While the benefits to banks and governments of banning physical cash are self-evident, there are downsides to the real economy and to household resilience.
You’ve probably read that there is a war on cash being waged on various fronts around the world. What exactly does a war on cash mean?
It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.
Having previously shown that money can buy happiness, it appears, as Bloomberg reports, that the cost of buying that happiness is soaring. With well-managed government-provided statistics on inflation, why would one look elsewhere for clues as to the declining standards of living across much of America… but look we did and with wages stagnant, the 2900% surge in prices to Disneyland since 1971 makes ‘the happeist place on earth’ a place only the wealthy can afford to visit.
On the surface, Canada’s 1.2% inflation is negligible, and barely enough to keep up with the pace of overall growth as mandated by a few central bank academics. It is below the surface, however, that one finds the scary truth. Because when stripping away the sliding energy prices (which at the recent pace of short covering among oil speculators are about to surge) some scary numbers emerge, such as a 3.8% monthly jump in food prices, primarily as a result of a whopping 30-40% increase in select meat prices in the last 8 months.
How do ordinary people – which excludes those who work in central banks and have taxpayers fund their everyday purchases, which allows them to fully ignore soaring food and rent costs – survive in an environment of soaring food prices?
As the following brief documentary by CBC’s The National reveals, food inflation means people have no choice but to eat “far less beef” than they used to, “or chicken.” Others are ok with the runaway food inflation: “it doesn’t matter to me, I buy the meat at the price it is and that’s fine with me” say a gentleman who likely works for a hedge fund and BTFD for a living. Continue reading »
Official data show the annual inflation rate in crisis-hit Ukraine has jumped to 45.8 percent.
The increase follows a steep acceleration of 10.8 percent in March, according to the country’s statistics office.
The eastern European nation, which had been the scene of a year of deadly clashes between its army and pro-Russia forces in the east, had a month-on-month inflation of 5.3 percent in February and 3.1 percent in January 2015. Continue reading »
Governments and the mainstream media are fond of reporting inflation figures that strip out things no one ever uses like food and energy. As anyone who follows these things knows, leaving out “volatile” categories that track meaningless price movements in the things people eat and the commodities humans burn to sustain themselves is key when it comes to accurately tracking inflation which is why we can’t exactly sympathize with the following, that seems to indicate that even though everyone with a PhD in economics knows that endless money printing does not lead to inflation, people who aren’t rich are somehow managing to spend a greater percentage of their income on food and housing.
Since the depths of the last recession, the price of ground beef in the United States has doubled. Has your paycheck doubled since then? Even though the Federal Reserve insists that we are in a “low inflation” environment, the government’s own numbers show that the price of ground beef has been on an unprecedented run over the past six years. In early 2009, the average price of a pound of ground beef was hovering near 2 dollars. In February, it hit a brand new all-time record high of $4.238 per pound. Even just 12 months ago, the price of ground beef was sitting at $3.555 per pound. So we are talking about a huge increase. And this hits American families where they really live. Each year, the average American consumes approximately 270 pounds of meat. The only nation in the world that eats more meat than we do is Luxembourg. If the paychecks of American workers were going up fast enough to deal with this increase, it wouldn’t be that big of a deal. But of course that is not happening. In an article just last week, I showed that real median household income is a couple thousand dollars lower now than it was during the depths of the last recession. The middle class is being squeezed, and we are rapidly getting to the point where burgers are going to be considered a “luxury” item. Continue reading »
Last month it was revealed that former federal reserve Chairman Alan Greenspan, the architect of U.S. monetary policy under four Presidents, is anticipating a significant market event as a result of the trillions of dollars that have been pumped into the system over the last several years. According to Greenspan, something big is coming.
His comments were shared by well known resource analyst Brien Lundin, who joined Greenspan for private discussions at last year’s New Orleans Investment Conference. In his latest interview Lundin further clarifies Greenspan’s private thoughts on current economic and monetary policy and sheds light on the former Fed Chairman’s suggestion that ‘something big is coming.‘
Greenspan made some good points to me… He was concerned about inflation… He was specifically concerned in relation to the outstanding, or excess, reserves which are close to three trillion dollars being held on the Fed balance sheet now… That money is just hanging over the U.S. economy like a big water balloon of liquidity and it’s just searching for a pin.
In fact, Greenspan referred to it as a tinderbox of explosive inflation looking for a spark.
Beginning at the time of Disney World’s grand opening in 1971 when Magic Kingdom tickets cost only $3.50, Magic Kingdom ticket prices have increased at a compound annual growth rate of 8.04% – nearly double the U.S. CPI’s compound annual growth rate of 4.13%. The U.S. CPI no longer accounts for the cost of maintaining the same standard of living in America. The Magic Kingdom Price Inflation Rate provides a much more accurate view of real U.S. price inflation.
