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This Is Not The Inflation You Are Looking For

Tyler Durden's picture




 

Because one chart is worth a thousand Fed Chairman press conferences...

Courtesy of Sean Corrigan of Diapason

 

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Fri, 05/13/2011 - 09:12 | 1271297 Xibalba
Xibalba's picture

'transitory'

Fri, 05/13/2011 - 09:18 | 1271305 NOTW777
NOTW777's picture

so says pimcos EL

Fri, 05/13/2011 - 09:29 | 1271348 tecno242
tecno242's picture

If Pimpco thought inflation was transitory.. they sure as hell wouldn't be 23% net short treasuries.

Fri, 05/13/2011 - 15:04 | 1272529 DosZap
DosZap's picture

Uh, even morons get that, it would show the REAL rate.

Why even bother showing a lying sack of flaming feces numbers, and leave out the main costs of sucking oxygen?.

Add 10% to it.

Fri, 05/13/2011 - 22:15 | 1273604 XPolemic
XPolemic's picture

If Pimpco thought inflation was transitory.. they sure as hell wouldn't be 23% net short treasuries.

LOL. Wanna try again?

A short treasury position is a call on higher interest rates, which is deflationary (usually).

Also:

1. PIMCO holds 89B in cash. Cash loses it's value in an inflationary environment.

2. PIMCO sold down it's MBS positions. Mortgage Backed Securities are worth more in an inflationary environment, and can go to nothing in a deflationary one (as the mortgagees go under water and default).

3. As mentioned above, fixed income assets decrease in price when interest rates rise, so taking a short position against FI is a bet on deflation, not inflation.

Of course, Tyler thinks that PIMCO just made the mother of all errors betting on deflation, and I would personally have to agree. In order to get deflation, the Fed needs to stop monetizing the debt, but then if the Fed stops monetizing the debt, who will buy it? No one. So in order for the Fed to stop monetizing the debt, the USG will need to spend less money, this will either mean

a) Shutting down military operations in the Middle East, suspending payments to the MI complex for new technologies and closing US bases around the world

or

b) Stop subsidizing people's medical care,

or

c) or stop paying social security benefits

or

d) terminate 30% of the Federal workforce.

or

e) Invent 1000 amazing world changing technologies that can be immediately mass produced and sold to the world (AHA HA HA HA HA HA HA HA)

Since a through e above are absurdly improbable, monetization is likely to continue, BUT WHAT IF IT STOPPED????

Talk about making the bet of your life.


Fri, 05/13/2011 - 09:39 | 1271392 Bleeping Fed
Bleeping Fed's picture

More like transitionary...As in transitioning to stagflation.

Fri, 05/13/2011 - 09:39 | 1271409 Jeremy Roenick
Jeremy Roenick's picture

+100!

Well done.

Fri, 05/13/2011 - 10:54 | 1271733 TruthInSunshine
TruthInSunshine's picture

SCORECARD OF TRUTH:

Actual Unemployment Rate = 22% (see John Williams SGS *Shadow Government Statistics* alternative unemployment rate reflecting methodology that includes "long-term discouraged workers" that the Bureau of Labor Statistics in 1994 under the Clinton Administration redefined away from those considered "unemployed."
http://www.shadowstats.com)

Real Inflation Rate = 8.8% Annualized (with a head of steam baked into the cake to possibly accelerate this significantly by Q3)

Government Net Transfer Payments = 51% of U.S. Population

1 out of 7 Americans on SNAP (aka Food Stamps)

U.S. Deficit (Annual Revenues - Expenditures) = -1.9 Trillion

U.S. Debt = Officially stated as 15 Trillion as of 2011 (actual is 56 Trillion to 202 Trillion; reference David M. Walker & Laurence Kotlikoff) - U.S. Is Bankrupt

U.S. Government Spending as % Component of U.S. GDP at Present = Approx. 1.6% (so if GDP is stated as 3.2%, U.S. 'Organic' GDP is only rising at 1.6%)

Approximate % of GDP Growth that is Nominal & Attributable to Inflation = 1.1% (so that 'Organic' 1.6% Growth in GDP is closer to 0.5% - not enough to stop further job losses and close to the point whereby we could start contracting again very soon)

 

You're Doing A Heckuva' Job, Bernank! (crushing consumption and organic economic & job growth while ratcheting inflation higher, all in one fell swoop)

Fri, 05/13/2011 - 12:10 | 1271965 JR
JR's picture

Growth in GDP is closer to 0.5% - not enough to stop further job losses and close to the point whereby we could start contracting again very soon.

Thomas Jefferson, Andrew Jackson, Charles Lindbergh Sr. and all the rest…they wouldn’t be surprised at this development for they foresaw what happens when a thriving nation is surrendered to a central bank. Thanks for your hard work, TruthInSunshine.

Fri, 05/13/2011 - 10:01 | 1271493 dmger14
dmger14's picture

Good comment x 2!

Fri, 05/13/2011 - 09:40 | 1271400 jus_lite_reading
jus_lite_reading's picture

Notice how the chart volatility steadily increases over the years. It almost looks like a seismograph leading up to a major earthquake and then BOOM! Notice the return of the volatility in large directional movements. Yup, it's bad folks and we can expect another major shock to the global economy very soon just by looking at this chart. Game over.

Fri, 05/13/2011 - 09:43 | 1271413 TheTmfreak
TheTmfreak's picture

Or hell think of like a heart rate monitor. Goes all crazy like then all of a sudden... Buuuuuuuuuuuuu (flat lined).

Fri, 05/13/2011 - 11:41 | 1271870 serotonindumptruck
serotonindumptruck's picture

And the Bernank is all out of epinephrine, or any other cardiac drugs.

An AED (Automatic External Defibrillator) will work to restart a dying heart once or twice (QE1, QE2), but eventually the efforts to prolong life will fail, and the patient will expire.

Fri, 05/13/2011 - 13:22 | 1272225 Smartie37
Smartie37's picture

Nearing Escape Velocity once again --- but in which direction !?!

 

It's like the old tv show for BB and crew:

"We control the horizontal, We control the vertical"

 

but they CAN'T control the Outer Limits

Fri, 05/13/2011 - 14:03 | 1272353 MacGruber
MacGruber's picture

Totally agree. Plus the other thing you notice is that there has never been a controlled landing in prices. As much as the Fed likes to think of themselves as a moderating force, it always ends up in wildass swings. "Contained" is not the word I would ever use to describe this mockery.

