from Kitco NEWS
Inflated…
by Karl Denninger
Market-Ticker.org
Expecting more rate cuts?
Well, now both the CPI and employment report say you’re nuts.
Now the markets say yes — and in fact they already have with the IRX (13 week bill) trading at 4.53% right now. So in point of fact the markets, which always drive rates (not The Fed), are indeed trading below Fed Funds.
Worse, the TNX, the 10 year, is still trading at 4.1% this morning meaning the 13/10 year is still deeply inverted.
Now add into this not one but two serious storms and the damage they have caused — which of course will spike demand for all manner of things. Have we forgotten the most-basic economic equation, MV = PQ?
Beneath the Skin of CPI Inflation: “Core CPI” Accelerates for Third Month On Sharp Flip of Used Vehicle Prices, Sticky Services Inflation. Gasoline Plunged
by Wolf Richter
Wolf Street
Surging homeowner insurance and other homeowner costs fuel OER CPI, which is now hotter than rent CPI.
On a month-to-month basis, the “core” Consumer Price Index – which excludes the volatile food and energy components – rose by 0.31% (+3.8% annualized) in September from August, the third acceleration in a row, and the biggest increase since March, driven by suddenly rising prices of used vehicles, in what is a sharp flip from the steep plunges before, and stubbornly high inflation in services (blue line in the chart below).
America is Now On “the Second Half of the Chess Board”
by James Hickman
Schiff Sovereign
Over fifteen centuries ago, according to an ancient Sanskrit legend, a mythical Hindu priest named Sissa was ordered to invent a new board game to entertain the king of Taligana.
Sissa labored over the task for quite some time, but he eventually brought the King a military strategy game with a 64-square board and beautifully hand-carved pieces. Today we call this game chess. And according to the legend, the King was absolutely enamored with it.
So enamored, in fact, the King offered Sissa any reward he desired. So, the priest asked for a single grain of wheat to be placed on the first square of the chess board. Then two grains on the second square. Four grains on the third. Eight grains on the fourth. And so on.
The Big Con: No Matter the Form, Easy Money is Still a Fraud
by Jane L. Johnson
Mises.org
P.T. Barnum purportedly proclaimed that “There’s a sucker born every minute”, though there is no proof that he actually said it. Whether true in Barnum’s time or in today’s social-media era, however, the phrase describes those gullible enough to believe anything, even when their better judgment (if they possess any of that) tells them otherwise.
Now comes a story about TikTok, where 40 percent of young adults get their news these days. Recent news sources report TikTok videos portraying people believing they could get “free” cash from Chase Bank ATMs. These videos showed people depositing checks for large sums of money at Chase ATMs, and then making withdrawals for smaller yet substantial amounts, leading them to believe they had discovered a computer glitch to take advantage of. One video viewed over 100,000 times shows a young woman calling her mother and telling her she could get $40,000 to $50,000 out of her Chase account by depositing a check and taking advantage of the “glitch.”
Inflation: Consumer Price Increases in September Come in Slightly Hotter Than Estimates
by Alexandra Canal
Yahoo! Finance
A closely watched report on US inflation showed consumer price increases ticked lower on an annual basis during the month of September but “core” prices remained sticky, according to the latest data from the Bureau of Labor Statistics released Thursday morning.
The Consumer Price Index (CPI) increased 2.4% over the prior year in September, a slight deceleration compared to August’s 2.5% annual gain in prices. The yearly increase, which was the lowest annual headline reading since Feb. 2021, came in hotter than economist expectations of a 2.3% annual increase.
Kamala Harris Drinks Beer with Stephen Colbert While Americans Pay 16 Percent More for Beer Under Biden-Harris Inflation
by Alana Mastrangelo
Breitbart.com
Vice President Kamala Harris had a beer with Late Show host Stephen Colbert on Tuesday evening. Meanwhile, inflation has soared under her watch, leaving Americans paying 16 percent more for beer than they did when Trump was in office.
In an apparent effort to make Harris look more relatable, Colbert insisted on having a beer with her — a nod to the old adage that a politician is considered more likeable if one would enjoy having a beer with them.
“Elections, I think, are won on vibes, because one of the old saws is — they just want somebody they can have a beer with. So would you like to have a beer with me?” Colbert asked Harris.
