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US Inflation On Track To Hit 8.3% In 2011

Tyler Durden's picture





 

Chasing all the fluttering glow in the dark swans over the past month has put some of the key issues facing the US economy on the backburner. But just like today's surging inflation update in the UK confirmed, there is only so long that any given crisis can be used a distraction from the real problems at hand. And here is where we stand: per a quick check with the recently released and constantly updated MIT billion price project, which just happens to correlate 93% with the CPI, 2011 inflation in the US is trending at an 8.3% annual rate of increase. This is only comparable to China, which just happens to have a growth rate (presumably that is double that of the US), and is almost three times higher than the latest inflation data released by... Zimbabwe. Below is the most recent inverse disinflationary data confirmation from MIT (and plotted by John Lohman). By now we hope readers are honing their iPad eating skills.

 


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Tue, 03/22/2011 - 13:54 | Link to Comment TWORIVER
TWORIVER's picture

Can't they just print more money? sarc/off

Tue, 03/22/2011 - 14:00 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Two ways to defend against inflation:

-- gold and other PMs

-- ¨paper food¨ ETFs like DBA and JJG

Tue, 03/22/2011 - 14:13 | Link to Comment JuicyTheAnimal
JuicyTheAnimal's picture

I was pondering some call options on CF for maybe Aug strike.  Is there any reason that would not be a good inflation bet? 

Tue, 03/22/2011 - 14:23 | Link to Comment I think I need ...
I think I need to buy a gun's picture

well in the world of real food its up again this week........all those extra dollars need to start going into gold but when?

Tue, 03/22/2011 - 16:45 | Link to Comment yabyum
yabyum's picture

Do you think I will see 8.3% on my US inflation Bonds? I  didn't think so either!

Tue, 03/22/2011 - 14:02 | Link to Comment camaro68ss
camaro68ss's picture

YEAH the Obama, YEAH the bernake, Hope and Change for all, in Debt we trust

Tue, 03/22/2011 - 14:47 | Link to Comment oh_bama
oh_bama's picture

NO THIS CANNOT BE TRUE!!! MIT'S STUFF IS NOT OFFICIAL!

  • HOUSE PRICES DROPPED!!!
  • RENT DROPPED!!
  • CAR PRICES DROPPED
  • HUGE SCREEN TV PRICES DROPPED
  • COMPUTER PRICE DROPPED
  • IPAD2 PRICES DROPPED 20% (ACCORDING TO GOV'T MODELS)

QE3 PLEASE!! BEN, DO IT, DEFLATIONARY PRESSURE IS HURT AMERICANS!!!

  • QE3 PLEASE--THE ECONOMY REALLY NEED IT!!!
  • QE3 PLEASE---BANKERS NEED IT
  • QE3 PLEASE---COSHERS NEED IT!!

JUST DO IT!!

Tue, 03/22/2011 - 15:33 | Link to Comment Sabibaby
Sabibaby's picture

Rent hasn't dropped in the Denver area, it's going up. So is gas and food. I need food and energy, so those are the prices that matter to me.

Tue, 03/22/2011 - 13:55 | Link to Comment Misean
Misean's picture

OOOOO...It's so 70's kitch!

Too bad wages and fixed income payments aren't tied to it, though.

Tue, 03/22/2011 - 19:53 | Link to Comment Bay of Pigs
Bay of Pigs's picture

But Mish says this isn't so. There is no inflation. He threatens to ban people who question his theory on deflation.

Tue, 03/22/2011 - 13:54 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I trust Ben S. Bernanke, the finest economist and Federal Reserve ChairCreature of all time!

How dare you impugn Dr. Bernankincide's credibility, you bastard, John Lohman!

Tue, 03/22/2011 - 14:04 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Agreed! How dare they contradict the Department of Truthiness?

 

Tue, 03/22/2011 - 16:27 | Link to Comment emsolý
emsolý's picture

it's a direct attack by the MIT economists on the sound economics of Princeton economists like the Bernank, the Paul everywhere like such as

btw, i personally belieeeve that the Bernank and the Obama need to be viewed in the same context as the Miss Teen South Carolina 2007 (http://www.youtube.com/watch?v=lj3iNxZ8Dww) from now on.

 

Tue, 03/22/2011 - 13:56 | Link to Comment jkruffin
jkruffin's picture

Here comes the scam push again..they want everyone to use the plastic again at will..

The Dangers of Avoiding Credit by Kimberly Palmer
Monday, March 21, 2011

provided by

My 25-year-old coworker thought she had done everything right when it came to protecting her credit. She paid off her student loans early. When she does use a credit card, she pays it off in full each month. And she's never been late on a monthly bill. Her credit score was over 750, which is considered excellent.

 

Despite that stellar record, multiple lenders turned her down for a mortgage earlier this year. The reason, they told her, was that her credit record was simply too light. Since she had paid off her student loans and didn't use much credit elsewhere, they had no way of knowing whether or not she would be responsible with a mortgage. In other words, she was being penalized for living a relatively debt-free life. To make matters worse, one of the lenders told her that because she was shopping around so much for a loan, the multiple inquires into her credit report were starting to negatively impact her score.