Fri, 05/13/2011 - 09:13 | 1271298 NOTW777
NOTW777's picture

instead of OBL this is the picture they should hide

we all know this anyway from living life

Fri, 05/13/2011 - 11:31 | 1271853 LaLiLuLeLo
Fri, 05/13/2011 - 09:15 | 1271303 FoieGras
FoieGras's picture

Why does the chart start @ 1990? Why not 1980? Would put things into perspective.

Fri, 05/13/2011 - 10:19 | 1271542 citationneeded
citationneeded's picture

I want to know why it says 8.8%. Should be 6.2%, no?

 

http://www.bls.gov/news.release/cpi.t02.htm

 

EDIT: Ahh, this uses non-seasonally adjusted numbers, FYI. So, perhaps more volatile than it should be.

Fri, 05/13/2011 - 13:21 | 1272235 Smartie37
Smartie37's picture

Would be interesting to overlay the SPX / DJIA on top of this..............

Fri, 05/13/2011 - 09:16 | 1271304 Rainman
Rainman's picture

Kinda sorta looks like an oil chart

Fri, 05/13/2011 - 09:33 | 1271369 TheTmfreak
TheTmfreak's picture

They all pretty much look the same. (or exact opposites) All the same effects.

Fri, 05/13/2011 - 10:27 | 1271621 hugolp
hugolp's picture

All the commodities more or less look like that.

Fri, 05/13/2011 - 09:16 | 1271307 GetZeeGold
GetZeeGold's picture

 

Stuart Varney just went total retard and declaired inflation is mild.

 

.......ok.

 

 

Fri, 05/13/2011 - 09:19 | 1271311 razorthin
razorthin's picture

He's another dickass keynesian.  I hate that "conservative" fraud.

Fri, 05/13/2011 - 09:23 | 1271325 Thomas
Thomas's picture

Yup. You cannot go total retard if you are already there.

Fri, 05/13/2011 - 09:40 | 1271415 Translational Lift
Translational Lift's picture

What do you expect??.....He's English!!

Fri, 05/13/2011 - 17:31 | 1273055 Tanz der Lemminge
Tanz der Lemminge's picture

Australian I think?

Fri, 05/13/2011 - 10:26 | 1271604 crosey
crosey's picture

Stu's "metroecon" and can be anything whenever he needs to be.

Fri, 05/13/2011 - 09:16 | 1271309 Vanderdekken
Vanderdekken's picture

Wait, does this include food and gas prices? Because if it does... this chart doesn't reflect the true cost that everyday americans face. </sarcasm>

Fri, 05/13/2011 - 09:38 | 1271380 GetZeeGold
GetZeeGold's picture

 

Wait, does this include food and gas prices?

 

Who needs that stuff?

 

......said the bubble headed mouthpiece on CNBC.....the one with the black Porsche in the parking garage. /sarc still on

 

 

 

Fri, 05/13/2011 - 09:42 | 1271408 Bleeping Fed
Bleeping Fed's picture

Food and gas overrated, just eat Ipads and ride bikes.

Fri, 05/13/2011 - 09:48 | 1271431 TheTmfreak
TheTmfreak's picture

Make sure to sniff your own farts while you're at it.

Fri, 05/13/2011 - 09:56 | 1271462 Al Gorerhythm
Al Gorerhythm's picture

mmmmmm..... Lucky Dog.

Fri, 05/13/2011 - 09:17 | 1271314 Re-Discovery
Re-Discovery's picture

You guys are really bugging me.  Didnt you hear the Minnesota Fed President say the Fed might raise interest rates 50 basis points at some time in the future.  I mean come on.  The Chairman told you directly at a Press Conference that there is no inflation risk.

NO INFLATION!! 

Get it through your thick skulls.  And stop driving so often, you are the reason for higher Oil prices.  Go on diet while you're at it.  You eat too much.

 

Fri, 05/13/2011 - 09:55 | 1271477 Al Gorerhythm
Al Gorerhythm's picture

I need a carbon tax that will help me to stop driving so far each day.

Fri, 05/13/2011 - 10:51 | 1271727 i_fly_me
i_fly_me's picture

And stop not hiring new workers, you are the reason for unemployment.

Fri, 05/13/2011 - 09:18 | 1271316 lordcoke
lordcoke's picture

i still think its gonna be deflation.  because all regional banks will be out of business. cash cash cash.

Fri, 05/13/2011 - 09:31 | 1271359 gofigure
gofigure's picture

Deflation is the Fed's favorite confiscation practice, but it’s all on the edge of out-of-control which will end in hyper.  Question is: is it time for the Fed’s End?  (and of course what the meaning of is is)

Fri, 05/13/2011 - 09:42 | 1271421 NotApplicable
NotApplicable's picture

Deflation in money substitutes, as they race for the casino exits, along with all of the toys they've financed with them. Everything we need though, will see massive price inflation, because the structure of production is irreperably damaged by this financial fraud d.b.a. The Fed.

Fri, 05/13/2011 - 09:56 | 1271475 j0nx
j0nx's picture

Yeah it's called biflation and I think it will be hyper-biflation which is the outcome that I have been predicting for 3 years. Hyper inflation or deflation as an eventual outcome for the USA are both myths. We will get the worst of both just as we have been getting for the past year or so.

Fri, 05/13/2011 - 09:46 | 1271439 Cassandra Syndrome
Cassandra Syndrome's picture

Too late. They printed way too much money. Furthermore the propensity to produce has diminished as the credit crunch has wiped out producers.

Finally the Velocity of money can only go up as this shit tied up in equities and commodity assets seeps into main street. Then people lose faith in their money and engage in more panicked transactions which raises the velocity further creating a higher demand for money. It becomes a self energising vicious circle.

Another concern of mine is the divergence between notional quantites of commodities on paper and electronic trades, and actual physical quantites today and potential physical quantities in future expiration contract dates. If the supply of physical is substantially lower than the papers than price can only go one way.

I think this was a reason given in the spread of price between Brent and WTI Crude Oil. Brent, I think is 65% backed by physical, whereas WTI is only 35%. Apply that rule of thumb across all the commodities.

 

Fri, 05/13/2011 - 11:57 | 1271915 LawsofPhysics
LawsofPhysics's picture

Hmm, interesting thesis, BUT, does anyone know precisely how much paper money (not digital) is really out there?

