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December Inflation Comes Highest Since June 2010 As Retail Sales Miss Expectations: Stagflation?
And after all the hype we finally know that December inflation was greater than expected, even as retail sales confirmed that the consumer is much weaker than had been propagandized: step aside word of the year "contagion" and meet your replacement "stagflation." CPI comes in surging at 0.5%, beating estimates of 0.4%, and far higher than November's 0.1%: the highest jump since June 2009. And those readers who have cars will likely be aware that Gasoline jumped by a massive 8.5% in December, the highest in a long time. Broadly, energy jumped by 4.6%. On an unadjusted 12 month basis, gasoline and fuel oil surged by 13.9% and 16.5% respectively. And there will be much more pain in store: somehow December food prices are supposed to have increased by just 0.1% in December: the lowest amount in the past 5 months. This number will very rapidly jump much higher as costs start being pass through. (full report)
And just as unpleasant was the December retail sales number, which was up 0.6% on expectations of a jump in 0.8%. So much for the mother of all shopping seasons. Retail sales less autos moved 0.5% M/M vs expectations of 0.7%, with the previous number being revised from 1.2% to 1.0%. The was no mention of snow destroying the carefully laid out propaganda plan in the release.
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After inflation goes up, then interest rates will go up, just look to the T-Bill yields lately.
And everybody knows how much leveraged our economy is and how hard just a little increase of interest rates can do.
Little Ben knows that the clock is ticking and time will catch up.
The next thing is Kaboooom!
T-bill only need to go up 1 more % and it's over for the FED.
Wages are not going up; high unemployment insures they wont as human labor is on a downward trajectory to just above worthless: an effect of globalization. International corporations benefit; their dominancve assured by their bought off politicians. Union and government jobs pay much more than the private sector does; the reason is they know that if they are not represented, they are fucked. Housing is dead money and will be a NET liability without an annual equitable appreciation of at least 7-10%.
Regular folks in non union jobs will be forced into non living wage conditions, and without a credit card to debt costs forward, the pressure from gas prices will set in and adversely effect middle class oriented retailers. Those that can speculate and play the game right will come out ok; speculation is the new middle class and betting it all on a whim and a prayer... all in on a skewed chart with flash crash bottoms in a market that ignores fundamentals, rally's on bad news for QE expectations, and considers negative equity interest an asset.
I can say one thing. Real inflation is significantly higher than anyone wants to point out. I was doing the weekly food shopping yesterday, 6 rolls of paper towels - 10.88. Cans of soup - 2 bucks each. Gallon of Milk -3.50. The only thing that remains relatively cheap is the high fructose corn sweetened sodas and the frozen ready to eat foods. Everything else is skyrocketing in price. The best investment at this point in time is probably dry goods that can be stored on shelves at the home because as inflation hits these things are going to get really expensive.
Just makin' sure his wave of MBS purchases-to-be is priced nice and cheap whilst laying the conceptual framework for QE to infinity and beyond.
Single-digit year guess on how long until we have debt to GDP that will rival Japan?
Spain and Eire should be easy to catch.
"Stagflation" was introduced to explain what Keynes said could not happen: rising prices and rising unemployment. They even had a "curve" to show the alleged inverse relationship between the two.
The word only makes sense to a Keynesian who thinks stable prices and stable employment are impossible, a contradiction in terms.
sry to steal the topic, but here´s a shocker:
Is China already Number One? New GDP Estimates
http://www.iie.com/realtime/?p=1935
do some research on how those idiots calculate - or rather estimate GDP...actually, who the fak knows anymore, all the numbers are fudged except your (rhetorically) own personal finances and that is probably fucked too because of debt load.
and let us all turn our eyes to the Comex, where the government sponsored and funding "control" of gold and silver are now engineering the prices down for the fun and profit of the banking cartel is going on...
and ..... peasants, there is no inflation. do not think, in any way, you can save yourself with gold or silver......
the CTFC has been tasked with making sure, only JPM profits....
Stagflation?
Is that like inflation, only with horns?