Her experience gets at one of the great weaknesses of our credit reporting system: In order to borrow money, you have to have already borrowed money. That's the only way you can demonstrate that you are "credit-worthy," as the credit reporting bureaus put it. To get to the bottom of this conundrum, I spoke with Rod Griffin, public education director for Experian, one of the big credit reporting bureaus. Here are two truths and four myths about credit reports:

Tue, 03/22/2011 - 14:09 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Does Woody Allen's line of "I don't want to be part of any club that would have me as a member" apply here?

Tue, 03/22/2011 - 14:09 | Link to Comment brunoaa
brunoaa's picture

not woody allen, groucho marx

Tue, 03/22/2011 - 14:19 | Link to Comment long juan silver
long juan silver's picture
  Now there sits a man with an open mind. You can feel the draft from here.
Tue, 03/22/2011 - 13:59 | Link to Comment Misean
Misean's picture

Weakness?!?! The credit system is the modern equivalent of the company store! It's brilliant! Well, for our credit masters, anyway.

Tue, 03/22/2011 - 14:00 | Link to Comment 101 years and c...
101 years and counting's picture

or, banks just arent making loans and they will use whatever excuse they want.  if she applied in 2004-2008, she would have been approved for a 350K loan.

 

 

Tue, 03/22/2011 - 14:11 | Link to Comment SteveNYC
SteveNYC's picture

Bahahaha!! Brilliant find.

"Uuuuhhhh, Mr. Bank, you can stick your credit up your ass. Don't want any, don't need any, I'll pay cash, thank you!"

Tue, 03/22/2011 - 14:27 | Link to Comment Pants McPants
Pants McPants's picture

What a silly - but perfect - anecdote to describe the US financial system as a whole.  Debt prison for all!

On a serious note, I suspect those requirements will change in the coming years.  Those who have saved and maintained the purchasing power of his or her money will have decent access to assets that heretofore were considered unattainable.

Tue, 03/22/2011 - 14:41 | Link to Comment internethobo
internethobo's picture

Yup this is true.  I realized this years ago and to beat this system I did the following:

-I applied for and receive 16 credit cards
-After a few months I called each card to increase the credit limit to the highest they would go without running my credit again

-I use two cards a month and cycle through them in order.  This prevents the credit card companies from closing the accounts for inactivity.

-I pay off the cards that were used every month

 

This process not only boosts your credit score, but increases your debt to credit ratio.  Of course you need to be responsible on using your credit!  Ever since I did this, I have never been denied a mortgage, personal, or business loan or line of credit.

Tue, 03/22/2011 - 18:36 | Link to Comment The Alarmist
The Alarmist's picture

OMG, a slave who willingly slaps on the chains.

Tue, 03/22/2011 - 15:18 | Link to Comment redpill
redpill's picture

Addicts only, please!

Tue, 03/22/2011 - 13:54 | Link to Comment H. Perowne
H. Perowne's picture

Deus impedito esuritori nullus

Tue, 03/22/2011 - 13:59 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

No God Can Stop a Hungry Man.

How about a King? Burger King.

Tue, 03/22/2011 - 14:33 | Link to Comment King Dong
King Dong's picture

King Dong?

Tue, 03/22/2011 - 14:04 | Link to Comment AlaricBalth
AlaricBalth's picture

Gubernatio autem potest...

Tue, 03/22/2011 - 14:29 | Link to Comment docj
docj's picture

Illegitimus non carborundum est

Tue, 03/22/2011 - 13:54 | Link to Comment AN0NYM0US
AN0NYM0US's picture

OT

They have time, resources and the will to send the Goldman Sachs algo thief up the river for 6 or 7 years, to convict some small time exec  at Apple for money laundering  but for some reason just can't cobble together sufficient evidence to charge even a single  bankster for money laundering.

Prosecutors say bank executives not easy to charge in criminal money laundering cases

Major banks investigated for doing business with countries facing U.S. economic sanctions have reached agreements four times since January 2009. In those settlements, the institutions pay large fines and agree to meet certain requirements, but no executives face jail time. Last year, U.S. District Judge Emmett Sullivan of Washington labeled one such settlement a “sweetheart deal.” In that settlement, Barclays Bank paid $298 million in penalties but faced no charges.

 

“Why isn’t the government getting rough with these banks?” Sullivan said at an August 2010 hearing.

 

In such cases, Kaufmann said, prosecutors could have indicted lower-level employees who are actually handling the illegal transactions on a day-to-day basis. But that wouldn’t get at the executives who made the decisions — and figuring out exactly who that is can be daunting.

 

http://www.moneylaundering.com/Pages/Home.aspx

Tue, 03/22/2011 - 14:44 | Link to Comment pitz
pitz's picture

Time to hit 'em all with RICO indictments.

