Lockhart Speaks: Ignore Reality, Inflation Is Transitory

Tyler Durden's picture

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-Michelle-'s picture

And, third, to the extent that some goods and services have these commodity inputs, the pass-through to ultimate consumer prices is limited.

Yeah, I think I'm going to go with the Wal-Mart CEO's take on this.  Pass-through is not going to be limited for long.

Mike2756's picture

So, corporations and the consumer will be crushed by higher prices. voila'!. is transitory, yes?

MarketTruth's picture

INFLATION FACT: My very close friend works for one of, if not THE largest food wholesaler within the USA. While food did go up on the wholesale level on many products Jan 1 (2011) to the tune of ~4%, the notice just came out that MANY food items are going up next week at the wholesale level from 4% to over 10% per item.

Also, there was an alert that some products will be changing their container size, generally keeping height and width yet cutting down on the depth (remember, shelving space is set for size, yet depth can easily be dealt with in retail locations). Again, this is FACT and coming from one of, if not THE largest food wholesaler in the USA.

spiral_eyes's picture

eat ipad2 instead, that is deflating. crunchy and delicious consumer electronics.

spiral_eyes's picture

not to mention delicious and nutritious nflx nom nom nom nom

tarsubil's picture

INFLATION FACT: The chicken strips I bought at Chick-fil-a last week closely resembled chicken nuggets I bought 2 years ago.

-Michelle-'s picture

So, they're probably closer to what an actual portion size should be.  I suppose that's the silver lining of this. 

We don't do fast food anymore.  We have a limited amount budgeted for restaurant dining and we sure as heck aren't going to waste it at a drive-through.

PhotonJohn's picture

You may know what your budget is for restaraunt but most Americans do not. I am afraid that the only way most will be able to tell is when they look at their account one month and the credit cards are maxed and there is not enough money for the mortgage.

tarsubil's picture

I'm supposed to eat 1 g of protein for every pound of muscle. This is no where near what my protion size needs to be. That said. I love you Michelle.

Rikki-Tikki-Tavi's picture

And since we all know the raw material prices have gone up a great deal more it is very hard to imagine margins not being squeezed significantly - we will start to see the extend next week as Q1 numbers starts to come out.

DavidC's picture

What with his speech and Christine Romer's comments yesterday I feel positively euphoric.

Or not.


ElvisDog's picture

The Romer interview yesterday was stunning. Her delivery with that sunny little smile and laugh. At first, I thought "she can't be that stupid". By the end of the interview, I was coming to the conclusion "my God, she really is that stupid". The wonder of it all is how someone that stupid could be so successful in our society. Amazing. If anyone hasn't seen it, look it up.

Best line of the whole interview was when she said "our academic models show that QE works".

overmedicatedundersexed's picture

elvis, you do not understand the power of our new mind altering antipsycotic meds..a little lithium, a lot of abilify and seroquel..and she is ready to go...it just sad that those also cause weight gain and diabetes but on her the fat is just a reflection of her inflated self image.

ReeferMac's picture

You gotta be fucking kidding me!

One Goobermint Hack comes out and says Fuel is 25% of American's budget, Housing nearing 50% (which means' it's not really all that bad out there).

This dickwad comes out and says 66% of American's budget is spent on services (e.g. Netflix).

Even my 2nd grade Son can do the math on that one?

Impeach them all!

EscapeKey's picture

But actually, he thought as he readjusted the Ministry of Plenty's figures, it was not even forgery. It was merely the substitution of one piece of nonsense for another. Most of the material that you were dealing with had no connection with anything in the real world, not even the kind of connection that is contained in a direct lie. Statistics were just as much a fantasy in their original version as in their rectified version. A great deal of time you were expected to make them up out of your head.

ElvisDog's picture

Orwell's vision of Big Brother was genius to be sure. I just wish he hadn't indulged himself in the romance between Winston (himself) and the hot, young party member. I was constantly distracted by the thought that there was no way this hot, young thing would be attracted to and pursue a middle-aged, depressing, low-level guy with a weeping sore on his leg.

WinstonsPetRat's picture

Depends. In that world, similar to one we now inhabit, where was she ever going to find someone who she could trust with such a relationship. I know i've been looked at as being depressing before, it's because i am, because there are so few people out there I trust to understand the world around them. It shows unfortuantely, and it makes social interactions with the ignorant lower and arrogant middle very difficult, and utterly futile. As for what women want in relationships at the moment..... and they wonder wh the divorce rate is so high. :)


Besides there are far worse places to have a weeping sore.

aint no fortunate son's picture

Inflation will become transitory only when the FRB has become transitory

Infinite QE's picture

+1 with all the Fed governors swinging from lamp poles with piano wire around their necks!

Cdad's picture


Agreed.  What has been so shocking in recent months is the discovery of just how fucking stupid the criminal syndicate of bankers really is.  Just moments ago, while trying to pimp yet another reason to buy fucking equities, a criminal syndicate Wall Street banker actually said, "In China, there is demand for food."  Now I did not graduate at the top of my class, I confess.  However, it won't be said about me later that folk did not know if I was smart enough to continue breathing. 

No...China demands food...and from there...buy equities?  Fuck me.  I guess when you've been talking into the echo chamber of the BlowHorn [CNBC] for as long as these guys have, and without the disruption of any thoughtful questions from the BlowHorn crew, I guess whatever you say starts to sound good...to you.

This banker crew...these brokers...analysts...so many of them strike me as "bag of hammers" stupid.  And yet, these are the big bucks guys.

That Peak Oil Guy's picture

Services are provided by humans.  Two of the primary inputs into humans are food and energy.  Ergo, rising food and energy costs will result in rising services costs.