Fri, 05/13/2011 - 14:09 | 1272371 zerozulu
zerozulu's picture

More you think more it becomes obvious that "GOLD STANDERED" is the way out. Gold is not "investment". it is store of wealth and elite don't like their money sitting idle and not making more money. Funny if you get interest on you "GOLD"

Fri, 05/13/2011 - 09:54 | 1271473 Sophist Economicus
Sophist Economicus's picture

Well, looks like the higher the highs, the lower the lows

 

Anybody else see that nice blip in late 2007?   Looks alot like here-and-now...

 

Oh boy - hang on to your sphincters - could be a bumpy ride down

 

 

Fri, 05/13/2011 - 09:21 | 1271320 A Man without Q...
A Man without Qualities's picture

As painful as it may seem, higher inflation is necessary if the debt pyramid collapse is to be averted.  Unfortunately, we seem likely to end up with high inflation and low/ no growth, so we're screwed anyway...

Fri, 05/13/2011 - 09:28 | 1271339 Re-Discovery
Re-Discovery's picture

Speak for yourself, debt holding/owing slave.  Deflate/collapse away.  I bank with my local credit union.

Fri, 05/13/2011 - 10:18 | 1271579 trav7777
trav7777's picture

you think your stupid FRNs are going to be worth shit if the US is insolvent?

People would be wise to review any of the dozen or so countries experiencing a currency wipeout just in the last 20 years.

I mean, I hear this crap about how stupid Americans are all the time and I have to start agreeing.  Wipeouts are COMMON.  Just because you haven't taken the time to inform yourselves of them or that the blathering talking heads on the boob tube didn't tell you about them doesn't mean they didn't happen.

In EACH and EVERY case, the sine qua non of them was unpayable debt owed by the sovereign.  There never has been any other cause of a wipeout.

It is useful to begin thinking of the bond and the currency as interchangeable.  That is because they ARE such in the modern fiat world.  The ONLY thing in the world you can GUARANTEE you can buy with the legal tender note issued by the CB is the bond issued by the sovereign.  They are joined at the hip.

The Central Bank relies 100% on the SOVEREIGN's ability to back the notes with real value of the levy of taxes, of real production, of State assets such as land, energy, water, armies, etc.  Without the government's "fiat" as to the tender status of the CB's notes, they have NO value.  As the sovereign goes, so goes the CB.  Who is going to enforce the legal tender provision?  The STATE. 

People wonder why CBs hold gold...it's an insurance policy AGAINST the sovereign's inability or unwillingness to enforce legal tender/value of the CB's paper.  If they have to, they can dust off the ingots and say "look, here is our real asset."  That is the only thing the CB has in its possession to persuade a consumer that their paper is worth more than something a schoolchild could doodle in his free time.

Fri, 05/13/2011 - 11:14 | 1271813 sleepingbeauty
sleepingbeauty's picture

So in these other countries where the country went insolvent, who prospered post wipeout. It makes sense that the people who prospered were those that had their wealth in something that was not affected by the currency. And that to most people here is physical gold and silver? Are their other options that one could have in a RRSP (Canadian IRA or 401k)? Do Gold and Silver Sprott ETFs offer any protection?

Fri, 05/13/2011 - 09:35 | 1271374 TheTmfreak
TheTmfreak's picture

Succession sounds a bit better to me.

Fri, 05/13/2011 - 09:42 | 1271427 Terminus C
Terminus C's picture

All hail the new king!

secession is the word you were looking for I think.

Fri, 05/13/2011 - 09:54 | 1271476 TheTmfreak
TheTmfreak's picture

Doh!

Fri, 05/13/2011 - 14:00 | 1272346 zerozulu
zerozulu's picture

This is a word for people who still have some courage left in them. America has become a nation of scared and terrified people who can simply stand still in the headlight and can't do nothing but shit.

Sat, 05/14/2011 - 12:34 | 1274316 cranky-old-geezer
cranky-old-geezer's picture

I doubt sEcession would help.

A state sEceeding from the union would gain authority to print their own currency, even set up their own central bank.  And fiat currency problems start all over again. 

Fri, 05/13/2011 - 10:14 | 1271545 j0nx
j0nx's picture

With the current global wage arbitrage there will be no hyper-inflation. This is the part that everyone misses. Things can and might get very expensive but there can be NO transfer to wages because of this, therefor we don't hyper-inflate. Home values will also never inflate due to massive amounts of fraud and over-inventory on the market. Hyper-biflation is our future. You will see the price of things you need skyrocket and the things you own will flatline or decrease in value. The things you want but don't need can and might also drop in value but won't necessarily - while wages remain flat to dropping. The only way America can hyper-inflate their way out of this is if the rest of the world does the same or we isolate ourselves and bring all of our jobs and manufacturing capability back home. Just the act of doing that though would put us into a new Renaissance and prevent the need to do that in the first place.

Fri, 05/13/2011 - 10:57 | 1271765 trav7777
trav7777's picture

hmm..that's precisely what goes on in inflation zones where currencies shit to 0.

Take a look at south america...the Colombian peso is 1800 to the USD.  Everything there is denominated in the millions.  In real terms, locally produced stuff like food is still wage-priced, but cars, imports, TVs, etc., are astronomical.  The same is true in Brazil, despite the real's relatively stronger position.  Capirinhas can be had for 2 or 3 reais but a honda costs 60,000.  Wages of R$30,000 per year are considered pretty good.

Fri, 05/13/2011 - 11:11 | 1271807 tmosley
tmosley's picture

Look at real estate prices in Weimar Germany.  They were steady or down for most of their hyperinflation.  What you call hyperbiflation is really what everyone else calls hyperinflation.

Sat, 05/14/2011 - 12:37 | 1274322 cranky-old-geezer
cranky-old-geezer's picture

Hyper-biflation is our future.

There is no such thing as "biflation".  The money supply cannot grow and shrink at the same time.

 

Fri, 05/13/2011 - 09:23 | 1271323 oklaboy
oklaboy's picture

roller coasters should have so many humps

Fri, 05/13/2011 - 09:20 | 1271324 dcb
dcb's picture

It doesn't matter what you post, or say, or what the data show, the fed and it;s cronies will just say what they want. this isn't real inflation tyler

Fri, 05/13/2011 - 09:59 | 1271485 Al Gorerhythm
Al Gorerhythm's picture

Short the Fed. Buy PMs.

Fri, 05/13/2011 - 09:23 | 1271326 medicalstudent
medicalstudent's picture

they actually reported 8.8%?

 

but they use annualized cpi for entitlement adjestments im sure.

 

so we will have madhouse deflation (to bring down annualized) or the end of the dollar very soon, since no way any politician can adjust spending (upward) to accomodate these reported figures.

 

endgame shitstorm.

Fri, 05/13/2011 - 09:51 | 1271454 boiltherich
boiltherich's picture

The story at Bloomberg reports "The consumer-price index increased 0.4 percent..." but also says (brace yourselves) "Improving job prospects are helping sustain consumer spending even as grocery and energy bills climb, which may make it easier for companies like Colgate-Palmolive Co. to pass rising costs on to customers."  So how do you like your new high paying job?

"Energy costs increased 2.2 percent from a month earlier, and have climbed at a 39 percent annual rate so far this year, today’s report showed."  My accent there.

And the reason for all this inflation?  Could it be the Fed and federal deficits?  Nope... "Gains in food and energy prices have reflected unrest in the Middle East and increased demand from faster-growing economies such as Brazil, China and India."  And here is a first of a kind admission I don't think I have ever seen before in the MSM... "

The price increases caused wages to drop after adjusting for inflation. Real hourly pay fell 0.3 percent on average in April, the fifth decrease in the past six months, a separate report from the Labor Department showed. They were down 1.2 percent over the past 12 months, the biggest 12-month drop since September 2008."  Keep in mind this is as likely to be as understated as inflation itself. 

As a disabled vet dependent upon federal COLA's to keep up with inflation, and not having a rise since the announcement in 2008 of an increase because "there is no inflation," I assure you I am acutely aware of every penny of increase that is not making it into these calculations and there are a LOT of those.  A lot of it is wrung out with geometric chain weighting which automatically reduces the weights of anything in the calculations that is rising and increases the weights of that which is going down in price.  And there is hedonics too, Shell puts nitrogen in the gasoline and that is an improvement in the product so they reduce the price increase to match increased quality.  I could just puke, and you would think that the politicians would be demanding this be controlled because they will be the first to feel the heat in elections, but they smugly pretend the problems do not exist.  People do nothing not because they are not desperate but because the DEM solution is to pour gasoline on the fire and the GOP solution is to cut taxes for the rich and reinstate Don't Ask Don't Tell. 

End times Bitchezzz, who will be left to pick up the pieces?

 

Fri, 05/13/2011 - 11:39 | 1271875 medicalstudent
medicalstudent's picture

collective bankthink: we have sowed the seeds for ecomonic destruction --> we will be blamed for this --> policies and endpoints must obfuscate our moneyprinting and rationalize it simultaneously

 

in a peaceful world, there is no obfuscation.

 

the people picking up the pieces will not be payed in debt, and will likely be geigered.

Sat, 05/14/2011 - 12:56 | 1274349 cranky-old-geezer
cranky-old-geezer's picture

The price increases caused wages to drop after adjusting for inflation.

The middle class is sinking into poverty.  Wages can't keep up with prices rising 25% per year.  Pension checks can't keep up with prices rising 25% per year.  Social security checks can't keep up with prices rising 25% per year. 

People on fixed income are sinking into poverty faster than wage earners.

The Fed is directly responsible for this. 

Fri, 05/13/2011 - 09:24 | 1271329 Greenhead
Greenhead's picture

The credit card shut off limit at my local gas station was $80 a few months ago, now it is $110.

Fri, 05/13/2011 - 09:27 | 1271343 101 years and c...
101 years and counting's picture

its depressing when you need to pull out a 2nd credit card to fill your tank.....every 7 days.

 

 

Fri, 05/13/2011 - 09:51 | 1271448 FrankIvy
FrankIvy's picture

If you have a car that gets 40 MPG, then it usually will have a 10 gallon tank.  That means 40 bucks to fill.

Question is, how many people really need a larger vehicle?

Answer is - amazingly few off them.

Fri, 05/13/2011 - 10:02 | 1271492 TheTmfreak
TheTmfreak's picture

Leaps and bounds people don't. I tend not to criticize people that own trucks, for quite a few reasons. (even those who live in the burbs). But SUVs or anything of the sort? Yeah no. I'm not higher and mightier but I'd rather "suck it up" and get a smaller car. I guess it is just to say how "nice we've had it" in the past. People seem to think you can't put kids in a small car, you gotta have the large van or the SUV. Gotta have the tv screens in there too.

 

To each their own I guess. I just fail to the see the purpose. In fact my roommate has a G8 muscle that he has all "hooked up." While he is "down with the crash of the financial system" he still has that car, which he pays like 80 bucks to fill up like twice a week. He is a fucking retarded lemming. "Yeah I need to save money and build up my supplies." Right. This is coming from a guy who knows there will be a further housing collapse and is intending on spending thousands of dollars for people to build a deck onto his townhouse in a shit part of town. Dumbass.

Fri, 05/13/2011 - 10:54 | 1271748 zeek
zeek's picture

I love my 3/4 ton, 4x4 Suburban...!

Nothing beats it when carting a family of five (4 of them girls) into the backcountry for camping, and we go out between 6 and 12 times a year.  Towing isn't a problem with its big block 6L engine.  You'd have to pry it away from my cold, dead hands!!

Of course, I bike to work... :)

 

Fri, 05/13/2011 - 10:57 | 1271752 boiltherich
boiltherich's picture

I did that, I had a Ford F150 4X4 four door truck in 2007 that I really loved, especially when going over to the coast to camp out on the river.  In 2008 when gas hit $4.35 and a fill up was $115 I kissed it goodbye and bought a new Solstice that was a fun little car getting almost 30 mpg and man was it fast, but it was utterly impractical, I had to make two trips to the market for food because it would only hold cargo equal to about a woman's purse.  No more camping either.  OH, and I got so screwed on the trade in that I will be paying a tangible amount each month for the next six or seven years.  And viola, within 6 months gas was back to $2.30 a gallon.  Lucy with a football. 