Tue, 03/22/2011 - 13:57 | Link to Comment Henry Chinaski
Henry Chinaski's picture

Double digit inflation coupled with double digit unemployment will crush the middle class.

Tue, 03/22/2011 - 13:58 | Link to Comment Vergeltung
Vergeltung's picture

you got that right.

Tue, 03/22/2011 - 14:07 | Link to Comment plocequ1
plocequ1's picture

Gee, Who is going to pay off this debt? If the middle class is crushed, Who does that leave?

Tue, 03/22/2011 - 16:38 | Link to Comment bingaling
bingaling's picture

anybody making less than 5 million a year is your answer -oh and of course small businesses if there any left .

Tue, 03/22/2011 - 14:00 | Link to Comment Village Idiot
Village Idiot's picture

the middle class is crushed.

Tue, 03/22/2011 - 14:07 | Link to Comment H. Perowne
H. Perowne's picture

We still have a middle class?

Tue, 03/22/2011 - 15:35 | Link to Comment Village Idiot
Village Idiot's picture

"We still have a middle class?"

rhetorical, of course.

Tue, 03/22/2011 - 14:10 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

That's the plan. One World Government cannot be instituted while the US still exists as we know it. And the US cannot be brought to heel until the US middle class is crushed. The Hidden Elite are emplying an aresenal of weapons, namely unemployment, inflation, socialism, atheism, moral relativism, single-parent families, divorce, drugs, booze, and promiscuity-- the middle class doesn't stand a chance... unless they wake up Real Soon Now.

Tue, 03/22/2011 - 18:39 | Link to Comment Calmyourself
Calmyourself's picture

You junking fools, for most intents and purposes he is right.  The middle class in this country has been weakened with a multiprong attack. Set up for the asset stripping in progress and the vicious bout coming later this year.  You were convinced of your moral weakness and preyed upon by the media, Government and corrupt institutions.  Your relativistic views have made you easy prey by and large. Listen to any liberal, the world is gray, unfortunately yours is about to get red.

Tue, 03/22/2011 - 18:41 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

He's not just right, he's mother fucking right.

It is also past the point of stopping. Move south and take your gold and weapons. Maybe something can be salvaged.

Tue, 03/22/2011 - 22:00 | Link to Comment Calmyourself
Calmyourself's picture

South where?  South America (Chile) or southern U.S.?  Particular state likely to fare better than others, cuz SHTF and Texas is toast friend, 80 million Azlatans coming across that border..

Tue, 03/22/2011 - 14:51 | Link to Comment Broomer
Broomer's picture

Is there still a middle class to be crushed?

Tue, 03/22/2011 - 13:56 | Link to Comment Ahmeexnal
Tue, 03/22/2011 - 14:05 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Too damn bad if it conflicts with Federal laws.

10th Amendmend Bitchez!

Fed delenda est.

Tue, 03/22/2011 - 14:24 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

The Constitution does not allow States to coin money, but it does say that States may not "make any Thing but gold and silver Coin a Tender in Payment of Debts"... which implies that if a private entitity (or foreign entity) coined bullion, a State could affirmatively recognize it as legal tender.

There is nothing in the Constitution that declares that the Federal Gov't has a monopoly on coining gold and silver-- if it did, then why would the Constitution specifically state that the Federal gov't could not just coin money but also regulate the value of foreign coin? It is clear from the text that coins from any source are allowed to circulate freely. The Constitution allows the Federal Gov't the power to punish those who counterfeit "the current coin", i.e., make facscimiles of Federal or other coin in current circulation; but there is nothing that says that ONLY the Federal Gov't is allowed a monopoly on the circulating coin.

Tue, 03/22/2011 - 15:02 | Link to Comment That Peak Oil Guy
That Peak Oil Guy's picture

You may be right (Constitutionally speaking), but this news story shows that TPTB may have other ideas.

http://www.the33tv.com/sns-rt-usreport-us-crime-ctre72j46l-20110320,0,19...

TPOG

Tue, 03/22/2011 - 15:09 | Link to Comment pazmaker
Tue, 03/22/2011 - 15:20 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Supremacy clause under Article VI says 'no,' me thinks.

Since the coinage of money is exclusively a function of Congress under the enumerated powers (even though Congress has delegated that function to our very much beloved Federal Reserve), there is no 'slot' or 'vacuum' that has been reserved for the states in this arena.

I'd love to hear contrasting views, though.

See:

Marbury v. Madison (1803)

-and-

McCulloch v. Maryland (1819)

Tue, 03/22/2011 - 18:47 | Link to Comment The Alarmist
The Alarmist's picture

You are confusing the power to coin money with the power to have a monopoly to coin and regulate money ... if you re-read Art. 1 § 8, the powers are to coin money and regulate the value thereof, and to make laws dealing with the counterfeiting of US money.  I suppose you could stretch the "necessary & proper" clause to allow for the crushing of competing forms of money. I think they only got the guy with his silver dollars because they were similar enough in design to be credibly designated a counterfeit. Doom on him.

