Financial topics

[Tom Mazanec]

Now estimating next CPI will be 5.73%

https://www.clevelandfed.org/our-resear ... sting.aspx

We will find out November 10 at 8:30 AM Eastern Time Zone.

[aeden]

https://marcuse.faculty.history.ucsb.ed ... 47gWeb.pdf
https://www.zerohedge.com/technology/po ... y-theories

[aeden]

Rand Paul is about 15 years behind the rest of us.
He will never catch up.
He's still playing the Blue versus Red game.
He refuses to state the obvious.
Brandon and his commiecrat party are the enemy from within that our forefathers warned us about.
The Demons are going to lift the SALT cap that even CommieNeoBolshevikCult CNBC admitted will reduce
taxes on the top 10% income earners by $24,000 average.
The uniparty is controlled opposition. American taxpayers are idiots.

[vincecate]

Now estimating next CPI will be 5.73%

https://www.clevelandfed.org/our-resear ... sting.aspx

We will find out November 10 at 8:30 AM Eastern Time Zone.

The recent PCE data is:
May 2021 4.0 percent
June 2021 4.0 percent
July 2021 4.2 percent
August 2021 4.3 percent

Sept Estimate: 4.8 percent

Sept PCE data is due out Oct 29. If we really get 4.8% it might convince people inflation is not "transitory".
So perhaps we don't even have to wait till Nov 10. Though perhaps it takes a couple more months of
this before it really convinces people.

https://www.bea.gov/data/personal-consu ... rice-index
https://www.clevelandfed.org/our-resear ... sting.aspx

House prices are up 12 to 20% depending on who you believe. The CPI "owners equivalent rent" survey numbers are way
behind, showing like 2%, because owners are not really in rental market and so slow to find out what rents are. But eventually it does seem to go
up when rents go up. So it is sort of like there is a bunch of inflation in reality that is not in the CPI yet but will be.

[Tom Mazanec]

Sept PCE data is due out Oct 29. If we really get 4.8% it might convince people inflation is not "transitory".
So perhaps we don't even have to wait till Nov 10. Though perhaps it takes a couple more months of
this before it really convinces people.

If so then mark December 10 on your calendar.

Meanwhile
https://www.youtube.com/watch?v=tho6Ev9 ... Xw&index=1
A Market Insider Just Revealed A Stock Market Crash Like No Other Is Coming In October
100,328 viewsOct 19, 2021

[Higgenbotham]

My more specific predictions would be:

• There will be a major global financial panic and crisis. Supply chains will break, resulting in unavailability of critical raw materials and components. Global trade will begin to shut down. As it begins to become apparent that the supply chain linkages are permanently broken, the global interlinked financial markets will shut down and cease to exist. This will all happen very quickly. It will not take years from the initial panic.
• The focus of governments will turn to controlling their panicked and hungry populations. Due to lack of availability of imported goods and adequate storage "sufficient to reconstitute" a system consistent with nation state government, this will prove to be too little too late and most government will devolve to the local level as populations lose faith in their national governments and the national governments lose the resources and ability to control their populations.
• There will be no large scale nuclear war. Instead, the population will be culled through starvation, local strife (including settling of long-standing scores) and disease. Wave after wave of pandemics will sweep the world.
• Similar to national economies and governments, centralized utilities will fail or become so decrepit as to be unsafe and unusable. All centralized utilities including the power grid will shut down permanently.
• The initial worldwide kill rate during the first couple decades following the financial panic will exceed 90%. The global population will be in the range of a few tens of millions when the bottom is hit in two or three centuries. Similar to the last dark age, the world's largest cities will have a population on the order of 25,000 and a large town will be 1,000.
• Life during the coming dark age will be similar to the last dark age but worse due to environmental damage and pollution.

Regarding the supply chains.

Lately there's been a lot of attention placed everywhere on inflation and the Federal Reserve's statements that "inflation is transitory". I think the Federal Reserve is really focused on the supply chain bottlenecks and are trying to get through them with additional "money printing" hoping that will alleviate the bottlenecks. The more appropriate statement would be for the Fed to say "supply chain bottlenecks are transitory" but they won't say that.

First, we can all recall back in 2006 or so that the Federal Reserve Chairman stated that "subprime is contained". It wasn't. Next, we can recall that when the Fed started QE and added trillions of junk assets to their balance sheet in exchange for money they "printed" and gave to the banks, the intent was to eventually "normalize" the balance sheet by selling the junk assets at a later date. We knew that was not going to happen. Now they have turned the US bond market into junk but interest rates are just starting to rise.

One way to consider what future supply chain bottlenecks might look like would be to look at the path of the Fed balance sheet since QE was started. This is what it looks like:



The path of future supply chain problems will only be for them to get worse with perhaps some slight improvements or abeyances until the financial system finally blows up along with the supply chains.

Regarding nuclear war and the pandemics.

I have believed that covid 19 was created in the Wuhan lab for the purpose of biowarfare against the US, but it was released by accident before it was perfected as a biowarfare agent and before it was intended to be released. Of course, that can't be known for certain.