Now I have a 2009 BMW 328i convertible hardtop I bought new and I am driving that cocksucker till the wheels fall off.  Because in part I had almost 20,000 negative equity in my Solstice and the used Colorado truck I bought a few months later for camping that is now all a balloon payment after the loan on the beemer is paid.  Ask me if I care anymore how high gas goes, or what the car costs, they are going to screw us no matter what choice you think you have made, and by the time you get into your mid fifties you realize you do not have that many good years left to actually enjoy life.  So yeppers I might spend my flaccid old declining years in bankruptcy and poverty, but I am going to have a hell of a fine ride till then no matter what Bernanke and others do.  If gas goes up I simply cut from other components of the budget, if rents go up I just move.  Same with smokes, I wish I could quit for other than price reasons, but realistically I know I won't and so they can just cost what they cost, I ain't gonna sweat it. 

Fri, 05/13/2011 - 10:19 | 1271572 Abitdodgie
Abitdodgie's picture

My car gets 45 mpg and it now costs $30 dollars to fill up its getting out of control, I know we could right to our congress rep , yes that will work ,and get results I mean its not like America will do anything else right . For some reason nut less monkeys spring to mind   

Fri, 05/13/2011 - 13:47 | 1272299 zerozulu
zerozulu's picture

People are paying for the false sense of security. 110 lbs women driving 3tone suv to grocery store is insane.

Fri, 05/13/2011 - 10:06 | 1271522 boiltherich
boiltherich's picture

A neighbor of mine has an F350 with dual diesel tanks 26 gallons each, at $4.40 a gallon, $228 to fill up and he has to fill twice a week due to work.  Self employed contractor working on off grid projects for rich people in the hills, mostly remote places up dirt tracks into the woods, he also picks up two guys that he employs because he can't pay them enough that they can afford to drive themselves.  Almost 12 thousand a year in fuel, how are people staying in business?

Fri, 05/13/2011 - 10:08 | 1271531 TheTmfreak
TheTmfreak's picture

Passing it to the consumers.

Fri, 05/13/2011 - 13:28 | 1272256 alexanderstollznow
alexanderstollznow's picture

i think the problem here is that he is pulling your leg.  that is 104 gallons a week, right?  ie about 1500 miles driving per week?  i dont think so.

Fri, 05/13/2011 - 15:25 | 1272596 boiltherich
boiltherich's picture

No, that is about 100 gallons a week at very close to 9 miles to the gallon, 900 miles a week, Oregon is a big place.  And rugged, driving dirt roads in the mountains is really expensive on mileage.  Towing tool trailers and other gear like cement mixers in four wheel drive is also hard on MPG, to him that is just what it costs to do business.  I have another friend with a tree surgeon business with several large trucks, two are the huge cherrypicker type for getting way up into trees, has about 20 employees, his fuel bills are just breathtaking.  What was a considerable part of overhead has now become a total ball buster.  I used to see him out at my favorite pizza place for a beer but he has all but quit going out, trying to live on nothing so he does not have to lay more guys off.  We can get through a sharp rise in energy if it really were temporary, but we already are getting to the point where it will have horrific consequences for employment real soon.  Pent up demand works two ways, pent up demand to shed expenses can be harder to overcome than for expansion. 

Fri, 05/13/2011 - 17:16 | 1273031 11b40
11b40's picture

Last week for me was 1800 miles..

Charlotte>Memphis; Memphis>Nashville; Nashville>Charlotte; Charlotte>So. GA.; So. GA>Charlotte

5 tanks of gas in a Caddy. Avg around $70/tank.  Most expensive was $76, so around $350 for the week.  I now spend more per day on gas than on hotels.

A couple of Saturdays ago, I filled my Pick-em-up Truck and the Caddy both....$150.

I am a manufacturer's rep (independent broker) to major retail chains & have spent the day trying to round up Christmas orders for one of my vendors who has a 5/15 deadline to book production.  2 majors have told me the reason I don't already have their orders is that management is busy revising budgets and they are waiting for final numbers to see what they can spend.

Somehow, I don't believe their budgets are increasing.  Whaddya' think?

Fri, 05/13/2011 - 09:36 | 1271381 TheTmfreak
TheTmfreak's picture

Stop driving a gas guzzling large tank vehicle that is likely durable and works well. Instead drive a government motors vehicle that runs 100% on coal powered electricity.

Fri, 05/13/2011 - 10:02 | 1271511 TheTmfreak
TheTmfreak's picture

I just remember reading when it came out how the claim that it ran on "no gas", was false and nearly every applicable use the gas engine runs turning it into a hybrid that gets less gas milage than any other hybrid or about on par with decent MPG cars that are a fraction of its price!

*Slaps forehead* geezz... And "we" bailed out these clowns.

Fri, 05/13/2011 - 10:48 | 1271702 OldTrooper
OldTrooper's picture

Planned Economies - Ideas so good we'll make you do it!

Fri, 05/13/2011 - 09:22 | 1271330 PaperBear
PaperBear's picture

Bernanke will keep saying 'transitory' and once he hands off the chairsatanship to the next schmuck it won't be his problem.

In short: Transitory = next guy's problem.

Fri, 05/13/2011 - 09:23 | 1271335 monopoly
monopoly's picture

This is the quiet seasons for gold, silver, usually moves lower here, but am keeping my core positions, keep adding to physical on each dump, lots of cash and have 0 interest in buying this market. Still not shorting. None of this is a surprise to any here. This is a long process, going to take time to play out, but we are on script.

What a day for headlines. Yikes.

Fri, 05/13/2011 - 09:53 | 1271451 blindfaith
blindfaith's picture

Everything is rigged to slaughter the shorts.  You can't win when the dealer and players have you spotted as a sucker.

Fri, 05/13/2011 - 09:23 | 1271338 augie
augie's picture

I get my investment adivce from one source, and one source alone.

http://www.youtube.com/watch?v=vWz9VN40nCA

 

 

Fri, 05/13/2011 - 09:43 | 1271416 augie
augie's picture

classic. Its amazing to compare real hip-hop to the b.s. shit put out today.

Fri, 05/13/2011 - 09:33 | 1271377 captcorona
captcorona's picture

Plus 10

Fri, 05/13/2011 - 09:27 | 1271341 cat2
cat2's picture

Can you say SYSTEM DESTABLIZING

Fri, 05/13/2011 - 09:34 | 1271372 Franken_Stein
Franken_Stein's picture

 

The chart reminds me of an oscillator whose resonance frequency has been tuned in.