Tue, 03/22/2011 - 21:22 | Link to Comment stollcri
stollcri's picture

Money is such an odd subject. This is my understanding, though I could be wrong:

The US mint was the entity that created specie money (gold/silver money), but independent banks were able to use specie money as capital to issue bank notes (fiat money) at up to 3-1 leverage. When the 2nd Bank of the US came into being it handled settlements for the bank notes. But, the Bank of the US would deliver bank notes to the originating bank in the settlement process and take specie in return; this had the effect of draining local banks of specie and concentrating it in Philadelphia (or New York?) where the Bank of the US was located. Back then they apparently understood the difference between specie and fiat, and the states were not happy that their "real" money was being exported to the banking centers. Maryland wanted to stifle expatriation of specie money from their state and thus enacted the tax on foreign notes, this spurred McCulloch v. Maryland. Since the 2nd Bank of the US was a federal government entity the court ruled that a state could not levy taxes on it's business (states can't over-ride or tax the federal government, hence supremacy clause). It was because of problems like this that when the federal reserve system was established they founded regional reserve banks to hold each region's specie.

So, there must some other, more modern, law that prevents banks (or states or whatever) from issuing bank notes (then again, we really don't have specie money, so it would be fiat-fiat money, which must be exponentially worse).

Tue, 03/22/2011 - 19:22 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

You may be misinterpreting the intent of the constitution.  Article 1, Section 10, Clause 1 states, "...make any Thing but gold and silver Coin a Tender in Payment of Debts...", where "make" means force and or demand.  The intent was to prevent a state from demanding payment for a debt in a form other than gold or silver.  It was included to prevent states from preferential relief of debts.  It's really an extension of the prohibition of states coining money.  It doesn't at all imply private individuals have the right to coin money.

Tue, 03/22/2011 - 19:35 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

"States may not make anything but gold and silver Coin a Tender in Payment of Debts ..."

Everyone's missing this GLARING statement.

It is UNCONSTITUTIONAL for states to allow PAPER CURRENCY in payment of debts.

It is UNCONSTITUTIONAL for states to allow FRNs in payment of debts.

So WHY has this prohibition been ignored since 1913, maybe longer?

 

Tue, 03/22/2011 - 14:07 | Link to Comment UGrev
UGrev's picture

Fuck federal law. Good for the states.. Tell the Fed where to stick it. Secession, however "tin-foil" it might have been, may impress upon the lips of many elected officials in the many states. I know for sure it's on the lips of their citizens. Please, Obi-Texas.. you're our only hope.. 

Tue, 03/22/2011 - 14:43 | Link to Comment HoofHearted
HoofHearted's picture

Everyone around here has probably already read it, but if not look into Thomas Woods' stuff on nullification.

Tue, 03/22/2011 - 13:58 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

"Inflation??? You trippin homie...."

Ben Bernanke

 

Tue, 03/22/2011 - 13:57 | Link to Comment Misean
Misean's picture

I'm gonna dust off my old W.I.N. buttons! Tie it in to the Charlie phenom!

Tue, 03/22/2011 - 13:58 | Link to Comment LawsofPhysics
LawsofPhysics's picture

New banner over the federal reserve building reads "Mission Accomplished"

Tue, 03/22/2011 - 13:58 | Link to Comment carbonmutant
carbonmutant's picture

Time for this administration to turn this hot potato over to someone they can blame for the austerity to come...

Tue, 03/22/2011 - 17:59 | Link to Comment James
James's picture

The Feds 100 yr. charter ends in 2013.

Tue, 03/22/2011 - 20:23 | Link to Comment PeterSchump
PeterSchump's picture

So they are right on schedule then.  They should have everything all well destroyed just in time.

Tue, 03/22/2011 - 14:01 | Link to Comment gimli
gimli's picture

By the way .... if mustard doesn't get to expensive, it tastes pretty good on an Ipad 1 and 2.

(Food for thought).....

Tue, 03/22/2011 - 16:29 | Link to Comment Antarctico
Antarctico's picture

A coarsely ground horseradish mustard should complement the iPad's phenolic undertones.

Tue, 03/22/2011 - 13:59 | Link to Comment X. Kurt OSis
X. Kurt OSis's picture

Who cares.  Inflation is good for sheep.  Wealth effect.

Tue, 03/22/2011 - 14:03 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

Here is a simple Elite metric to judge if the middle class has too much money:

Bottled water sales. If they are up, or steady, the middle class has too much money.

Tue, 03/22/2011 - 15:06 | Link to Comment E
E's picture

True, except when people start hoarding water because of the nuclear rains.

Tue, 03/22/2011 - 18:04 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

The worst that will happen is the locals in Japan die at an average age of 40. Plenty of time to make a new generation.

 

Tue, 03/22/2011 - 14:03 | Link to Comment TooBearish
TooBearish's picture

Tyler-OT - hearing JPM note saying Portugal gov't failure likely, as soon as tomorrow....can you please confirm?

