. :)
And thanks for sincerity and your reply.
Jerry is reflexively opposed to everything. It becomes first boring, then irritating.
https://www.youtube.com/shorts/u5UDozqQYzg
Flicker: “Really, it’s only two things that I personally objected to. Calling Jerry a Communist and a Democrat is probably not correct. Firstly, I seriously doubt that Jerry would ever identify himself as either one. And secondly, calling him such and referring to his friends as such, seems like calling him, in public, the equivalent of a pinko commie rat-faced bast*rd, which are more or less fighting words.”
I agree probably that calling Jerry a Communist is probably not precisely correct. It’s tough to identify these Fascist/Corporatist/Totalitarian followers of the Great Reset into any sort of short hand label, but that said Jerry’s sympathies and those of his Democrat friends are surely with those who want to impose a one-world totalitarian Hi Tech Social Credit type slavery over the vast majority of humanity where you will “own nothing and be happy”, as well as having a nice little chip put in your arm to track and monitor your every behavior so as to prevent you from wandering off the righteously woke path.
Btw, Jerry identifies himself as a “conservative” just like Mitt Romney, Liz Cheney, David French and others who identifies that way but are seemingly against almost everything that used to define a “conservative”.
I have been on this forum for 5 years.
Jerry has seemed to me as having changed . I used to read his stuff and not find much to object too. Not so much anymore.
Has anyone else seen this change or is it just me ?
It is not just you.
Maybe so. But I don’t really see it like that. But I think it’s done and over with now, anyway.
Jerry is trying to be @emeriticus without studying it enough.
An important point made by Flicker. Unsk’s arguments, overshadowed by his unnecessarily mean, to the point of hatred, method of presentation is pretty much the definition of Ad Hominem. Unsk, you can do better, friend.
Sorry about that, Jerry.
You should have bought a dozen…they’ll be $12.95 each next week.
For the record, the character Jerry has played on R> for the last 18 months has been an intentionally obtuse brand of forced contrarianism that largely insults the intelligence of members and their good faith offerings. It long ago became more frustrating than amusing. No apologies are owed for being short with him…certainly not under one of my posts.
Yeah, it’s the “you people are so irrational and I have all the facts” arrogance that turned me off some time ago. I dunno, but it seems like Trump might have broken Jerry, too. Too bad.
More:
And remember, all of this is headed in only one direction…by design.
The West can’t hold everything together unless they run with 5% measured CPI for five straight years. There is too much debt. Too many unfunded liabilities. Too much government. Too many pensioners.
But when pensions and even Social Security are “indexed to inflation,” how does that help?
That’s a good question. Basically we spend out of the inflated assets. Also running with this genius inflation system so long has created an out of whack debt to ***any ratio*** LOL so you would end up with pancaking deflation if they didn’t do it. Trust me they are scared as hell to let the stock market go down and it’s been going straight up for 12 years. It’s insane.
Kudlow just showed a chart. It’s gone down every single month for 12 months, and the annualized rate is about 4.80%. You can’t make inflationism work indefinitely.
The other thing he said was, we have had average growth of 1.8% for the last 20 years. That’s when the money printing and the debt growth went nuts. We are stuffing debt into the economy willy-nilly without any respect to if it’s productive or not. People that love her up at the right time make out like bandits. Everybody else pays.
I’m Russian, and I’m hacking #20.
Hey, if you can’t take a rock to the face now and again, don’t throw tacos.
Soviet babbling.
this guy has a lot of analysis.
COMRADES! BEHOLD OUR BEAUTIFUL GOSPLAN!
Bank regulation encourages government growth and spending and it inflates home prices. It doesn’t support production as much.
What are those other columns, are they “predicting” LOWER inflation in the future? What a laugh.
How did it come to this?
Everybody that is going to spew tedious GOP boilerplate needs to realize this stupid system should have been changed right after the Soviet Union fell.
I heard some more good stuff this morning on the hidden forces podcast. He was interviewing Grant Williams. This gets out the real wages rate.
Because of year over year comparisons, the inflation rate is going down but it’s still going to be positive. The problem is when you lose so much ground and then it goes to something sort of normal like 2%, you are still getting killed. You don’t make up that ground. You need dis-inflation. You need a period were the inflation growth stops being positive. Well the whole system would crash if you did that.
He also said, the only way to make it for most people is to lever up at the right time. Good luck managing that.
For what it’s worth, this is that video I keep trying to tell people to watch, basically related to the GOPe, idealism, asset bubbles and inflation. It looks to me like they unlocked it. You probably can get a transcript as well. And what is David Stockman wrong on?
https://www.realvision.com/shows/grant-williams/videos/grant-williams-in-conversation-with-david-stockman
I have heard that for years, but I’ve never heard an explanation of why, or if someone can point to historical data to prove that no inflation is always accompanied by severe recession.