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Inflation: What’s Your Number?
Chris and Paul discuss inflation as a government policy issue, and its impact on purchasing power and retirement.
by Dr. Chris Martenson
Chris Martenson’s Peak Prosperity
For the past 17 years, I’ve been running all over the place educating and warning everyone I could about inflation. Inflation is 100% the product of official policy. Heck, the Fed even has a minimum target for inflation, although they’ve never explained to anyone why they have any target at all let alone the specific rate of 2%.
Over the past 5 years, cumulative inflation is an eye-watering (because we’re all crying) 26.4%, which means if you were earning $100k in 2020 and are still earning $100k, you’ve experienced a $26,400 pay cut. Looked at another way, your taxes went by $26,400 because inflation is, indeed a tax. It operates exactly and precisely the same way as a tax.
In a proper tax regime, the government tells you how much it’s going to take, it takes it, and then spends it. In the illegitimate, and thoroughly immoral inflation-as-a-tacx regime, the government spends the money first, and then you pay for it with your money losing value.
White House: We Didn’t Get Inflation Spike with First Trump Tariffs, But ’25 Different from ’17
by Ian Hanchett
Breitbart.com
During an interview with Bloomberg aired on Thursday’s “Balance of Power,” White House Council of Economic Advisers Chair Jared Bernstein acknowledged that there wasn’t an inflation spike caused by tariffs in the first Trump administration, but argued that things in 2025 are much different from where they were in 2017.
Bernstein said, “I want to give this incoming team the benefit of the doubt. I know some of these folks, they’re good economists, they don’t want to generate higher inflation or higher interest rates, but if you do look at the impact of, say, sweeping tariffs or deportations or fiscal stimulus through unnecessary high-end tax cuts, really also hurting the economy’s fiscal outlook, all of those, of course, are inflationary, and then, if you add in compromising Fed independence, you’ve got a real problem on your hands. I don’t think they want to go there.”
Surprise! Inflation is Not Getting Better
by Jay Davidson
American Thinker
Directors of the Federal Reserve board are admitting that inflation is not coming down, in spite of the massive increase in Fed Fund interest rates two years ago. That rate increase was touted as the solution to Jerome Powell’s “transitory” inflation. I said it wouldn’t work then, and it hasn’t.
Lisa D. Cook, a member of the Fed’s board of governors, said during a recent speech that the labor market has been “somewhat more resilient” since September while inflation has remained “stickier” than expected. “I think we can afford to proceed more cautiously with further cuts.”
Of course inflation is “sticky” — the Fed is not addressing inflation. The Fed caused it.
The solution to persistent inflation centers on the reason for inflation in the first place: excessive money supply. This bout of inflation started in 2008, when the Federal Reserve started printing money, thinking it would stimulate the economy.
Why Banks in the U.S. Are Quietly Panicking
by James Hickman
Schiff Sovereign
Bank of America released its quarterly earnings report this morning, bright and early at 6:45am. And according to their newest financial statements, the bank is currently sitting on a whopping $112 BILLION in net unrealized bond losses.
To say this is atrocious would be a massive understatement. Yet Bank of America had the audacity to say that their “balance sheet remained strong” throughout 2024.
What a hilarious fiction. Do they seriously think that no one will notice $112 billion in bond losses— nearly FIFTY SEVEN PERCENT of the bank’s tangible common equity? How stupid do they think people are?
The Fed Needs to Watch Out: Amid Strong Demand From Our Drunken Sailors, Retail Sales Surged in Late 2024 and Inflation Caught Its Second Wind
by Wolf Richter
Wolf Street
More consumers, more workers, more jobs, more money. GDPNow jumps upon these retail sales.
Retail sales rose by 0.45% in December from November (+5.5% annualized), and November and October were revised higher – October from +0.46% to +0.56%, and November from +0.69% to +0.77% – and it’s on top of these upwardly revised sales that December sales grew by another 0.45%, all seasonally adjusted.
The slow first half was followed by a blistering acceleration in the second half, particularly over the past four months.
Price Inflation Rose Again in December, Climbing to a Ten-Month High
by Ryan McMaken
Mises.org
According to the Bureau of Labor Statistics’ latest price inflation data, CPI inflation in December accelerated while the month-to month increase hit a multi-month high.