Or defation, only with hooves.
Either way you feel kicked and gored.
No, it's when you "go stag" to an inflation party, while Bennie and the Inkjets buy your neighborhood with counterfeit funds.
Well, BSB got his official reinflation and the middle class little people are in trouble
Truth is, with 1980 methodology, we had it before, 8%
Without a prosperous middle class there is no economy
You forgot the wealth effect of QE!
For social & political analysis : look at the 1930s.
For a more hard economical analysis : look at the 1970s.
Now, mix'em up and welcome to 2011-2020
I have been calling for stagflation while I was still in college in '08. I used the 70's as part of my analysis with assumption that the Fed would pump dollars into the markets, and that trickle down does not exist (I have yet to see a vaild paper to prove the fact). Taking a step back and seeing how over leveregaed we still are (the crisis was supposed to reverse this, but we are fighting reality with fiat), it is obvious that the only thing going on is an attempt to stabilize asset prices. Additionally, the Fed has created quite a perverse moral hazard environment where risk does not exist. This is going to be interesting, maybe the Mayan's were onto something, as I am guessing that this will all start to unravel in about a year. The late 60's into the 70's are a great example to what is going on.
I agree with the Mayan thesis. They must have some how known that we'd leave money creation to a private central bank that charges interest on newly created money, and that we'd give up on precious metals completely and let said central bank print unlimited unbacked paper. Further seeing as they supposedly predicted the end of the world, they must have known that the entire world would globalize and they would choose that unbacked paper as a world reserve currency. They had some serious foresight.
Inkjet Bennie is achieving his objective. His greatest fear is a deflationary Japan-like death spiral. This is exactly what he wants--heat up the economy with some inflation that will hopefully spill over to housing. Unfortunately, he is creating biflation. The most important things to the middle class; wages and their homes are still dropping. Yet what they need to exist; food, gas, healthcare are going up in price. It's the middle class vise-grip economy.
And somehow those ungrateful corporations who are getting their margins hammered don't feel inspired to create jobs.
from what I can see amongst my friends, they're shipping jobs overseas as fast as they can.
Yup...as if they needed a better excuse than exploitable oompa-loompas yonder, there are even loopholes in US method patent law where doing one-step of the 'process' outside the US side-steps infringement or makes it a less egregious variety.
"... It's the middle class vise-grip economy."
Very logical and descriptive
don't forget the hyper-inflationary spike up in taxes.. on hold for the moment.
I've called it that and also "the rack" with inflation pulling one way, deflation the other way
All this time i thought i was feeling 'the love'....
Right. CPI real weekly earnings accelerated into negative territory for Dec printing -0.4% from -0.1% for Nov
+10 to you Caviar and you bi-flation call. You've been, shall we say, right on the money. lol
Thnx. Glad to share with all ZHers
Beatscape, Bennie needs to somehow keep those trillions in 'assets' the FED has been buying all along afloat, somehow. He fears 'deflation' of those MBS and 100 P/E stocks, and is working to 'inflate' them.
they better get the PPT on cstr then, which is the first of many...another 50% haircut and it will look worthwhile.
But, the geniuses knew it all along - "all baked in" mantra starting from aholes like Cranker.
I agree except I don't believe homes prices are important to the middle class. They will go through foreclosure or find a place to rent. They don't have enough assets to worry about the bank coming after them. What they really worry about is food and gas. You have to get to your menial job to feed your family.
Bernanke is the devil.
You are correct. They will find a place to rent.
Rents are not going up. They are the bulk of a monthly budget in the US.
Markets make new highs on this news, right?
silver at least
CPI Real Average Weekly Earnings Dec: -0.4% from -0.1% Nov. (!)
That's change you can believe in!!
Any further Q/E talk of diluting the already ricepaper thin dollar MAY boost stocks a bit, while gas and other commodities and interest rates take a ride on an Apollo rocket booster. I guess thats good for those who live in a self sustaining bubble with no need for food and can just watch their 100 P/E stocks rise, for everyone else its 3rd world livin time.
Are you implying Harry's assertion that a rising diesel fuel index is not a sign of genuine lasting economic growth and simply a result of monetary inflation?
LOL
CPI Energy index: +4.6%.
Food index soon to follow
And so it begins.
Sorry, had to get that in! :~)
high inflation and UE?? how is this possible with the FED experts running the show??
calling barney frank, mr paulson has your unclaimed bag.
calling N pelosi...
was no mention of snow destroying the carefully laid out propaganda plan in the release.
It is all propaganda.
Banks are solvent
FDIC- solvent
States -solvent
Cities- solvent
Fed-solvent
Pension funds -solvent
School loans -solvent
Unemployment -getting better
Manufacturing -up
We are winning the wars
Inflation is not a problem if you don't count the things you buy everyday like food and gas
What inflation ? a game of JACKS still cost 99C at the dollar store same as it was in 1988 ...http://www.squidoo.com/jacks-game-rules
The Bernank prefers to play JACKasS and it looks like he owns the f... game ;)
The reason I've been saying it's not Stagflation: that term was used to describe the economy of the 1970s.
THe key difference with the economy today: Wages are not inflating, in fact they're deflating.
Wage inflation was considered one of the main causes of the inflationary spiral in the 1970s and that became the focus of the Reagan administration. It was the reason behind promoting the LBO boom, offshoring of jobs and anti-union policy
From where I sit wages for upper income earners are increasing. Wages for the middle class are stagnant or deflating.
Agree. But it's the bulge in the middle that moves the US economy as whole. Upper income simply moves money elsewhere.
Jim Cramer's Blog
Daily Booyahs China Rate Hikes Good for Stocks5:58 AM EST
I'm not negative on these hikes -- we don't want China to slam the brakes hard on its growth.
I love Cranker - about 2 weeks of hammering and he will have one of those shows where he looks like a cocker spaniel - "I would buy a little here and wait" - FUCK YOU CRAMER. I would love to see him party with a couple of hard a$$ aryan brotherhood types.
Back up the truck and dump the shit on all of my "friends"
Why oh why can't anyone stop this massive steamroller before it starts gathering too much speed?
Isn't there ANYONE in power that will act?
Do they have to have starving people dying before they do?
Because they're locked in to failed economic policies that worked once upon a time in the 1980s. And those ideas discredited and replaced older ideas that once worked in the 1930s and 1940s. All economic policies have a life-cycle because the world changes if nothing else.
Prices didn't increase but box and serving sizes decreased massively...
Gold? Gold prices aren't increasing
exactly
I wish I could find the raw data used for this metric. Seriously, how can you consistently measure anything as random as a basket of goods for everyone? Do they use the same brands, what is the unit size, where do they shop.
mrdenis,
mmm.....jacks....big jacks...(done in a homer simpson tone, lol).
Inflation....it's so here and so unpleasant already. shit is through the roof. You have to go to the Mexican grocery stores which have 100x fresher produce but 50% cheaper prices. For now.
inflation blows.
Rancho Liborio store, deep discount on avocadoes, but you're risking a knife in the liver in the parking lot.
Your rent is not going up. It is the bulk of your budget. That's why you're not homeless.
You think we have biflation, take a look at UK data:
UK December producer input prices +12.5% y/y. Output prices +4.2% y/y, stronger than median forecasts +3.9% y/y
Let that sink in: costs up 12.5% (!!) while prices received only 4.2%.
Like in the US, business can't pass on costs. Even so consumers are being hit with real inflation. So everyone is screwed
Double dip fears rise.
So Ben's plan is to print even more to make the goods necessary for day to day existence more unaffordable for consumers and producers alike... good plan... certain to work in the long term.
He's a one trick pony. He can't let go of his Friedmanite concepts. Doing so would mean he's out of business and was dead wrong on the recession.
I do not care, "inflation" "stagflation", jsut make this market drop
They will justify the prices by saying that if "stuff" costs more, so should stocks, as long as the .1% cocksuckers keep spending, the consumer is alive and well!
And now we get to see exactly how 'inflexible' demand can be for over-priced commodities.
How much would the price of gas have to rise to null out 12% of the post-tax dollars seen by a minimum wage employee in a given week? Depends how far you 'have to' drive.
Can you walk on air, Mr. inside seller?...ah I see, fastening your golden chute and surveying the carnage below?
http://www.youtube.com/watch?v=AJ5kGqOstMc
What's the rate including ONLY food and energy?
That's what I am buying every week.
Not true. Every week you also buy 1/4 of monthly rent. It's not going up.
Rent's not going up, but the other weekly necessities are. That would be a good index: Housing, Food, and Energy.
Inflation means QE2 is working, after all that was the sole intention, pity about the subsequent rise in interest rates, but shit happens.
Oops, the inflation is in all the wrong places, NO NO NO it should be house prices and other real estate that are going up NOT NOT NOT food and energy.
Oops sorry, believe me though it will work with QE3, and I promise not to cum in your mouth.
Ben, is that you?
This ought to be good for like, what, 20-handles up on the S&P at the open??
Regardless of the disappointing retail sales and the fact that the CPI , although rising , is no where near levels that would force a hike in interest rates , futures are off the lows and climbing . The momentum of the intraday dip buying strategy continues .
Yep - the plan to keep us all poor and stupid is proceeding with remarkable efficiency.
ok...no one said it so I will
GOLD BITCHEZZZ!
I guess the silver lining for no longer being able to afford my car is not having to buy gas.
My enterprise was aborted at birth by loss of home equity line 3 weeks before launch in fall of '08. No bailouts... or even forbearance for Tombo!
(I'd built a granny unit to live in and rented out house... rent covered mortgage... renters defaulted same time as launch aborted on entrepreneurial project when HELOC pulled... could not make house payment for two months... Wachovia/Wells Fargo immediately forecloses... told them when I could get renters could catch up! NO GO! Can't rent out house in foreclosure. I get fucked. Wells takes house. Just so eventually some cocksucker stranger can steal house for peanuts. This is house I had made into viable rental with my own damn labor. FUCK WELLS FARGO!!!! (I used to have perfect credit, never borrowed for trips or toys but to improve home THEY STOLE!)
Let me be clear here: FUCK WELLS FARGO (you can throw in BofA and Chase each for their own reasons)... FUCK THE TBTF BANKS. And FUCK THE TWO PARTIES THAT SUPPORT THEM!
They are destroying real peoples live... and aborting chances for real financial innovation.
They are destroying the energy of this country... their own peoples' potentials to participate.
An old post:
The Individually-controlled/Commons-dedicated Account
http://culturalengineer.blogspot.com/2010/01/individually-controlledcommons.html
You know... I'm no extremist... and the powers-that-be should realize that when people like me... people who really try to do the right thing and make things better... people who try to live modestly, treat others courteously and uphold the responsibilities of citizenship... become absolutely FED-UP... when that happens things change.
Damn... CE, I empathize with you and the other people in our country who are in that situation. Even though my family is hanging in there, I always feel like we could be the next family to get sucked into the Bernank's vortex of terror. We don't use credit cards, we work hard and pay our bills on time. Yet I see our savings slowly getting depleted because the cost of health care, food and fuel keep going up up up. I haven't had a raise in over two years and my husband's company gives only paltry 50 cent per hour raises which gets sucked up by inflation. And yes, I'll say it no matter how many junks I get from some of the jerk traders on this site, the bankers, politicians and elitists who have conspired against us are no better, in fact even worse, than the terrorists around the world they have created in the name of greed. They are monsters and should be charged with treason. I am not an extremist. I don't believe in knee-jerk reactionary violence to solve our problems but that is what it's going to come down to when we reach the critical mass of desperation among the populace.
*middle finger to the NSA Gestapo who is watching every word we type* See y'all at the FEMA camp.
Just to let you know the full force of the farce, Yahoo!Finance is running a headline saying Dec Retail Sales RISE! ust a bit misleading....but in the new USSA the order of the day is flood everything with as much propaganda as possible.
Not stagflation... I can't live through that again.
Maybe Pharoah will give a speech about how we got into the ditch, again.
I think we are at Int term peak inflation.. food riots usually mark this. They were a rioting in 08 just before the crash. It's what they do.
vc
Many of us understand the parallels of the first GD and now this the 2nd GD. I wonder if you all get the irony of Daley's appointment to the inner circles of the WH? In the late 30s, the macro political dynamic was Marxism vs Fascism. I wonder how the WH is going to reconcile the corporate fascist (Daley) with the Marxists (Sunstein, et al)?
Every time I fill up my tank at an ever-increasing price, and watch the slow upward march in the prices of AAPL, other commodities and PMs, I take solace in the fact that this is surely irrefutable evidence of the effectiveness of the Fed's reflation strategy, and that before I know it, other things will increase in value as well, as our inflation perceptions are reignited and take root in a positive way, things like residential real estate, American manufacturing, hiring and wages. <sarcasm off>
Want to reignite hiring? Require that X% of cars, computers, and other retail products (ex food and energy) sold in America be built in America within 5 years. Pick a number that is about 5% above where we are now.
But that will make prices go up? Yeah, so? Who is benefiting from the current price increases? Not you, friend. Barrier to global trade? Who cares - we need to take care of our people first before the global corporations who couldn't give a damn. Time to get selfish, and the door is not shut anway, just closed a little bit.
Time for non-violent class warfare against the super-rich/privileged.
I remember the late 70s and early 80s very well ...
The thing that struck me hardest was the decline in real estate at the same that everything else was increasing price. My family has a summer house on a lake and there were many properties around the lake with roofs falling in and so many for sale. At the same time 80 was a peak in commodity prices and jobs were scarce.
Shopaganda is a term which refers to the total and complete brainwashing of the American public to consume far beyond their wants, needs, or desires. We must shop all the time. If we have no money we merely walk around the mall. Shopping for shoppings sake, like the shoppers at Costco where no one knows in which aisle the products they need are located. Does it matter? Just grab something. To shop is to live, never mind if you don't actually want the thing, you shop for someone else. We shop for the rest of the world.
After the attacks on 9/11 George W Bush inspired the American people to shop, and defeat the terrorists. Shopping is a freedom which is protected by the Constitution, somewhere between Freedom of choice, which all Americans must have at all times, and the Pursuit of Happiness.
Even though the spirit of Christmas is no longer celebrated, except as the religious holiday for some Christians, it is an occasion for a Shopaganda celebration, often lasting from Halloween to the first of the year, much like the 4th of July reminds us of patriotism, one hollow ritual honors another.
Every year the Wall Street Shopagandists come up with inflated numbers, and predict an even better ceremony, even if retailers must stuff their inventory channels to make those numbers, the gods must be appeased. The landfills and storage centers are overflowing, like the horn of cornucopia. Out of sight, out of mind, shop some more.
In a dimly lit factory on the side of the world, poor farmers become poor factory workers in order to fulfill their role. Shopaganda posters decorate their walls, pictures of happy fat rich Americans playing with the goods these workers make. These people believe it too, and will rise up, if their overlords do not provide them with Shopaganda too, our Wall Street bankers are sure of it, blue jeans and rock and roll, Shopaganda, will defeat Communist Ideology.
Yes, stagflation, I told you so:
http://www.zerohedge.com/article/closing-out-2009-style-cash-management-...
Comment 178244, on 12/30/2009.
No food inflation, right! The reason food inflation is not being reported higher it because food price inflation gets hidden as the manufacturers reduce the size of a packaged food product, then charges the same price. The way the food inflation data is collected, this size reduction DOES NOT get captured or reported at all. So for example, if you get a container of ice cream that costs $4, but it gets reduced in size from 2 quarts to only 1.75 quarts, this does not show up as food inflation, even though the consumer only gets 87.5% of the ice cream as before, but at the same $4 price. The per quart price goes up significantly, but the unit price (one container of ice cream) that they collect remains the same.