Well, he finally launched “whatever it takes” and that marks an inflection point. Mario Draghi has just proved that the servile apparatchiks who run the world’s major central banks will stop at nothing to appease the truculent gamblers they have unleashed in the casino. And that means there will eventually be a monumental crash landing because the bubble beneficiaries are now commanding the bubble makers.
There is not one rational reason why the ECB should be purchasing $1.24 trillion of existing sovereign bonds and other debt securities during the next 18 months. Forget all the ritual incantation emanating from the central bankers about fighting deflation and stimulating growth. The ECB has launched into a massive bond buying campaign for the sole purpose of redeeming Mario Draghi’s utterly foolish promise to make speculators stupendously rich by the simple act of buying now (and on huge repo leverage, too) what he guaranteed the ECB would be buying latter.
So today’s program amounts to a giant bailout in the form of a big fat central bank “bid” designed to prop up prices in the immense parking lot of French, Italian, Spanish, Portuguese etc. debt that has been accumulated by hedge funds, prop traders and other rank speculators since mid-2012. Never before have so few—-perhaps several thousand banks and funds—-been pleasured with so many hundreds of billions of ill-gotten gain. Robin Hood is spinning madly in his grave.
Government data reports are so funny. The blaring headlines today tells us that prices dropped in December. We are all saving billions from the drop in oil and gas. Hallelujah!!!
The corporate MSM never digs into the numbers to get the real truth. These reports and their distribution to the sheep are designed to keep you sedated and calm. Facts are not necessary. How this data pertains to your everyday life is not important to the .1% who control the flow of information.
Here is a link to the detailed inflation numbers by category. We already know they massage these numbers to achieve a happy ending, but even the massaged numbers tell an entirely different story than the one peddled to the masses by the government and corporate media.
Lately, there has been much anguished consternation, especially among the tenured US economics professors (primarily those who make 6-digits or more per year) and of course, the Federal Reserve where as we revealed last week, at least 113 government workers make $250,000 (excluding bonuses) and thus all are confined within the cozy cocoon of America’s “1%ers”, about the so-called complete disappearance and collapse in inflation. So to help these ivory tower-confined individuals in their holy grail to rediscover the inflation that is more than felt by the rest of America, here are two simple charts.
Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.
These days the Keynesian chorus in favor of policy activism is so boisterous that a succinct statement to the contrary rarely gets through – especially at Rupert Murdoch’s Wall Street yarn factory. But here’s what penetrated even Brian Blackstone’s filters:
“The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.
When Mario Draghi set off on his latest quest to slay Europe’s deflation monster, after an endless array of failed alphabet soup programs to inject money into stock markets mysteriously failed to fix Europe’s insolvent economy riddled by record unemployment and trillions in non-performing loans, he clearly was guided by this latest Eurobarometer survey of Public Opinion in the European Union, in which virtually everyone across the board admitted that the most important issue facing the common folk in Europe is plunging prices and crushing deflation.
Oh wait… it says rising prices/inflation.
Well, that’s embarrassing. Please ignore everything we just said, because paradoxically to “fix” Europe, Mario Draghi is desperately trying to make Europe’s biggest problem even worse. Or not: surely this is just a case when the 6 members of the ECB’s executive board “know better” than some 330 million Europeans.Continue reading »
The Status Quo is desperate to mask the declining fortunes of those who earn income from work, and the Misery Index 2.0 strips away the phony facade of bogus unemployment and inflation numbers.
The classic Misery Index is the sum of unemployment and inflation, though later variations have added interest rates and the relative shortfall or surplus of GDP growth.
Since the Status Quo figured out how to game unemployment and inflation to the point that these metrics are meaningless except as a meta-measure of centralized perception management, the Misery Index has lost its meaning as well.
I propose a Misery Index 2.0 of four less easily manipulated (and therefore more meaningful) metrics: Continue reading »
When we reported on the government’s decisiosn to withhold irrigation water to California for the first time in 54 years, we warned there would be consequences: farmers are hit hardest as “they’re all on pins and needles trying to figure out how they’re going to get through this.” Fields will go unplanted (supply lower mean food prices higher), or farmers will pay top dollar for water that’s on the market (and those costs can only be passed on via higher food prices). Sure enough, as Bloomberg reports, farmers in California’s Central Valley, the world’s most productive agricultural region, are paying as much as 10 times more for water than they did before the state’s record drought cut supply.