“Now, we asked ahead of time, because I can’t just be giving a drink to the Vice President of the United States without asking,” the Late Show With Stephen Colbert host admitted. “You asked for Miller High Life.”
The Bright Line from Inflation to Federal Control
by Jay Davidson
American Thinker
Inflation did not start because the supply of goods and services was scarce and demand high. If that were the case, then Fed Fund interest rate increases, starting in 2021, would have reduced inflation much lower than 4%. Instead, rate increases, especially the rapidity with which the Fed increased them, bludgeoned and depressed the private economy.
The seeds of the current, extraordinary inflation cycle started growing in 2008, and for a very different reason from supply and demand.
Before we discuss this cycle, let’s talk a little about Monetary Policy. The Federal Reserve has several powerful tools at its disposal. As just mentioned, the current Fed targeted overnight rates that directly affect a depositor’s interest income (a bank’s cost) for deposits.
Banks balance their accounts every night, and if they have excess liabilities (deposits), then they transfer those excess funds overnight to their account at the Federal Reserve.
Bond Market Smells a Rat: On Eve of CPI Inflation Data, 10-Year Treasury Yield Jumps to 4.08%, +43 bps Since Monster Rate Cut
by Wolf Richter
Wolf Street
Fed is seen as deprioritizing inflation fight, while a tsunami of supply heads for markets.
At the auction today, on the eve of the release of the CPI inflation data that may “surprise” markets with a further acceleration of inflation, the US Treasury Department sold $39 billion in 10-year Treasury notes, maturing on August 15, 2034, at a yield of 4.066%, substantially higher than the yield at the last 10-year Treasury auction on September 11 of 3.648%.
There was plenty of demand at the auction, given the juicy yield – yield solves demand problems, that’s what yield is for – including from foreign investors. The total amount bid was $97.3 billion.
Trump is Falsely Blaming Harris for High Prices. His Plans Will Cause Huge Inflation
The pandemic, Russia-Ukraine war and corporate price-gouging have all contributed to inflation – not Kamala Harris
[Ed. Note: Ha ha ha ha ha…]
by Steven Greenhouse
The Guardian
As the presidential campaign enters the home stretch, one of Donald Trump’s most dishonest – and effective – attacks is that Kamala Harris is to blame for inflation.
That attack makes no sense. Several things caused a surge in inflation, but the US vice-president wasn’t one of them. Blame inflation on the pandemic or on Vladimir Putin’s war in Ukraine, but don’t blame it on Harris. Blaming her for inflation makes as much sense as blaming her for the leak in your roof. In seeking to blame Harris for inflation, Trump is absurdly trying to turn her – a vice-president who, like other veeps, has very little power – into some all-powerful economic tsar who somehow controls everything from egg prices to gasoline prices.
Starbucks: The Rise and Fall of the Inflation Café
Starbucks keeps jacking up prices, slashing rewards, and making their loyalty program suck more every year. What used to be a cool spot with solid rewards now just feels like a money trap, where loyal customers are expected to spend more and get way less in return. Their brand? Totally wrecked by greed and bean counters.
by Kerry Lutz
Inflation Café
For years, Starbucks was the go-to spot for coffee lovers who knew they could count on the company to treat their loyalty with respect. They offered a simple rewards program, prices were manageable, and it felt like you were part of something more. Fast forward ten years, and Starbucks has gone from fostering community to fostering corporate greed. It’s not just about coffee anymore—it’s about how much they can squeeze from your wallet while giving you the least in return. If you’re still a loyal customer, brace yourself—Starbucks has been rewarding your loyalty with disloyalty.
The Relentless Price Hikes
Let’s talk about the elephant in the room: the price increases. Over the past decade, Starbucks has ramped up prices every few years. In 2014, a medium-sized cappuccino set you back about $3.65. Now, in 2024, that same drink costs a whopping $5.25. That’s a 44% increase! Meanwhile, your paycheck probably hasn’t gone up by 44%. But for Starbucks, inflation and operational costs are just part of the excuse. Each price hike is just another way for them to cash in on their loyal customers.
Here’s a quick rundown of how they’ve bumped up prices over the years: