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It’s the ‘Bernank’ that done it!
Bernanke has made himself (and thereby the entire Federal Reserve) the lightening rod for domestic and international inflation. What a dumb PR move that was. There are any number speeches by Ben and his cohorts where they stuck there neck out and said, “inflation is our goal”. Ben & Co. are going to eat those words. If you ask ten people if INFLATION is ‘good’ or ‘bad’ nine of them would say it's BAD. It is the way we grew up. Ben is doing something bad.
A very small percentage of the population actually understands what the
Fed is doing. Far more people have watched the YouTube cartoon
explanation of QE than have listened to/read Bernanke. But a great
number are aware that the Fed is engineering some inflation. So when
they get hit in the head with some big price increase the first thing
they are going to say is, “It’s the ‘Bernank’ that done it!”
Consider me as a case in point. I already pay a ridiculous $1,629 a
month for health insurance. But today I get this nice letter from United Health telling me that the good folks at the NY State Insurance Commission have approved a 12.5% increase for just the next six months. I am looking at a 25% YoY increase in healthcare cost.
That NY State is granting 25% rate increases is a crime in my opinion.
That Obama Care created a three-year window of maximum gouge
opportunities for the likes of UNH is also a crime. The problems with
health care and the cost of insurance can’t really be blamed on Ben and
the Fed. But I suspect that many folks are going to blame him anyway.
After all, he’s the one who wants inflation, so when we get it, the
fingers of blame are going to be pointed in his direction.
There are millions of Americans who are getting letters like this. You will see stories in the MSM in the next week or so. "Insurance Companies Gouge Customers"
is a good Thanksgiving story. It’s even possible that the crooks in
Albany will be called on the carpet for allowing such an egregious
increase in a basic cost of living. The boys at UNH will defend what
they have done and just blame the increase on INFLATION in the cost of
health care at every level.
I (begrudgingly) accept that Bernanke and the rest of the merry folks at
the Fed don’t really want inflation that just eats up consumers. They
want to see inflation from the demand side as evidence that the economy
is in fact growing. But it is not going to go down like that.
Over the next few months we will see a number of big jumps in basic
costs. Food, health care, insurance, transportation, gas and electric
are all going up in price. We may not see the evidence so clearly in the
headline numbers. My 25% increase in health care will not show up. That
does not matter. Tens of millions of people will feel this pinch. There
will be no blaming of OPEC, or China this time. The blame is going to
be placed squarely on the shoulders of Bernanke and his vocal enthusiasm
for ‘the’ inflation.
I will tell you that I was damn mad to see my annualized insurance bill
go up by 25%. A lot of others will soon feel the same when they get a
similar letter. Or when they look at their next electric bill, the cost
of vegetables or even the price of a pair of jeans. A good number will
say in anger, “It’s the ‘Bernank’ that done it”.
Bernanke has tied his success to a rise in inflation. America is going to absolutely hate that.
Even greater public distrust of the Fed will inevitably follow.
Politicians will jump on the bandwagon (they always do). The end result
will be that QE will be a disgraced policy and the Fed will be weakened
for a long time. Ben will get his inflation, he is also going to lose
his job.
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Bernanke and his band of traitors want inflation in real estate and domestic wages. What they are getting is inflation in health care, government, and international assets (bubbles). He is too damn stupid to understand fund flows or current pricing power. I see how he got an Econ Ph D, but how did the dumb ass graduate from high school?
Looks like the goal is to break China. But I could be wrong.
Wouldn't you be glad to hear that a bank that you owed your soul to had just burned to the ground?
That's what I'm thinkin'!
We basically have a failed political system where the figure heads can neither raise taxes nor cut spending while they run huge deficits. Bernanke is doing what any good court finance minister would do under the circumstances and preserving the soverign's ability to borrow while urging the government to get it's shit in one bag. The problem is the political system is failing and Ben can't do anything effective by himself. People do blame him for trying though. Perhaps he does make it worse by elongating the death but if he didn't do that the narrative from these same folks would be that he killed the king. A very tickilish position to be sure.
I find myself thinking this at times, too. It is certainly true that congress and the executive branch are to blame for the spending that got us here.
--mamba-mamba
Yes, We are Hooked on Hedonics! That's It!
So, Negative CPI Forever.
Perhaps it can end when the can of beef cat food can replace that T-bone steak?
No, it's when the cat itself replaces the T-bone steak.
Put it on toast and call it a steak sandwich.
New and Improved!
Same Great Taste, More Bone!
Hrmmm. Didn't think of that.