Tue, 03/22/2011 - 14:07 | Link to Comment X. Kurt OSis
X. Kurt OSis's picture

Not possible.  JPM's hidden prop desk must have just initiated a short in Portugese sovereigns. 

 

 

Tue, 03/22/2011 - 14:14 | Link to Comment Dick Darlington
Dick Darlington's picture

True! Portuguese opposition has said they will not back the governments new austerity measures and have not changed their mind despite the governments efforts to get them on board. Prime minister said he will probably resign and govt will fail if the new measures are not passed and the finance minister said the same. There is supposed to be a vote tomorrow so there's a lot of time to buy the dip.

Tue, 03/22/2011 - 14:22 | Link to Comment X. Kurt OSis
X. Kurt OSis's picture

Gubermint theatrics.  Vote is tomorrow.  The idea that Portugal will go tits up tomorrow is not possible.

The Prime Minister is a drama queen.  More mutually assured destruction non-sense.  Trade on this at your own peril.

Tue, 03/22/2011 - 14:04 | Link to Comment AlaricBalth
AlaricBalth's picture

Gubernatio autem potest...

Tue, 03/22/2011 - 14:05 | Link to Comment Out9922
Out9922's picture

This is what I feel like right now:

http://www.youtube.com/watch?v=xP1-oquwoL8

 

Tue, 03/22/2011 - 14:05 | Link to Comment TruthInSunshine
TruthInSunshine's picture

If they rename inflation 'funflation,' there shouldn't be any problems.

 

Sheesh.

Tue, 03/22/2011 - 14:08 | Link to Comment hambone
hambone's picture

thanks - needed the laugh

Tue, 03/22/2011 - 14:12 | Link to Comment TooBearish
TooBearish's picture

Tyler-OT - hearing JPM note saying Portugal gov't failure likely, as soon as tomorrow....can you please confirm?

Tue, 03/22/2011 - 14:23 | Link to Comment Cdad
Cdad's picture

hearing JPM note saying Portugal gov't failure likely, as soon as tomorrow

Bullish!  People radiated, people losing faith in government, defaults, tsunamis, downgrades, quarterly misses, funflation, violations of the constitution, crony capitalism, criminal Wall Street banking syndicates ripping off mortgage holders...and everything else you can think of.  Bullish!

In fact, if you knew that, why the hell are you here posting?  You should be off somewhere buying the crap out of ES.

Less fluoride...more Valium, folks.

Tue, 03/22/2011 - 14:12 | Link to Comment jkruffin
jkruffin's picture

Michelle Caruso Cabrerra busted at Bernanke's House:

http://www.youtube.com/watch?v=JPZ6Cuh8-Yk

WOW!!  I knew it!!!

Tue, 03/22/2011 - 14:12 | Link to Comment hambone
hambone's picture

I am astounished by the near (JL?) complete lack of "patriots" taking matters into their own hands and demonstrating that although the judicial law no longer exists for TPTB that there still is the law of the jungle.  Could see how some might believe that many veterans fought and paid the ultimate price for far less.

Astounding really.

Tue, 03/22/2011 - 14:15 | Link to Comment AmazingLarry
AmazingLarry's picture

Bullshit. The iFone 3Gs is now an amazing $49! Plus it's gluten free!

Tue, 03/22/2011 - 14:16 | Link to Comment 10kby2k
10kby2k's picture

Why would anyone argue that there isn't inflation? Just a peek at the CRB says it all. Its just coincidence that QE2 follows that precise timeframe.  

Tue, 03/22/2011 - 14:16 | Link to Comment Mrmojorisin515
Mrmojorisin515's picture

anybody have a subscription to shadowstats?  I'd like to read the hyperinflationary update

Tue, 03/22/2011 - 14:34 | Link to Comment Tail Dogging The Wag
Tail Dogging The Wag's picture

The greenback is being butchered in the ring.

... and a very interesting piece on the NY Times. Written by Mr X from the Council on Foreign Relations. WTF

http://www.nytimes.com/2011/03/21/opinion/21klein.html?_r=1&partner=rss&emc=rss

Tue, 03/22/2011 - 16:48 | Link to Comment PulauHantu29
PulauHantu29's picture

Tail, good piece. However, many youngsters today refuse to work for less then $100k a year. I read more and more that college grads feel they "are more valuable" then $60k a year. Few want to begin at the "bottom" and work up. This is the new work ethic.

Yet I see international students literally "coming off the boat" with nothing and working up from min wage to high salaries. This is the New Reality.

Tue, 03/22/2011 - 21:33 | Link to Comment johnnynaps
johnnynaps's picture

bzzzzz! Wrong! We feel that we are more valuable than to be exploited with a 60 hour work week ruining our bodies only to make $32,000 a year. We have no problem starting at the bottom, but the bottom just got deeper the past few years and there is a board covering the top. We have been duped into taking out huge students loans and are getting banged in the rear as our government piles on more debt that we will have to repay.  