 

A non-dampened oscillation, like when 10000 soldiers march over a bridge.

Then the resonance catastrophe happens.

 

The swings get ever wider, that standard deviation ever bigger.

 

I guess in market speak this is "increased volatility".

Fri, 05/13/2011 - 13:33 | 1272264 Smartie37
Smartie37's picture

+10000

 

Just like the Tacoma Narrows bridge in Washington state !

Fri, 05/13/2011 - 09:28 | 1271342 TruthInSunshine
TruthInSunshine's picture

Paul Krugman, Nobel Laureate Economist and all around really smart guy (according to some other really smart people) said that inflation is just a boogeyman under the bed, and that The Bernank & Geithner better "get busy living" with the fiatski printer.

 

BoogeyMan.

Boo!

Paul Krugman, you are the bestest and most brightest economist evah, and John Maynard Keynes is smiling upon you and wishes to drown you in his beloved Bancors.

Really, really high prices are great for the GDP, also, because you can scrimp and buy 1/3 less, and you're still contributing to robust nominal economic growth as it takes significantly more to buy that 1/3 less - so The Bernank has declared you all fuckin' patriots.

Fri, 05/13/2011 - 09:29 | 1271346 Boston
Boston's picture

And now that QE2 ends (granted, temporarily) in about 45 days, what do you suppose will happen to this series over the next 3-6 months?

I see breakevens collapsing, and the 10 year Treasury sub 2.75%......oh and the S&P500 "dipping" by 20%.

 

Fri, 05/13/2011 - 09:27 | 1271354 Zing
Zing's picture

Remind me of the dynamic by which PMs stay afloat during such a scenario? Serious Question.

Fri, 05/13/2011 - 09:37 | 1271384 legal eagle
legal eagle's picture

I think you have to prepare yourself for a spanking, but it will be short lived and you will have to have the fortitude to hang on, cause once the market takes a serious dip down the run to safety means PMs. Serious gains July 15th through end of year.

Fri, 05/13/2011 - 09:38 | 1271389 captcorona
captcorona's picture

PMs' drop in dollar terms but by much less than the over all market by %

Fri, 05/13/2011 - 09:38 | 1271396 Boston
Boston's picture

They don't.  Think of PM's in 2008.  After peaking in the spring, they plunged---temporarily---in the fall.  Buying them then was a huge opportunity.

If 2011 rhymes with 2008, and then you must have the courage to buy them--if/when they plunge during Risk-Off after QE2 ends. 

Most folks won't have the guts to do it.  They'll stand back and watch.....just as they did in late 2008. 

 

Fri, 05/13/2011 - 11:24 | 1271826 razorthin
razorthin's picture

..after QE ends.

BA HAH HAH HAH!!!

No, what we've got right now is a replay of last summer.

Fri, 05/13/2011 - 09:41 | 1271401 Long-John-Silver
Long-John-Silver's picture

We are in Great Depression II. Look at what happened to the Dollar and Gold after the second economic dip in the first Great Depression. People lost faith in the Dollar and started buying Gold in a huge way (sound familiar?). This caused FDR to attempt to confiscate Gold so it would not replace the Dollar.

Fri, 05/13/2011 - 09:47 | 1271430 TheTmfreak
TheTmfreak's picture

All signs have pointed to this for awhile, it is just much more covered up from view. Look at the number of jobs lost and the amount of wealth lost (substantially more than the great depression).

 

I still laugh myself into oblivion when I heard our great leaders talk about "since the recession has been over." Wow ok. I guess that word just changes meaning to fit however we like. I guess we aren't in a "recession" or "depression" because you say it isn't so. Great.

Fri, 05/13/2011 - 09:49 | 1271450 Note to self
Note to self's picture

It all ends with a huge BANG (or POOF or something like that.)  Everyone wakes up as if with a bad hangover.  Dollars are meaningless.  Food, booze, drugs, and bullets are the main currency.  With a little luck, you can trade some of your PMs some of the real currency.

Fri, 05/13/2011 - 19:10 | 1273181 Mad Cow
Mad Cow's picture

Yes, and after the dust settles, if the dust settles, you can buy with PM's the new world currency (backed by scary shit) since those desk jobs will all be history. Or you will need to report to the local chip/ID center (Wal-Mart) with your PM's to purchase credits for some Chinese plastic bread. The loading bays at Wal-Mart(k) can be used for loading and unloading.

Fri, 05/13/2011 - 11:37 | 1271868 Common_Cents22
Common_Cents22's picture

We could see a major downdraft at any time ahead of the end of QE.  Seriously, why would anyone wait until the last pre-announced day to avoid trouble?  I think we'll get a big pump by the MSM on good news from here on out while the big smart money gets out or gets short.  then boom.

Fri, 05/13/2011 - 09:28 | 1271358 Rick Masters
Rick Masters's picture

Me too. There's inflation now in goods and its a hurt piece but in the end the Bernanke's boogey monster will rule the day. I'm not on the side of people who believe Benrnanke is evil. He ain't even Stoopeed. Arrogagnt and sure of himself to our demise and the world's. Mos' certainly, sir

Fri, 05/13/2011 - 09:29 | 1271366 Rick Masters
Rick Masters's picture

But obvioulsy i could be wrong. I'm hoping everything just goes back to normal and we have a mild decad of sideways trading.

Fri, 05/13/2011 - 09:29 | 1271367 Whatta
Whatta's picture

looks like a graph of Gorebal Warming to me...and at that is still within "normal" ranges at present. Inflation, but nothing hyper.

Fri, 05/13/2011 - 09:42 | 1271412 SheepDog-One
SheepDog-One's picture

'Normal range' as long as the top of a 20 year graph is OK.

Fri, 05/13/2011 - 09:40 | 1271414 Long-John-Silver
Long-John-Silver's picture

Gorebal Warming graphs can be anything you want them to be.

Fri, 05/13/2011 - 09:33 | 1271379 ArrestBobRubin
ArrestBobRubin's picture

Zair iss nein inflatzion!

Verstehen Sie?

Fri, 05/13/2011 - 09:57 | 1271488 Terminus C
Terminus C's picture

Ich verstehe.

Fri, 05/13/2011 - 10:25 | 1271610 KlausK
KlausK's picture

Ich auch.

Fri, 05/13/2011 - 09:53 | 1271387 Spigot
Spigot's picture

I finally figured out how TPTB can with a straight face say that there is no "inflation". Its due to the concept of "price substitution" where if you can not afford a steak you will buy oat meal and the cost of your "food" catagory does not go up. Also, due to "hedonic adjustments" when you go out and shoot a squirrel for dinner they count that as a drop in your cost for food since it only cost you 10¢ for the LR22 round, vs buying industrially raised animal proteins.

I can only smile at their sociopathy.

Fri, 05/13/2011 - 11:43 | 1271881 Common_Cents22
Common_Cents22's picture

Look at all the substitution on grocery store shelves.   The price stays the same but the product quantity is decreased w/ deceptive packaging.   30oz is now 25oz etc..  Look at the bottom of plastic and glass containers and you'll see that packaging bubble getting bigger and bigger, displacing product while making the package look the same size.  

This would be a good idea for a website, tracking changes of product sizes.  Consumers could upload the pix.

Fri, 05/13/2011 - 09:41 | 1271403 Miss Expectations
Miss Expectations's picture

Watto Bitchez!

Fri, 05/13/2011 - 09:42 | 1271405 SheepDog-One
SheepDog-One's picture

They can only paper over the collapse for so long, and 2 1/2 years is about long enough. Dont forget the wars brewing, China just yesterday said 'US if you mess with Syria, consider it the same as messing with Beijing'.

Fri, 05/13/2011 - 10:31 | 1271616 Widowmaker
Widowmaker's picture

Consider anything like that from China the same as a popcorn fart in a frying pan.

Fear of that junk state is not rational.  The US don't buy and they fry.

I'll diddle Ms. Beijing all I want thank you - Syria too.

Fri, 05/13/2011 - 10:28 | 1271628 Abitdodgie
Abitdodgie's picture

Attacking Syria will be like attacking Iran ,however i think Syria is smoke and mirrors to stop us looking at troops going into Libya and the whole Libya situation .I do not know why they bother its not like the American public will do anything 

Fri, 05/13/2011 - 09:39 | 1271410 dbTX
dbTX's picture

Uncle Ben doesn't do his own shopping and probably doesn't buy his own gas; therefore he is unfamiliar with the term INFLATION. The inside the beltway group of elites are so disconnected from the rest of America they have no idea what's going on. Let's make some changes in 2012.

Fri, 05/13/2011 - 09:48 | 1271434 Long-John-Silver
Long-John-Silver's picture

Democrats and Republicans = SOS (Same Old Shit).

It makes no difference who you vote for. The outcome is always the same.

They plan on riding the debt bomb right down to the explosive collapse.

Then we get the New World Order, as planed.

http://youtu.be/wcW_Ygs6hm0

 

Fri, 05/13/2011 - 10:17 | 1271578 boiltherich
boiltherich's picture

Meet the new boss...same as the old boss...  I am 53 and this is not the first time I can remember this very thing going on, did Bernanke signing the checks actually change anything over when it was Loanspan?  Seriously, they will push this till people threaten seriously to revolt, as when the SLA demanded food be distributed to the poor in Oakland in the 70's.  Love her or hate her you gotta miss Patty Hearst. 

Fri, 05/13/2011 - 10:24 | 1271595 TruthInSunshine
TruthInSunshine's picture

Uncle Ben doesn't do his own shopping and probably doesn't buy his own gas

The Bernank lives like a rock star (it's amazing what an Ivy League degree and the right connections will get you, no matter how incompetent):

http://www.itnsource.com/shotlist/RTV/2009/03/20/RTV490209/

Fri, 05/13/2011 - 09:48 | 1271420 Franken_Stein
Franken_Stein's picture

 

Interestingly the widening up of the funnel-shaped amplitude hull curve started in:

 

1999

 

When Glass-Steagall was abolished through the Gramm-Leach-Bliley Act under Clinton !

When family values advocate Newt Gingrich hunted Bill Clinton in Lewinskygate while himself screwing his secretary on the desk.

 

Tadaa !

Trickle down. Wealth effect.

 

Fri, 05/13/2011 - 09:47 | 1271443 firstdivision
firstdivision's picture

Amplitude was increasing since 1990.  I would wager a guess that this is mimicing the 70's to an extent. 

 

OT: Finland was nothing but smoke and mirrors to keept he music playing.  I hope to see protests later today.

Fri, 05/13/2011 - 09:42 | 1271426 writingsonthewall
writingsonthewall's picture

Did anyone else know about this Cramer incident?

http://www.youtube.com/watch?v=FP3YyJz3HsU

 

I knew he was an idiot - but it's good when you see the indisputible evidence....

 

BUY BEAR STEARNS - BUY BEAR STEARNS

 

Where can I get these Bear stearns shares? - does anyone know the Ticker? I can't find them anywhere...

Fri, 05/13/2011 - 09:45 | 1271433 SheepDog-One
SheepDog-One's picture

Oh sure, that was infamous at the time. Cramer, and everyone else, yelling ALL IS WELL and it was a great time to buy BSC at $55, next day it dropped to sub $1. Same thing of course went on with Enron and .com bubble as well, calling strong buys into a collapse. What these people say means absolutely nothing.

Fri, 05/13/2011 - 09:48 | 1271445 writingsonthewall
writingsonthewall's picture

My failure to watch cramer has caused me to miss this classic bit of TV.

Now why is the man still on TV? - do these people have no shame?

 

Anyone can pick winners in a boom - it's a numbers game as most stocks are on the up. I hate to quote Warren Buffet but he did say that when the tide goes out you can see who is not wearing their swimwear.

The tide has definitely gone out - and there are a lot of naked bums on show!

Fri, 05/13/2011 - 10:52 | 1271718 GoatETF
GoatETF's picture

do these people have no shame?

 

Is that a question?

Fri, 05/13/2011 - 09:45 | 1271429 SheepDog-One
SheepDog-One's picture

Dont worry it wont be an economic downturn, what do you think that fake 'Bin Laden death' story was all about? High alert warnings from govt about 'retaliation' on major US cities soon, thats what we'll see another 9-11 day where everyone stares at the destruction while the markets just close up for a week, and open -5,000 or so on the DOW at least as the country is on lockdown.

Fri, 05/13/2011 - 09:51 | 1271456 Franken_Stein
Franken_Stein's picture

 

Don't wish too hard on it, it might come true if they run out of excuses or CB money.