(/~
there is plenty of backdoor inflation, that's for sure, as costs stay the same, while PCE, or wages, benefits, etc, do not rise, or actually drop. On a case by case basis the falling wage syndrome seems unlikely, but statistically it notches up each time one more guy is laid off. My guess is assets and wages are falling faster than core CPI, (the inverse of the housing bubble, and a normal thing) people are losing purchasing power. That isn't the sort of inflation Bernanke wants (too much money chasing too few goods)
Unfortunately history shows us that the populace will only be suppressed for so long and after that the lid blows off. Compare our current culture that of France circa 1790. If you truly believe that history is only a recurring series of events...perhaps the elites (and who knows exactly how they will be defined) should prepare to lose their heads both figuratively and literally.
That's more like it! Yes, start the Guillotine construction!
Bruce, insurance is not insurance, it is an almost direct payment to pharmaceutical companies, lawyers, and insurance company executives.
I hear you, that is an unconscionable amount, that you should be saving. That will be $24,000 a year - that would pay lots of bills.
Do it the way the illegals do; rent an apartment or home, go to emergency room, when the bills come in, move to another place or town or go out of country and come back three months later in a different home and job. Cha-ching! Free medical care! The only way they do this is with legions of people like you believing they are being responsible and doing the right thing.
Yep, but meanwhile, if you wonder why insurance goes up sky high...we have similar concerns here in France as well, here is a good start for an explanation
http://www.oblomov.fr/?p=1938&lang=en
The people have no bread!
Then let them eat Twinkies!
"The modern era has unfolded in the shadow of the French Revolution. The growth of republics and liberal democracies, the spread of secularism, the development of modern ideologies and the invention of total war all mark their birth during the Revolution."
Wow, thanks for bringing up the French Revolution. Looks like I'll have to read more about it.
Just go to Wikipedia and find "Storming the Bastille". A good starting point.
don't forget to read about Napoleon (I, II & III).
Good spot to compare notes.
Scott brand 1000 sheets per roll one-ply TP until this summer was 4.5" wide and now it's 4.1" wide. Another form of price inflation. And considering how much TP a mammoth uses, that really pisses me off. But taking a moment to be serious, water rates up last year, electric rates this year, by large amounts on both, not small. Property taxes up, wife's health insurance up. No insurance for me, not enough money and wife looses hers after the new baby is born. Would like to take b9k9's suggestion and relocate to wife's home country but can't sell the business. It's starting to get scary as we slip out of the middle class while we're watching wall street and TPTB suck us dry.
I have been getting boneless, skinless chicken breasts for $1.77/pound. Crazy. It has been on sale- though not even advertised- for about a month now.
There's a lot of competition in my area, so I am rather fortunate in that way. Lots of sales. If I go to three different stores (all within two miles of each other, by the way...), I can save about forty percent on my grocery bill.
But the chicken breasts...I wonder what that's about. Really quite a mystery. Needless to say, I have a freezer full.
orly, just remember to balance those cheap chickens with some fresh-picked country veggies. it's important to keep the immune system in tip top shape when eating those birds. what doesn't kill ya makes ya stronger :~)
I am partial to steamed sweet potatoes with Greek yogurt. Throw some garlic and chives (and, no, not fresh. They are like four bucks for a sleeve...) into the yogurt and go to town.
Chives and garlic are 2 of the most forgiving things to grow, they even like patio pots.
yup
And with a little luck the power will stay on.
I am imagining the horrid smell after a couple of days...
Smart monkeys barbeque and make friends, riders on the storm.
Power goes out you fire up the grill and cook everything, invite the neighbors over and have a keg appear. What's the problem?
It sounds like you've been through a hurricane. Same scenario, only Anheuser Busch donates cans of water.
I dunno, my rabbits get fiesty and nervous whenever I fire up the Weber (literally fire, no propane for me)...maybe cuz there is a keg missing?
and its happening everywhere. smaller portions in newer packages.
Hedonics is supposed to take care of your, umm, problem. My question might be, since I shop, is what happens when comparable products don't offer a unit breakdown, such as cost per sq yard, or their unit breakdown is in different standards. Say Sq inches on one roll, sq yards on another. So is anybody looking or is this just one more consumer agency gutted for cost saving efficiency.
If you read the BLS boilerplate it all seems on the up and up, and of course there is the measure of fungiblilty, people buy chicken when beef prices are high. and the store is sold out of chicken by the time you get there, and there are no more rain checks are there?
My healthcare goes up 10% in Dec.