Tue, 03/22/2011 - 15:09 | Link to Comment Modern Money Me...
Modern Money Mechanics's picture


Three 'Flations
There are not enough people to pay back debt created by the former shadow banking industry. For the last two years, more and more millions of people continue to default on debt. From the top of the heap at the Federal Reserve, it appears to the Board of Governors and Ben Bernanke as *deflation* with more debt defaults than money creation, so trillions are pumped into the system. Regardlessm see below as M3 continues to shrink from $14.4 trillion to ~$13 trillion.

From the view of the mega-banks buying back the Treasuries, life is good. They make $millions in fees and they see *price inflation*, but no problem since a 10% per annum increase in food is nothing compared to their income.

From the view of salaried employees, it *stagflation* since the government has been understating price inflation for decades while real price inflation has been doubling every seven or so years.
<pre>
Year M3 money  YtY  Cumulative  BLS   Cost     M3
     supply     %       %       1980   of    Doubling
       in      Inc  Increase    CPI   Living Interval
    $trillions                  Infla Adjust
1959 $00.299                          (COLA)
1960 $00.315 05.35%
1961 $00.341 08.25% 013.61%
1962 $00.371 08.80% 022.40%
1963 $00.406 09.43% 031.84%
1964 $00.422 03.94% 035.78%
1965 $00.482 14.22% 050.00%
1966 $00.505 04.77% 054.77%
1967 $00.558 10.50% 065.26%
1968 $00.607 08.78% 074.04%                   9 Years
1969 $00.616 01.48% 075.53%
1970 $00.677 09.90% 085.43% 05.84%
1971 $00.776 14.62% 100.05% 04.29%
1972 $00.886 14.18% 114.23% 03.27%
1973 $00.985 11.17% 125.40% 06.18%
1974 $01.069 08.53% 133.93% 11.05%
1975 $01.170 09.45% 143.38% 09.14%   8.0      7 Years
1976 $01.310 11.97% 155.34% 05.74%   6.4
1977 $01.470 12.21% 167.56% 06.50%   5.9
1978 $01.645 11.90% 179.46% 07.63%   6.5
1979 $01.809 09.97% 189.43% 11.25%   9.9
1980 $01.996 10.34% 199.77% 13.55%  14.3
1981 $02.255 12.98% 212.74% 10.33%  11.2
1982 $02.461 09.14% 221.88% 06.13%   7.4      7 Years
1983 $02.697 09.59% 231.47% 03.83%   3.5
1984 $02.991 10.90% 242.37% 05.30%   3.5  Gimmicked
1985 $03.208 07.26% 249.63% 04.58%   3.1     CPI
1986 $03.499 09.07% 258.70% 02.92%   1.3   Begins
1987 $03.687 05.37% 264.07% 04.99%   4.2
1988 $03.929 06.56% 270.63% 05.94%   4.0
1989 $04.077 03.77% 274.40% 06.71%   4.7
1990 $04.155 01.91% 276.31% 07.69%   5.4
1991 $04.210 01.32% 277.64% 06.53%   3.7
1992 $04.223 00.31% 277.95% 05.33%   3.0
1993 $04.286 01.49% 279.44% 05.42%   2.6
1994 $04.370 01.96% 281.40% 05.98%   2.8
1995 $04.636 06.09% 287.48% 06.52%   2.6
1996 $04.986 07.55% 295.03% 07.74%   2.9     14 Years
1997 $05.461 09.53% 304.56% 08.03%   2.1
1998 $06.052 10.82% 315.38% 07.79%   1.3
1999 $06.552 08.26% 323.64% 08.47%   2.5
2000 $07.117 08.62% 332.27% 09.74%   3.5
2001 $08.035 12.90% 345.17% 09.12%   2.6
2002 $08.568 06.63% 351.80% 07.85%   1.4
2003 $08.872 03.55% 355.35% 08.55%   2.1      7 Years
2004 $09.433 06.32% 361.67% 09.09%   2.7
2005 $10.154 07.64% 369.31% 10.05%   4.1
2006 $11.206 10.36% 379.68% 10.18%   3.3
2007 $12.917 15.27% 394.94% 10.51%   2.3
2008 $14.395 11.44% 406.39% 09.26%   5.8
2009 $14.432 00.01% 406.40% 08.51%   0.0
2010 $13.990 -0.03% 406.37% 07.50%   0.0
</pre>
Definitions of M3, MZM, M2, M1, & M0
http://en.wikipedia.org/wiki/Money_supply
M3 and non-M2 components since 1959
http://www.federalreserve.gov/releases/h6/hist/h6hista.txt
http://www.shadowstats.com/alternate_data


Edit: Shadowstats is showing a solid 9% as of Mar 17th.

http://www.shadowstats.com/alternate_data/inflation-charts

Tue, 03/22/2011 - 14:23 | Link to Comment docj
docj's picture

But Benron told us inflation was "under control".  I guess he never specified under whose control it was.