The seasonally adjusted Consumer Price Index (CPI) rose 0.39 percent, month over month, in December, rising to a ten-month high. Year over year, the CPI rose 2.88 percent in December, not seasonally adjusted. That’s a five-month high.
Much of this was fueled by ongoing and solid increases in the cost of shelter, energy, and services. Shelter, for instance, rose by 4.6 percent, year over year.
This contradicts months of claims from Jerome Powell and other Federal Reserve mouthpieces who have insisted that price inflation was rapidly returning to the Fed’s two-percent price inflation goal. This was key for the Fed’s attempts to justify the FOMC’s jumbo 50-basis-point cut to the federal funds rate in September.
The Way Out of Our Inflation Mess
For all the excitement about the incoming administration and a return to the 2019 economy, market stability rests on the precarious assumption that the government will eventually put its fiscal house in order.
by Veronique de Rugy
Reason.com
The Federal Reserve’s premature victory lap over inflation reveals a worrisome misunderstanding of the predicament we still find ourselves in. Unprecedented government spending and debt, combined with mounting fears that the debt can’t (or won’t) be repaid, played a misunderstood role in inflation’s rise several years ago. As such, fiscal policy must be part of the solution.
Otherwise, expect the recent acceleration of inflation to stick around or get worse, bringing trouble for the new administration.
The pressure on the Fed to declare the race over and continue lowering interest rates is real. It would be a mistake to cave any further. Some measures show inflation holding steady. Others show it trending back up since last July. Either way, it’s above the Fed’s 2 percent target, and now the 10-year rate is pointing up.
To understand what’s going on, remember how we got here.
Bidenflation’s Ghost Will Keep Haunting the American Economy
by John Carney
Breitbart.com
Trump Inherits Biden’s Costly Economic Legacy
America may be just about done with Joe Biden, but the malevolent economic legacy of his presidency is not done with us.
The latest economic data indicate that Donald Trump will inherit an economy where inflation has become entrenched at a high level, the manufacturing sector is moribund, trade imbalances persist, fiscal deficits remain at unsustainable levels, and consumers view the economy as seriously unhealthy.
This week’s consumer price index (CPI) report showed that inflation accelerated on a year-over-year basis, rising to 2.9 percent in December from 2.7 percent in November, and, on a month-to-month basis, climbing 0.4 percent after rising 0.3 percent in the prior month. While the bond and stock markets were relieved that core inflation came in softer than expected, inflation in the areas that squeeze household budgets hardest—food, energy, and housing—was still very hot. As the saying goes, there’s not much inflation if you exclude the necessities.
Was I Wrong About Inflation and Bonds? Did they Just Start Falling in Sync?
by David Haggith
GoldSeek
With the Dow rallying 700 points for its best surge since November 6, the day after Election Day, and with bond yields getting sharply jerked back down—all due to the CPI inflation report—you’d think it was stellar news. In the headlines, it was, at least, a little bit good, but only a little. Core inflation, which the Fed watches most, dialed back one notch. That’s not much, but it sent the Dow up 700 notches! After a few months of going the wrong way, markets breathed a huge sigh that one measure of inflation had finally reversed direction.
Dig a little deeper than the headlines that were written for markets, however, and the news was a little worse than it had been. Markets that have felt like they were being throttled by inflation for the last couple of months were ecstatic over any relief they could get, so they took the good and ignored the bad.
Progress On Bringing Down Inflation Has Stalled
by John Carney
Breitbart.com
Irrational Exuberance Over a Soft-ish Inflation Report
The market appeared to take Wednesday’s report on inflation as an all-clear signal, triggering a rally in bonds and stocks as investors began to recover hope in future rate cuts.
The Department of Labor said the consumer price index (CPI) rose 0.4 percent in December compared with November and is up 2.9 percent compared with a year ago. While that was slightly hotter than expected, core CPI came in cooler than expected, rising just 0.2 percent month-over-month. That lowered the year-over-year rate to 3.2 percent from 3.3 percent, slightly better than what was expected.
That was the softest reading for core CPI since July. Analysts had penciled in a 0.3 percent increase, which would have been unchanged since the previous month. Note, however, that the unrounded month-over-month figure of 0.23 percent was just a smidge away from rounding up to the expected figure. Still, the decline represents a significant move in the right direction for core inflation.