I also believe that the Chinese and others have several other biowarfare agents that will be released in the future and that will only be one source of future pandemics. Of that, we can be almost certain.

I think China's preferred method to immobilize the US would be to first attack the financial system. That in my opinion is the US' Achilles Heel and where the Chinese will get the most bang for the buck, and they will do that first, even before they attack Taiwan. Then approximately concurrent with their attack on Taiwan they will use biowarfare to further immobilize the US.

[Tom Mazanec]

BlackRock’s Bovine Foolishness, So Dense and Dark it’s Stunning!
https://thegreatrecession.info/blog/bla ... -stunning/

[Higgenbotham]

The clearing mechanisms from inept actors protected from the true velocity of money as we all understand here and the actual mechanisms or lets say traction to natural interest rate to sound money.

Exactly what I mean to convey. Or, the natural interest rate on a deposit account at an insolvent US institution unprotected by the Fed would be high enough to bankrupt the institution. Who pays for that? The payment for that is inflation. An instantaneous absence of naturally occuring deflation is inflation. A chronic absence of naturally occurring deflation is monetary breakdown. All external symptoms of the patient can appear normal until catastrophic breakdown. Or, the appearance of the bridge or that of a population as you pointed out, given that the feedback mechanisms of control are destroyed.

One final note. I don't feel inflation today at 5% is low. Inflation at 5% or even 2% during a time during the generational cycle that should have been outright deflationary is very high. But as I said above 9 years ago, I don't believe that a chronic absence of naturally occurring deflation due to money "printing" by the Fed will lead to "high inflation" like that seen in the 1970s. It will lead to a collapse before the high inflation is seen because too much of the cost increase is being put on the backs of producers or, as I used to say, the cost structure in the US is too high.

[vincecate]

One final note. I don't feel inflation today at 5% is low. Inflation at 5% or even 2% during a time during the generational cycle that should have been outright deflationary is very high. But as I said above 9 years ago, I don't believe that a chronic absence of naturally occurring deflation due to money "printing" by the Fed will lead to "high inflation" like that seen in the 1970s. It will lead to a collapse before the high inflation is seen because too much of the cost increase is being put on the backs of producers or, as I used to say, the cost structure in the US is too high.

I think all sorts of things will just not be available, but the important things that people keep buying, food and energy, will have high inflation.
As a larger fraction of the average consumer's budget is taken up by food, energy, housing, the empty shelves for the other things won't matter so much to them.

There was so much money printed and the velocity of money got so low, that some modest inflation will cause a big change in the velocity of money, and result in more inflation. I really think it is a "genie out of the bottle" situation. But coming months data will tell the tale.

[Higgenbotham]

One final note. I don't feel inflation today at 5% is low. Inflation at 5% or even 2% during a time during the generational cycle that should have been outright deflationary is very high. But as I said above 9 years ago, I don't believe that a chronic absence of naturally occurring deflation due to money "printing" by the Fed will lead to "high inflation" like that seen in the 1970s. It will lead to a collapse before the high inflation is seen because too much of the cost increase is being put on the backs of producers or, as I used to say, the cost structure in the US is too high.

I think all sorts of things will just not be available, but the important things that people keep buying, food and energy, will have high inflation.
As a larger fraction of the average consumer's budget is taken up by food, energy, housing, the empty shelves for the other things won't matter so much to them.

There was so much money printed and the velocity of money got so low, that some modest inflation will cause a big change in the velocity of money, and result in more inflation. I really think it is a "genie out of the bottle" situation. But coming months data will tell the tale.

I believe there will be a period before the financial crisis and a period after that is radically different. If that's true, the question is how much inflation can be pushed before things break. Your guess is probably as good as mine, but my guess is not much more because we have high inflation right now even at 5% relative to my guess as to where it should optimally be.

Regarding food, as far as the radically different after the financial crisis, I thought I had documented it here, but about 7 years ago I had a long conversation with a woman who worked in the big box grocery business for 21 years, most of it in management. I asked her if there is another financial crisis, presumably worse and she agreed the next one will be worse, would the big box grocery business survive. Without batting an eye, she said no and gave me all her reasons which I have unfortunately forgotten. I said something to the effect of, well, I can see you've already thought this through and then asked her if the big box grocery chains go out of business whether a manager like herself would take over an individual store and own it and run it. She said her dream had always been to own a store but that under today's conditions it would be too difficult for a sole proprietor to make it in the business. As a side note, many small cities in Kansas now have city owned grocery stores because the retiring owners can't find buyers and the residents have to decide whether to subsidize a city owned grocery business or go without a grocery store (other than a Dollar General). The difficulties she and others cite (for sole proprietors) are costs and regulations. Much of that will go away because it will have to but there will be some pain as the system lurches down to what some would call a lower level of complexity. My best guess is that while the 1970s had high food inflation, no or few food shortages in the US and no radical system changes, the period after the financial crisis will mainly be characterized by prices all over the map, shortages and radical system changes. I can imagine Washington apples, for example, being very cheap or even free in Washington and nonexistent in Texas.