I hope iPads are low-carb.

Tue, 03/22/2011 - 14:27 | Link to Comment Misean
Misean's picture

Of course it's under control. Bankster bonus growth far excedes the paltry rate of inflation.

Tue, 03/22/2011 - 14:30 | Link to Comment docj
docj's picture

And that's all that matters, so it's all good.  Rally on!!

Tue, 03/22/2011 - 14:30 | Link to Comment americanspirit
americanspirit's picture

Cookie Monster loves eating iPads. Yum.

Tue, 03/22/2011 - 14:34 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

What type of wine should one quaff with an iPad?  A red Burgundy, perhaps?  

Tue, 03/22/2011 - 14:42 | Link to Comment The Answer Is 42
The Answer Is 42's picture

depends on the ipad's color, silly.

Tue, 03/22/2011 - 14:30 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

Peter Schiff at the CFR...

 

"How Should the US Address Its Chinese Trade Imbalance" - http://www.cfr.org/china/should-united-states-address-its-chinese-trade-imbalance-video/p24332 

Tue, 03/22/2011 - 14:33 | Link to Comment MiddleMeThis
MiddleMeThis's picture

Too bad there will be a lack of iPad production due to the disaster in Japan.  I guess the rich will simply have to start eating the poor.

Tue, 03/22/2011 - 14:34 | Link to Comment FoieGras
FoieGras's picture

Ah the famous Birinyi "extrapolation by applying a ruler".

In other news, SP500 on track to 2,500 by 2013.

 

Tue, 03/22/2011 - 14:42 | Link to Comment sbenard
sbenard's picture

Thanks, Tyler, for printing the story that the news media won't!

Tue, 03/22/2011 - 15:30 | Link to Comment bob_dabolina
bob_dabolina's picture

The media doesn't report a lot of news because rubbing two peanuts together yields more intelligence than all the collective synapses of an average American brain.

Better off sticking to something easier to understand; Charlie Sheen.

Tue, 03/22/2011 - 15:00 | Link to Comment gwar5
gwar5's picture

Think that's what shadowstats has been showing too -- right at 8%. That's what it sure feels like.

Tue, 03/22/2011 - 15:03 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

No worries, "Owner's Equivalent Rent" will keep the official CPI down.

Tue, 03/22/2011 - 15:08 | Link to Comment FoieGras
FoieGras's picture

OER kept CPI positive 2008-2009. It works both ways.

Tue, 03/22/2011 - 15:14 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Pure awesomeness, right here -

#winning

                             
Tue, 03/22/2011 - 15:18 | Link to Comment RunningMan
RunningMan's picture

I don't necessarily buy the fact that this is all one big conspiracy. Actually I think people like BB and Obama think they are being "responsible adults" by spinning the heck out of flawed "fixes", or playing down information (e.g. the radiation story). Honestly, I worry more about inflation than radiation right now. micro-SV (or less) won't kill us, but 8% inflation (or more) might...

Tue, 03/22/2011 - 15:18 | Link to Comment Overpowered By Funk
Overpowered By Funk's picture

Yeah but, who wants to argue with Steve Liesman? He's got all those charts and stuff...

Tue, 03/22/2011 - 15:23 | Link to Comment redpill
redpill's picture

It's a good thing Santelli stays in Chicago, I swear one of these times he'd have punched LIESman in the face if he were in studio.

Tue, 03/22/2011 - 15:25 | Link to Comment carbonmutant
carbonmutant's picture

Steve is antiFox...

Tue, 03/22/2011 - 15:26 | Link to Comment 10kby2k
10kby2k's picture

Whoda thunk inflation with 2 years of 0.25% fed funds and $2+ tril stimulation.

Tue, 03/22/2011 - 15:28 | Link to Comment plata pura
plata pura's picture

A GSR of 39.21 be intolerable. Parity will come as the proletariat sweep clean the bourgeoisie.

Tue, 03/22/2011 - 15:40 | Link to Comment Hundredwaters
Hundredwaters's picture

Fascinating...  if it were true.  I dont get where this article is getting this information.  The MIT site has plenty of metrics that suggest that inflation will taper off at 3%.  Im not arguing this, but more pointing out that the basis for this speculation of 8% inflation is weak at best from the data culled from the MIT project.  Anyone care to counter this?

Tue, 03/22/2011 - 16:04 | Link to Comment FOC 1183
FOC 1183's picture

MIT Billion Prices Index (http://bpp.mit.edu/daily-price-indexes/):

12/31/2010: 101.0892

03/18/2011: 102.8306 (Latest reading)

% Change = (102.8306/101.0892) - 1 = 1.7226% for 78 days

Annualized = (% Change + 1)^(365/78) - 1 = 8.32%

 

Tue, 03/22/2011 - 16:31 | Link to Comment bingaling
bingaling's picture

How does it feel to get bitchslapped bitch ?<sarc on> I love how you suggest this will just taper off<sarc off> . Japan isn't even priced in yet bitch .