Anecdotally: I was at Sam's the other day and looked at the mouthwash selections. There is unit pricing with brands differing thus: price per ounce, price per liter, price per piece (2-pak). A lot of the same in coffee pricing as well as packaged nuts. Now how can ya do comparison shopping like that?
woolly
I don't know what you are seeing, but those that collect government paychecks think the economy hasn't skipped a beat.
Meanwhile the private sector middle class and especially small business are being bled dry.
I collect a "government " paycheck, and I know things are not fine. As Wooly says, I choose not to have health care either. Its a risk, but if anything really bad happens, there is always a .45 Dwyer style. JK, of course.
http://www.youtube.com/watch?v=CUG0oD2eGlg
Bled dry, yup. We do not buy anything unless it is absolutely necessary.
Flooding the market with newly printed (digital) dollars through the primary dealers is going to generate inflation. But it won't immediately show up in the price of groceries, clothes, basic utilities, gas at the pump, and most things that most consumers spend most of their money on.
That's because regular Joes aren't seeing any of those newly printed dollars. The crisp fresh electronic ones and zeros flow into the primary dealers and out to their bonus pool, select hedge funds, and various well-connected Wall Street operators. This creates rampant inflation in things that Wall-Streeters buy: stocks and bonds, art, vintage Ferraris, country estates in Westchester. Because there's more new money chasing a limited set of assets.
Oh, and also, health care premiums, up the Hudson and into Connecticut. Because the insurers know where the willingness to pay has plenty of slack.
Average Joe will see inflation because of dollar weakening, resource scarcity and trade distortion. But that's driven by fiscal and policy stupidity, not a purely monetary phenomenon.
PS Nice house, Bruce!
huh?
Why dontcha just keep those premiums and buy gold coins instead? I'll betcha most any Doctor would be happy to grease the skids for ya when you end up in a hospital if a coupla Kruggerands cross his/her palm!
Airport detectors now set to catch such coins of value and prop 19 contraband going forward. Next step will be the interstate license plates stopped for little people transferring their junk around to avoid the fly traps.
Yeah you probably want to blank that out a bit better...
There ya go.
Are you saying the TBTF and their ilk are not in the commodities markets ?
Bruce is right- the middle class will get inflation in spades, while income declines or stagnates.
Stagflation, Scene II.
I don't understand how manipulation in the futures markets can really impact long-run commodity prices for the consumer. I figure supply and demand have to drive the spot market where users actually take delivery, unless an investment bank decides to fake scarcity by filling oil tankers or whatnot (which I guess they do, sometimes).
I'm not saying that there aren't temporary run-ups and crashes as speculators game the system and make a few percent here and there. But if the price of copper or cocoa or cotton goes up and stays up for the long run, that has got to be driven by production and consumption and exchange rates and scarcity and trade, not options or futures positions.
I probably just don't get it.
It doesn’t long term but define long term. Manipulation can be maintained for years or decades, but eventual the market wins. Look what the Hunt brothers did to the silver market before the government changed the margins, and then tell me the banks could not manipulate a market more than some millionaires. This is why the CFTC is suppose to have margin limits and contract limits, but everyone is limited except for the banks.
Yep. You don't get it.
Read this (or read it again).
http://johannhari.com/2010/07/02/how-goldman-sachs-gambling-on-starving-...
It is time for the long knives. Formal execution is too good for these scum. Milestones
Long knives are too good.
Read
Taibbi’s Takedown of ‘Vampire Squid’ Goldman Sachs From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it againBegin about here
http://www.rollingstone.com/politics/news/12697/64796?RS_show_page=4
It goes into their manipulation of the CFTC and how it enabled their recent manipulation of oil and food.
I fully expect a complete replay of all of this under the cover of "inflation" due to QEII.
Good links and suggested reads. thanks.
Agreed. The US is looting the world but the loot is extremelly unevenly shared amongst US citizens. The reason many of them got angry.
I would not understimate the very fact that wall streeters and the likes compete over the same territory in the US as your casual US citizen. Westchester estates are indeed nice but wallstreeters will get to diversify over other environment items in the US as Weschester is too limited.
Retrench now, buckle down and save your money. I have been a broken record to my family and friends over the past two years. Soon enough, though, they will see what I have been talking about.
Hopefully, they won't confuse the messenger (me...) with the deeds. All I can say is, "I told you..." but that's not my style.
:D
Same here, though some of my faimly are starting to (begrudingly) agree with me and see the light. I hate feeling good about being right under these circumstances, but at least the people closest to me are beginning to come around.
Thank God for small favors!