We’re now at the point where there are really no good solutions
There’s no escaping the ravages of inflation. Far from “peaking” as some hoped, the consumer price index accelerated in May, rising at a 12.3% annual rate, the government reported Friday. Not only are the costs of necessities becoming more unaffordable, so are the costs of escaping by taking a vacation or by curling up on the couch with a video.
Inflation has become embedded in the economy and it’s affecting more of the goods and services, especially the items that we can’t do without: Shelter, food, clothing, transportation, and health care.
As I wrote last month, the rising cost of renting or owning a primary residence is particularly worrisome. It’s the biggest item in the consumer-price index’s market basket. What’s more, the price of shelter is “sticky’—meaning once it goes up, it stays up.
It’s persistent, which is the opposite of “transitory.” That’s a big problem for American consumers, not to mention the headaches it creates for policy makers at the Federal Reserve who are assigned the job of bringing down inflation to tolerable levels.
Flexible prices (items that change prices frequently, such as gas and food) have long been driving inflation, but sticky prices (infrequent changes in prices, such as rents or subscriptions) have become a real contributor in recent months. The sticky prices CPI, produced by the Atlanta Fed based on data from Friday’s CPI report, rose at an annual rate of 7.5% in May and is up at a 6.8% annual rate over the past three months, a 40-year high.
You get things like fuel (up 4.1% in June), foods and beverages (1.1%), household energy (3.7%), and airline fares (12.6%) are big drivers. Vehicles were up .9%, but, really, they mostly hit their big peaks. Now it’s smaller increase, mostly to do with fuel costs of delivery and transportation
The Fed is trying to reduce demand for these items by raising interest rates, but it’s hard to see how that will work. On the margin, people can cut back. They can buy cheaper items at the grocery store, or squeeze another year’s life out of the old truck, or move in with a friend, but they’ll still need to eat and have a roof over their heads and heat the house and get to work. These are necessities, not luxuries.
Prices are rising for these items not because demand for them has suddenly surged, but because the supply has been constrained, frequently by global forces, including the COVID pandemic, the war in Ukraine, and other factors, including droughts and heat waves.
It’s a good point: demand is not higher, it’s that the supply is constrained, much like with available fuels. And, we all know that this is occurring around the world, it’s not just the U.S. It’s just that our inflation is one of the worst in the 1st World
For the most part, inflation is being caused by shortages of supply, not excesses of demand. But the only way the central banks can bring supply and demand back into balance is to destroy demand by any means necessary.
In practice, that means millions of people around the world will be required to lose their jobs. But I thought the problem was a shortage of workers…
Well, that sounds fun. I know we, and most other dealers, are at about 65 to 70 percent staffing in all departments. There’s no need for more. How many times have you gone to a fast food place and it’s drive through only? I wanted speakers installed in my car, the available appointments are over two weeks out, when you could buy the product and it would be installed right there before COVID.
Americans accumulated extra savings during the pandemic, but that money is fast dwindling because of inflation.
Some 70% of Americans are using their savings to cover rising prices, a recent Forbes Advisor survey of 2,000 U.S. adults concluded. Among those polled, older adults were more likely to say they have left their savings intact.
In fact, the personal savings rate for April 2022 hit 4.4% — the lowest level since September 2008 — down from 6% at the beginning of the year, according to the Bureau of Economic Analysis, a department of the U.S. Department of Commerce.
And the political elites do not care a bit.
Good news, lumber prices are tanking because homes are not being built much anymore….oh, wait #BidenEconomy https://t.co/LPFFWKUjir
— William Teach2 ??????? #refuseresist (@WTeach2) June 11, 2022
We all know what comes next. We have all seen this movie before. We even saw the remakes and the relaunches and the Part 2’s. We even saw the version where it was made in an alternate universe. It’s always the same though.
1. Use government action to drive up the prices of essentials.
2. Use government action to stabilize prices of essentials (price controls).
3. Complain about shortages being caused by greedy rich people and hoarders.
4. Hunger, starvation, MUCH lower quality of life. Arrests of political opponents for inciting riots.
You would have to have been educated at an Ivey League university with a degree in National Security and Public Administration to have missed that there is always a connection between price controls and shortages. Always. Almost as if one CAUSES the other.
It would be foolish to save cash when the inflation rate is so high that no trusted source will even calculate it. But with an “official” rate near 7%, the value of money saved is being lost faster than an welfare check at a casino.
Investment advisors used to say a nice 3-5% return is all you need for a healthy retirement fund. But with 7+ % inflation, you are losing money every day.
During the Weimar republic, workers were paid multiple times per day so they could spend their money before it got devalued again.
The clown show started early today in DC. They still think people believe this shit. Looks like the commiecrats won’t be happy until they declare Trump guilty of treason and execute him. That is what they do in banana republics is it not? I can only assume since the commiecrats are dragging the US economy down to Venezuelan levels, the law down to USSR levels and education down to Chicom levels that executing the previous Presidente is in our future.
The commiecrats are so afraid of Trump they just can’t control their fear. BTW, if Jan 6 was an attempted “insurrection” what happened on Jan 7 it all just went away? Is that how insurrections usually work? This show trial is really putting the final knife in all hopes for a democommie survival in November. They all look like the same shit-faced dopes that ran Mueller, Russia-Russia-Russia, the first/second fake impeachment. These people are real fanatics. If they ever actually take over we will all be executed just like the Chinese and Cambodian fanatics did to their political enemies.
FJB
President Trump left office with 1.4% inflation.
Inflation today is more than six times what Brandon inherited.
#LetsGoBrandon
#8.6%TransitoryInflation
Bwaha! Lolgf
Teach apparently thinks that Biden has also given the UK France and Germsny all inflation rates as high as the USA
Hairy lies outright to try and defend his communist parties attempt at destroying the US economy so that Barak Obama’s dream may come true.
What was that dream? “To Fundamentally change the United States of America forever.”
The Truth is an ugly thing and facts often make it worse:
Annual inflation rate in France was confirmed at 5.1% in May of 2022, the highest since October of 1985, compared to 4.8% in April.
He referneces the UK: Annual inflation rate in the UK jumped to 9% in April…..OH WOW HAIRY IS RIGHT….except……….. following the increase in the Office of Gas and Electricity Markets cap on energy prices. Electricity prices soared 53.5%, gas 95.5% and liquid fuels 113.9%. Cost of transport also continued to increase (13.5% vs 13.4%), with average petrol prices reaching a record of 161.8 pence per litre in April, compared with 125.5 pence per litre a year earlier.
Germany was referenced: 7.9 percent in Germany in May.
Now the question becomes what is the real inflation in the USA.
DOES THE USA COUNT FUEL AND FOOD WHEN FIGURING THE CPI INFLATION???????
Jun 16, 2021 · As a result, food and fuel prices for these goods are excluded from the calculation of core inflation. The Fed prefers to use the PCE index rather than CPI since PCE tends to provide inflation trends that are less affected by short-term price changes. Also, the Bureau of …
However in Germany, the UK and France. Food and fuel ARE calculated to indicate CPI inflation.
You see the USA uses this really cute accounting trick to FUCK with the PEOPLE. We all buy FOOD to eat its up 18 percent. We all use Fuel of some kind to get to work…..ITS up 53 percent. Power to your homes is up over 100 percent.
The real inflation in the USA is closer to 18 percent….not 8 percent. This is really one of the 1000 reasons why the informed citizen on both sides of the ISLE no longer trust the US government on anything they say or anything they tell us is good for us. Its because to cover their political asses they will say and lie about anything to make themselves look good.
10 pinochio’s again for Hairy.
Teach
Isn’t the US inflation rate just about the same as Germany?
Are the Germans also blaming Biden.
Apparently our economy is held hodtsge to the world market oil price. Regardless of how much oil comes out of the US ground it is sold at the world market rate.
That price is set by the Saudis and UAE
Each year the US energy percentage of renewables goes up,the percentage of fossil fuels goes down
The Saudis know this and are trying to sell us expensive oil because they know the change is inevitable.
Remember!!! The quantity if oil produced here in the USA has little to do with our gas price. We pay the world market price for gas
The price of gas does not depend on domestic production
John-why would we need un-reliables in the first place?
The Bureau of Labor Statistics inflation report did not include the statistics on wage inflation, and I haven’t been able to find the numbers. However, I did find this guesstimate from CNBC:
Guess what an inflation rate of 8.6% and an average wage growth rate of 5.2% means? It means that Americans are 3.4% poorer in May of 2022 than they were in May of 2021.
But that’s only roughly. Remember, as wages increase, some people get pushed into marginally higher income tax brackets, so some Americans are going to see higher percentages of their income go to Uncle Sam.
My wages have increased by zero%. My savings has lost 10-18% of it’s value in the last 6 months.