 

Fri, 05/13/2011 - 09:46 | 1271436 chunkylover42
chunkylover42's picture

Treasuries don't seem to care (not yet, anyway), the 10-year has rallied from 3.70 in February to 3.20 today.

Fri, 05/13/2011 - 09:48 | 1271447 SheepDog-One
SheepDog-One's picture

'Rallied' with the generous free money helping hand of the Bernank. Same with the stock rally....gee look at em GO with all that 100% printed up free money!

Fri, 05/13/2011 - 10:52 | 1271735 chunkylover42
chunkylover42's picture

we've had 6 months of the Fed buying Treasuries and rates have gone up pretty much that entire time until recently.

Fri, 05/13/2011 - 09:56 | 1271467 Butchery101
Butchery101's picture

What the F... ?!?

Seems volatility has been growing HUGELY since 2000.

Then I wonder : which of these quarterly peaks do correspond to holiday shopping seasons ?

Or, put in differently, which are the points in times where the 'iPad effect' can be seen graphically, hence falsely breaking an otherwise continuously upwards reaching trend ?

BLEAAAAAAAAAAT

 

Fri, 05/13/2011 - 09:54 | 1271469 Fancy Bear
Fancy Bear's picture

Why does no one seem to care that the MIT BPP hasn't been updated since April 24?

 

http://bpp.mit.edu/usa/daily-price-indexes/?country=USA

Fri, 05/13/2011 - 10:07 | 1271518 GetZeeGold
GetZeeGold's picture

 

Dude....I was trying to forget it.....thanks a lot.

 

 

Fri, 05/13/2011 - 10:22 | 1271588 Hephasteus
Hephasteus's picture

Because too much shit is being hidden by fukishima and nobody gives a damn about economics. Nobody worries about paying or getting paid when you got a planet killer.

The elite are probably about a month from going underground anyway.

http://www.youtube.com/watch?v=2aou6c2MOmg&feature=related

They'll all sit down there and jack off to maralyn monroe pics and just be the slimy mole people they are.

Fri, 05/13/2011 - 10:02 | 1271509 Ag1761
Ag1761's picture

Fuel in UK at the pump just now is around GBP 1.39 a litre. That's $10.30 a gallon, been like that for a year now, no chance of it coming down IMO, even if they work the Oil price down until US elections are over.

Inflation heading for 5.00% later this year.

 

F**K them all, I stack therefore I am.

Fri, 05/13/2011 - 10:09 | 1271535 GetZeeGold
GetZeeGold's picture

 

F**K them all, I stack therefore I am.

 

OMG....it's an official terrorist.....who should I call?

 

Just wait till Jan Nap gets done with you lil mister....it will be the mother of all baby poop pat downs.

 

 

Fri, 05/13/2011 - 10:31 | 1271630 The Answer Is 42
The Answer Is 42's picture

It's not who, but whom, that is the question. And that's what I call grammar te'o'ism. Whom should I call for such things?

Fri, 05/13/2011 - 10:27 | 1271622 boiltherich
boiltherich's picture

One of the really annoying things about fuel price spikes is that every time gas goes up someone chimes in with how much worse it is in England (nothing personal AG).  That is apples and oranges, your gas is really about the same price as ours, with an extra 6 bucks worth of taxes, because that is how your people and government prefer to collect taxes.  Strip out taxes in both the USA and GB and see what the real fuel prices are, I have not done that because I do not really care what gas costs on other continents, yet anyway, but I am betting that the underlying cost of fuel is pretty similar.

Fri, 05/13/2011 - 10:12 | 1271533 citta vritti
citta vritti's picture

These aren’t the droids you’re looking for

Fri, 05/13/2011 - 10:11 | 1271543 GetZeeGold
GetZeeGold's picture

 

 

Come to think of it.....I think you're right!

 

 

Fri, 05/13/2011 - 10:19 | 1271571 svc101
svc101's picture

Resembles a voicegram of someone breaking wind? Perhaps the Bernank?

Fri, 05/13/2011 - 10:20 | 1271575 proLiberty
proLiberty's picture

Mohamed El-Erian, co-CEO of PIMCO, was on CNBC this morning talking about money printing and rising commodity prices.  He ended talking about "good inflation" and "bad inflation".  In my book, manipulating the quantity and time value of money IS a form of theft by dilution, and is done with the deliberate intent to secure wealth from holders of currency to the benefit of long term borrowers of currency.  To 'follow the money' we are quickly lead to government being the primary beneficiary of money printing.  (as if this should be hard even for Homer Simpson to figure out).

 

When I go to the store and have to shell out more FRNs for something, is that "good" or "bad" inflation?  It is just plain inflation, unless you want to get technical and use Ludwig von Mises' definition, which is that "inflation" is the very act of printing the money.  When the money from printing is used to pay bills, that bids up the nominal price of wages and goods. 

 

People like Mohamed El-Erian are so conflicted about  Keynesian economics.  The are eager to meddle in the economy by tuning taxes, policy and money, yet deep down they know that this has consequences that they cannot be responsible for.   I look at it from a broader moral framework:  when government manipulates money, it is changing the value of private wealth stored in that money without the consent of the holder.  To the extent it is done so government has money to spend, it is just as much theft as if the tax collector levied more tax than was legally due.   To the extent that it induces people who live off their interest investments to shift their investments to those with higher risk, it is fraud in the inducement.   Yet, people like Mohamed El-Erian cheer on the money printing, and happily figure out ways to make a profit from the resulting financial and monetary chaos.

 

 

Fri, 05/13/2011 - 11:12 | 1271808 Libertarian777
Libertarian777's picture

you're 100% on the money.

People only equate inflation with the final end product, price inflation.

It's like saying an ER doctor waiting for you to fall over and die and then saying "yes, he needed medical attention".

Instead ER doctors look for the root cause of the symptom. Of course in The Bernak's case, in 15minutes he can raise interest rates, and the dead (economy) will rise again.

Price increases are the symptom of monetary inflation, not 'inflation' itself. the iPad 2 example is not 'deflation' as Dudley would believe, that is due to competition and economies of scale.

Fri, 05/13/2011 - 10:30 | 1271635 Ying-Yang
Ying-Yang's picture

Taylor said " if the Germans give Greece their money to pay back their debt then they’ll be fine."

Damn... In the end, the only way out of all this global debt may prove to be a Biblical debt Jubilee.

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