+8% FOC1183

Tue, 03/22/2011 - 15:42 | Link to Comment buzzsaw99
Tue, 03/22/2011 - 16:28 | Link to Comment Bazooka
Bazooka's picture

Dear Mr. President Obama,

For once in your political career....grow a pair and lead! If you truly lead, we the people will follow.

Your promises of hope and change....ha!

Know this, you will NOT be re-elected, so in the time remaining, grow a pair and act on behalf of us Americans.

Where are the hand cuffs? These Banskster terrorists and inventors of financial weapons of mass destruction....you hire them into your cabinet!

As Celente says, when we lose our jobs, our homes and have no more to lose....we will lose it. The used to be middle-class will rise up.

Tue, 03/22/2011 - 17:21 | Link to Comment Terminus C
Terminus C's picture

You are under the amusing illusion that your vote counts.

Tue, 03/22/2011 - 18:33 | Link to Comment SunSword
SunSword's picture

> Know this, you will NOT be re-elected, so in the time remaining, grow a pair and act on behalf of us Americans.

 

Really? Assume Sarah Palin run and wins the Republican nomination because Mittens and the "old white guys" can't get it together. In that scenario, how many people who have been programmed by the MSM to believe that Palin is the devil will simply show up to vote against her? Thus enabling a 2nd term for the Big O. Of course after that America will continue to sink until it is utterly destroyed.

Tue, 03/22/2011 - 18:08 | Link to Comment PulauHantu29
PulauHantu29's picture

INflation has been running over 8% for awhile now. But I bet $100 that the official BLS CPI will remain near zero.

Alternatively, the BLS will throw out any numbers that look like inflation....just change the equation.

Tue, 03/22/2011 - 16:43 | Link to Comment Infinite QE
Infinite QE's picture

Where the feck is Prechter and his deflation nonsense? On the phone with Tulving or what?

Tue, 03/22/2011 - 18:15 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Prechter severely underestimated alchemist powers of The Bernank.

Now, I'm not saying Bernank's a magician, but he has managed to outdo the last conman to proclaim such powers, IMO.

The big question and answer that will make or break bank is for how much longer?

Tue, 03/22/2011 - 17:32 | Link to Comment Nnthnt1
Nnthnt1's picture

100% Correlation does not mean the two quantaties are the same. It means they GEOMETRICALLY move perfectly together.

Nevertheless. Real inflation is of course at 8%

Tue, 03/22/2011 - 18:56 | Link to Comment The Alarmist
The Alarmist's picture

I think you mean to say that 100% correlation does not mean there is a causal relationship between the two elements.  It is implied by terms like independent and dependent variables, but there is such a thing as a spurious correlation.

Tue, 03/22/2011 - 18:52 | Link to Comment One_Eyed_Pony
One_Eyed_Pony's picture

MIT BPP is right in line with Shadow Stats...

 

Once again the FEDERAL RESERVE and BLS propaganda statistics are full of sh!t!

 

One can argue that it's higher with all the recent Tax/Fee.surcharges and increases by .gov @ all levels... in certain situations.

Tue, 03/22/2011 - 18:53 | Link to Comment The Alarmist
The Alarmist's picture

I am shocked, shocked to hear that inflation is rearing its ugly head as the US tax code becomes increasingly de-indexed ... you would think this might be a deliberate plan.

Look, the only way out of this mess is a "healthy dose" of inflation, and 8% to 10% is the Goldilocks Zone ... the question is whether or not Ben and his criminal syndicate can keep the rate in the zone. 

We all know the answer to that one.

Tue, 03/22/2011 - 18:59 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

8.3%?

Double it.

Tue, 03/22/2011 - 19:20 | Link to Comment In Ponzi We Trust
In Ponzi We Trust's picture

I think the MIT numbers might be a little low.  According to verifythecpi.blogspot.com, inflation for 2010 was 8.38% with gas prices up 11.12%.  So far in 2011, overall prices have risen 3.57% with gas up 24.71%!  This would be over 14% on an annualized basis.

Tue, 03/22/2011 - 22:56 | Link to Comment Instant Karma
Instant Karma's picture

8.3% inflation. Overall, sure. But if you factor out all the things going up in price, and heavily weight things going down in price (housing), "core" CPI is 2%.

Nothing to see here. Keep moving. Carry on.

Tue, 03/22/2011 - 22:58 | Link to Comment yxhlhq
yxhlhq's picture

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Tue, 03/22/2011 - 23:41 | Link to Comment HungrySeagull
HungrySeagull's picture

Oh good, a 8 to 10% COLA increase would be very welcome come Jan 1.

Thu, 03/24/2011 - 01:22 | Link to Comment Hundredwaters
Hundredwaters's picture

I understand where the 8+% is calculated from...  It's just not a valid extrapolation.  None of the curves of inflation display a linear year-long increase...  It is just as likely to pull back as it is to continue assuming that some of these price increases are speculators...

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