Pirate's Cove

But, hey, no more mean tweets, right?

Growing inflation is Biden’s hidden tax on working Americans

The sharpest tax President Biden is levying upon Americans is one that was never passed by Congress, promised from the White House, or voted on by citizens at the ballot box. The invisible tax of rising inflation will do far more to harm working and middle-class Americans than Biden’s proposed tax hikes. The trillions of dollars in congressional spending and money printing from the Federal Reserve is already having a dramatic effect on the price of ordinary goods. Inflation has reached its highest point in years, and will likely reach the highest in two generations.

Over the past year, food prices are up 3.5 percent, with eggs and meat up by over 5 percent; gas is up 22 percent and is expected to get even higher by this summer; lumber is up 250 percent; new home prices are up $36,000, with overall housing up 11 percent; and new cars are up 9 percent, the highest in 68 years. In April, 13 percent of new car buyers paid more than the sticker price. Other goods — from household items, baby care and general merchandise — are already up between 5.2 and 7.2 percent from this time last year. The cost of eating out shot up by 3.7 percent over the past year, and some takeout specials such as chicken wings have nearly doubled. Coffee futures are up 24 percent since October. Even growing your own food has surged in price, with the cost of seeds and potted plants jumping by 10.5 percent.

Feeding the problem is the sharp price increase in commodities vital to our basic needs. Microchip prices are up by 25 percent over the last year, hiking the price of items from phones to televisions to car parts. Meanwhile, increased corn prices will further impact a variety of food products. Corn prices have nearly doubled since the start of the pandemic and reached a 13-year high. Along with corn, food prices are buoyed by a 59 percent increase in pork, 23 percent spike in soybean costs, and 21 percent increase in wheat prices. Whatever increase we’ve seen in grocery and restaurant bills will only accelerate as the trend continues.

Put it all together, and consumer prices are the highest they’ve been in eight and a half years. Economists now not only see the risk of inflation “higher than in the last two decades,” but the distinct risk of the Federal Reserve having to increase interest rates by the end of 2022.

In fairness, many of these things have nothing to do with Joe Biden. Or Donald Trump. The blame should be laid at China’s foot, because they were screwing around biological research on a virus. Neither Trump nor Biden had/have any control over people holding onto their cars, leading to a dearth of used, which makes used almost as expensive as new, and don’t expect negotiation. Neither of them raise chickens, leading to a shortage. You can blame lots of politicians, mostly Democrats, for their lockdowns and keeping businesses that make stuff and grow stuff shut. Perhaps the whole “essential worker” paradigm was skewed, since most are essential. Except government workers. A goodly chunk are superfluous.

But, this is politics, so, it’s Biden’s fault. You know they would be 100% blaming Trump. So, 100% Biden’s fault.

The second means of inflation comes through massive government spending. Between several “emergency” measures hastily passed under the guise of pandemic relief and President Biden’s massive new spending plans, we are looking at the potential for 1970s economic stagflation. Biden wants to spend nearly $2 trillion on a misleadingly-named “infrastructure” bill and $1.8 trillion in new social spending. Combined with the already-passed 2021 COVID-19 relief package, this spending will total $6 trillion — more than double the entire federal budget before the Great Recession. As if these large spending plans aren’t enough, the president requested a 16 percent increase in domestic spending in next year’s budget. Is he offsetting the increased social spending with cuts to the military? Nope — the proposed Pentagon budget is up by 1.5 percent.

Nor does the China Joe admin seem concerned about inflation in the least.

However, the reality does not match the White House’s rosy projections. Americans’ savings rates sharply increased after the government distributed $3,200 in direct stimulus payments, plus generous unemployment bonuses that reduced the available labor pool. Much of this saved and printed money will soon manifest in the economy in a frenzy of post-pandemic consumer spending. In short, there is far too much money out there chasing an increasingly limited supply of goods, whether it be food, cars, gasoline, houses or more. This is nearly the textbook definition of inflation.

New car dealers are getting about a third of their normal allotment. Some less. Anything that uses a computer chip will be in short supply for a while. Expect sales on products like TVs, computers, tablets, and so forth to be limited. Same with specials on food products and clothes. Have you tried to buy pants recently? I told you about my experience buying a computer. Well, need some warm weather pants, and, there’s little in stock. Going to have to order from Amazon. We’ve been told that “the buck stops here” when it’s a Republican in office, so, this is all China Joe’s fault.

Global stock markets sink as inflation worries mount

Stock markets in London and Tokyo tumbled 2.5% on Thursday and U.S. futures were lower after a jump in American consumer prices fueled worries inflation might drag on an economic recovery.

Shanghai, Frankfurt and Hong Kong also declined for a second day, following Wall Street lower.

Overnight, Wall Street’s benchmark S&P 500 index recorded its biggest one-day drop in three months after U.S. prices, exceeding forecasts, rose in April at their fastest year-on-year pace in 13 years.

Thanks, Joe!