Due to high labor costs in the face of demand destruction most services companies have been cutting corners in their staffing levels for a long time, resulting in quality problems.  Either they will need to start hiring to get quality back or we may see even more demand destruction in services as people decide they don't need services that don't provide a solid value proposition.

Yeah, commodity costs have nothing to do with services.


FunkyMonkeyBoy's picture

Seriously, why are these criminals still alive on this planet?

What i don't get is why do americans have all this home weaponary and right to bear arms bulls**t, if not for times like these when the country is being destroyed from the inside and the perpetrators of this mass genocide are easily identifiable...

... what do americans use their guns for? Opening beer cans and switching off lights like Homer? 

Snidley Whipsnae's picture

History illustrates that people revolt when they become hungry... Americans are not hungry...yet.

Monday1929's picture

I fear that people with thoughts like this will decide that with the death of the Rule of Law, it may be appropriate to assasinate leading bankers. That is why we must urge our elected representatives to work even harder for our collective good.

Bicycle Repairman's picture

Americans will use their weapons in defensive (legal and justified self-defense) mode only.  Assassinating bankers is unadvisable for several reasons, including it will solve nothing.

hedgeless_horseman's picture

While America will use her weapons in defensive (Libya, Kuwait, Iraq, Afghanistan) mode only?

Bicycle Repairman's picture

Protection from individual fellow citizens.  Don't try to take on government agents.  They are better trained and equipped.

FunkyMonkeyBoy's picture

Land of the free, home of the brave. Eh?

100% facist society. Mission complete.

Golden monkey's picture

Retail inflation is a one way train.

No big mac flippers will be ordered to drop the prices.

Bernanke is not a lyar; he's just insane.


Catullus's picture

Boils down to "Commodity price inflation is a result of one-off supply and demand 'pressures' (despite a considerable absense of any supply destruptions). A lot of the price inflation is in the service sector (a good, but completely unrelated and possibly counter point the first point). And finally the end-use price inflation is not that bad because my 45% weighted to housing CPI metric says so."

Mercury's picture

These pressures are largely the result of supply-and-demand factors...

As if the price of everything else in the universe isn't largely the result of supply-and-demand factors.

bingaling's picture

Yes exactly. There is a large supply of dollars chasing a limited amount of goods -

The larger the supply of dollars the greater the cost for that limited amount of goods . It will also result in increased sales for businesses yet they sell less . Which results in poor employment . Less employment the less people there are to buy houses . Even though businesses will have higher earnings it does not mean their profits are rising when compared to the "transitory" inflation .

Snidley Whipsnae's picture

Lickhard jawboning again...ignore the blowhard.

Flasher will jawbone later today...you will hear more of the same bs.

earnulf's picture

Two thirds is service oriented?    Maybe for the upper 5% of Americans, the rest of us have to buy groceries and fillup the tank.   For the lowest 50% that is more than 33% of our disposable income.

That "one-time" pressure on commodities is the flush of the dollar into the toilet.   Watch the pressure on this one!

magis00's picture

$61 for me to fill up last night.  And I'm sure it's not merely $3.79/gallon this morning, since WTI keeps going up. 


That's 2 1.5 oz/Ag!  Fucking crazy.

-Michelle-'s picture

Truly.  Our services are barely $100 a month.  That's a $7.99 Netflix sub, internet, and $25 put aside to refill our cell phones as needed.

Meanwhile, we just increased our grocery budget by $100 and we're signing up for a CSA and looking to buy a quarter beef to keep things under control for the next year.  We planted our garden and put in 10 fruit/nut trees.

These people have no idea what's going on out here in the real world.

IEVI's picture

Now you get it...you and the lower 95% don't matter to the fed.

Urban Redneck's picture

The sole purpose in allowing 2/3 of the population to work is so that 100% of them may serve the FED.  The other 1/3 is unemployed. 

TraderMark's picture

The always entertaining Marc Faber 'doom gloom and booming' on CNBC this morning - 11 min vid


Josh Randall's picture

They cut out the part where Liesman threatens to hunt Faber down and eat him if he hears anymore negative discourse

Snidley Whipsnae's picture

Marc Faber right on as usual. CNBC bobble heads floundering as usual. One unusual bit was a brief comment about 'class warfare'...I haven't heard that phrase in some time.

blindfaith's picture

Jusus...no wonder we have global warming with all this hot air BS never ending spew.

TaxSlave's picture

Ha, 'two thirds of spending is on services, so inflation in the price of goods you need to survive is meaningless'.

Services are overhead for production of goods, or else they are a flat out expense with no return.

It is impossible for services to generate excess wealth.  Wealth spent on services must first be generated in the form of products and there must be a surplus above baseline consumption in order to afford them.  You can't get rich if you and your neighbor take in each other's washing and neither of you produce anything.

Our government and entitled classes have reached the tipping point in predatory behavior.  Things will slide downhill from here as assets built up in previous generations are consumed, inflated and taxed away for the benefit of the Tapeworm Society.  At the end of the game, the banks own everything, enforced by the government gun, and production will be taken over for your own good because you are too greedy and would charge too much for your work if you were free.  You will be told that freedom was tried and it failed because you are too greedy and untrustworthy.

I gotta stop listening to 'progressive radio' on the way to work.

UninterestedObserver's picture

See you are completely wrong - YOU can't get rich but the assholes that produce nothing can because they are printing money like crazy. 

TaxSlave's picture

Yeah... They're smarter than us and we NEED them.

Edit: And they completely disarm us with their moral arguments, we should be guilty if we profit and survive even a little better off than those who do nothing.

UninterestedObserver's picture

Yes the army of PHD's that are destroying our world can do no wrong - you must obey 

Monday1929's picture

I was wondering why I was not getting wealthy taking in my neighbors laundry, and he mine, as per the "Taking in Your Neighbors Laundry for Dummys" book. Was Eddie Cantor wrong?