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Inflation: This Time It Really Is Different
Both political parties have managed to dodge the bullet. Government deficit spending, borrowing, and money creation by the Fed have gone relentlessly up with no repercussions in either inflation or interest rates. In fact, those skyrocketing deficits and money creation have been rewarded with little inflation and historically low-interest rates. Lefties have even concocted Modern Monetary Theory (MMT), a formalized economic theory that says that the US can create all the money it wants with impunity. Feel free to spend away!
But interest rates have recently increased (dragging down the stock market) and I’m afraid that’s just the beginning. This article from AIER makes a convincing argument that the chickens have finally come home to roost.
Published in General
And everybody is going to lose all kinds of personal agency. It’s going to be terrible. If you want to hear it in plain English spend the dollar and watch this:
https://www.realvision.com/shows/the-interview/videos/memories-of-1987-felix-zulaufs-outlook-on-equities-bonds-currencies-and-commodities?source_collection=b57c7eabfc3945a5a3b2b72f7bc45735
Everything Moves Towards Communism All Of The Time™
The Government Is Running Out Of Money™
Government Is How We Steal From Each Other™
Yeah, but for every $8,000 you put on the card, you get a $50 gift card to Shake Shack.
For utilities, generally their rate increases are governed by state commissions. Their increases, again, generally, aren’t keeping up with inflation. Say if the rates are locked for 3-4 years between filings, and the subsequent rate increase ask is 8%, they’re losing money due to inflation.
That said, you’re right, I think, in that their will be federal money spent on “green energy”, in some form, which may end up in a combination of “free” infrastructure spending (similar to Obama-era stimulus dollars that went out for utility infrastructure investment), low-interest loans, etc. I don’t think it’s a coincidence that utilities are all over new carbon-emission reduction targets. They have to be, in large part, if the signals and direction from regulatory bodies are making the mandates, or approving those types of spending plans from the utilities that are developed to align with the larger EPA and DOE mandates.
Not sure how those other elements are “gov’t regulated”, like the price of gas. The gov’t doesn’t set gas prices. Note that gas is not included in the normal inflation indices, because of its price volatility, amongst other things.
I can tell you based on watching real vision, hedge fund guys are totally licking their chops on this. It’s disgusting, but there is going to be a ton of money made by somebody.
You’re going to have a really hard time arguing the durability of 1960’s/1970’s era cars vs. today’s cars. Particularly 1970s cars.
In the jumbo shrimp example (not exactly a staple), 20 years of our low inflation rate yields you a price of about – $13.95, which is what you indicated above. Which doesn’t mean it’s a huge inflation increase. That’s a normal increase in price based on historical rates.
https://www.bls.gov/data/inflation_calculator.htm
FIFY!
Thanks – added to my Spotify “stuff”.
It’s already happened once, on a smaller scale. DOE grants were free money given to utilities circa 2014/2015, the utilities spent the money, and can earn recovery on that capital spend (even though the capital cost them nothing). Part of ARRA and “stimulus” spending.
The new one will be gigantic in comparison, in terms of spend.
This is the second time I have heard this. The Federal Reserve owns 20% of the TIPS bonds. These are the bonds that go up with inflation. Now you tell me, why in the hell isn’t this illegal? They are obviously trying to hide something and central plan just like the Soviets did.
This is very good, but it’s just standard Austrian stuff. The video I posted above is the one to watch.
Read this and weep.
When Money Dies
My collection of inflation reminders…
Welcome to communism comrades! The five-year plan will make sense to you intuitively after it kicks in. lol
Yes, 3% or so is considered standard or healthy. But that $100 savings bond I got as a kid is worth $5 today. Where did all this value go?
The reason they babel like this is because the government and the financial system as set up requires it. It makes it safer for expanding credit all of the time. You can’t tax deflation even though people live better with slight deflation. It’s a terrible system given the deflation from automation and globalized labor. Just wait until they put robots in Vietnam and Africa. So now we are getting asset bubbles instead of CPI inflation. It favors capital over people and you can’t get any freaking interest on a savings account. It’s cruel and that is why you are getting socialism and populism.
This might include a point worthy of discussion. There’s corrupt capitalism, our present state, populism, and socialism. The present state certainly favors the elite. Populism is thought by many to be more favorable to the people, I don’t know, and many disagree. Socialism is an ideal never achieved in practice and where the full-fledged implementation has happened the ‘elite’ oppress the subjects. Up for discussion.
It looks as if the ‘elite’ do well under corrupt capitalism and the inevitable form of socialism but they don’t favor populism where the outcomes are less favorable, predictable, and/or manipulable.
Steve Bannon put it well in a Frontline interview. Unlimited immigration is good because it swamps the workforce with cheap labor which helps a corporation’s margin, though this decreases earning power of the existing population. Free trade and using foreign work forces work well because this provides cheap overseas labor which is good for their margin, though it decreases the earning power of the existing population. Populism doesn’t work well because it raises the earning power of the existing population.
This is really technical, but some of you might like it.
https://investresolve.com/podcasts/mike-green-the-fourth-turning-and-reimagining-the-american-dream/
The ultimate issue is, you can’t have an inflationist system if you want all of these Chamber of Commerce policies. It’s screws over too many people.
You can have unlimited immigration, massive wage deflation from overseas and automation, if everything is going down in price all of the time. You really can. That’s what the Austrians say all of the time and I believe it. The problem is it would break the ruling class and the government. It would be chaos and nobody knows what would come out in the end of it.
I can’t link these two ideas. Is breaking the ruling class and the government chaos?
I mean comprehensive chaos. The government would run out of money fast and asset prices would go down too much. There would be a debt implosion.
Maybe. But we can only discuss Chaos while under the cone of silence.
Klaus Schwab says that automation will make most people unemployable but will still be good for profits. Essentially, he advocates (in my interpretation) making the world a large global company town, with a stipend in digital currency being given to the unemployed and used by the unemployed to pay for what they individually want. So, automation and a stipend for those displaced, is a good idea.
I just don’t see why they’d want to continue subsidizing a population of unproductive users whose purchases are paid for by the company.
I can’t look this up right now, but I have seen a good video of two Austrians explaining this very problem. If you just let everybody’s money improve in purchasing power i.e. no inflation, a little bit of deflation, basically nobody suffers very much. They should have been working on this since the mid 90s.
They should have been solving this 30 years ago.
Maybe this is what is behind all the measures that crop up pointing towards population control.
There are clips of that video on YouTube if you don’t want to watch the whole thing.
Maybe because they get more of the production for themselves? They get yachts and mansions and stuff, while the rest don’t. Pretty much how it is now.
An important distinction.
I think, if Schwab is right, that corporations will ultimately control subsidiary governments, which will not be sovereign states.
Given a choice, corporatist rule seems likely to be less onerous than ideological rule, especially if the ideology comes from either CCP or Sharia.