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CPI Report: Inflation Rises 6.8% in the Last Year, Highest in 39 Years

CPI Report: Inflation Rises 6.8% in the Last Year, Highest in 39 Years

BIDEN BOOM! That is also six months straight of inflation over 5%.

How about that Biden Boom, you guys?!

The consumer price index (CPI) rose 6.8% from November 2020 to November 2021, the fastest increase since June 1982.

That is also six months straight of inflation over 5%.

The administration will likely concentrate on the 0.5% (excluding food and energy) rise from October to November because holy moly. 6.8%! ORANGE MAN BAD. WHITE SUPREMACY. Or something.

Even if you take out food and energy inflation rose 4.9% in the past 12 months, which is higher than the 4.6% rise in October. That increase was the highest since 1991!

Everything skyrocketed in the past 12 months. EVERYTHING. The increases in food and energy are “the fastest 12-month gains in at least 13 years.”

Biden has long downplayed inflation, using it in November to boost the need for his trillion-dollar Build Back Better bill: “Fortunately, in the weeks since the data for tomorrow’s inflation report was collected, energy prices have dropped. The information being released tomorrow on energy in November does not reflect today’s reality, and it does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market.”

Okay, bro. If you say so. Cannot wait to hear you brush aside this report.

You cannot use wage increases to ignore inflation.

You cannot use any jobs report to ignore inflation.

My friend Rudy Havenstein on Twitter is a genius. I don’t know who runs the account, but it is worth a follow whether you’re a finance geek or not.

Rudy is a straight arrow and the most intelligent finance mind on the interwebs. He’s been calling out the Fed and warning about massive inflation for months. He is on a roll RTing his old tweets. (Note the dates on the tweets)

The brilliant Scott Lincicome is right on the money.


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Consequences. Why do people keep blaming us just because we caused them?

1. There will be no inflation
2. There is no inflation now or in the future
3. There is a tiny little bit, but it’s transitory
4. Anyway I inherited it from Trump
5. Okay, now I’m gone.
6. What difference does it make now?


Bumbling, vicious fools.

If they calculated it with the same formula they used for Carter/Reagan, inflation would be 14%.

We are knocking on the door of galloping inflation and once we hit hyperinflation default is all that’s left.


Not until they run out of gas for all the gaslighting.
At this rate it will be within 6 months because Gas prices are going up faster than ever.

Unconstitutional elections have consequences.

But, hey. No mean tweets.

Wait until people start seeing their natural gas heating bills this winter.

Natural gas costs in some areas are already up over 100% from last year.

Let’s Go Brandon!

Aw, hell… you went and told them that 39 years ago, someone had higher inflation.
You KNOW how Democrats are hung up on meaningless “firsts.”
Now we’re all gonna hafta hold their damn beer.

    you went and told them that 39 years ago, someone had higher inflation

    A number specifically chosen to coincide with Reagan’s term, rather than going back a couple more years and implicating Carter.

Everyone should be asking Biden if he’s going to copy Nixon’s price controls.

The photo of Biden with his back to the camera is symbolic of his policies and his administration. He stands with his back to America. He turns his back on Americans, our ideals and our way of life and embraces socialism, racism and elitism.

Milton Friedman won his Nobel Prize for his thesis that inflation is strictly a monetary phenomenon. The wrinkle (and I don’t know how Friedman treated it) is turnover, i.e. the “velocity” of money. Velocity is integral, but maddening to analyze because it cannot be reliably measured, or at least that’s what I recall from when I looked at the issue.

As it concerns the current situation, I start with the link below from the New York Times. Horribly degraded in the past 20 years, but even a blind squirrel stumbles across an acorn every so often. This is an acorn:

To someone like me, who was close to all these numbers and concepts in two careers, there’s a lot of information here. The biggie is that the national savings rate spiked with the stimulus checks, and is now back to the 2019 level. I expect two things to happen, one of which might have already started.

The first is a lot fewer help-wanted signs because more people will have to go back to work. In turn, that will increase the size of the participating labor force, which includes both those with jobs and those actively looking for work. We’ll probably see the official unemployment number rise, but by how much and when in the year is beyond my skill.

The second is a change in velocity, or V. Stimulus money is quite volatile, but as those balances dwindle it will decline. Early Christmas sales numbers point that way. Not only are brick-and-mortar sales stagnant this season but the same is true online. Inflation tends to increase V, so these trends will be doing battle.

I believe that the Fed’s prediction that inflation will be “transitory” is rooted in its expectation that V will decline as the stimulus pig works its way through the python. If Manchin holds firm on “BBB,” that prediction will be tested quickly. If, as I expect, people go back to work and the labor shortages are reduced, real earnings will still be reduced by the inflation already in the system, and economic optimism will not improve.

This will be especially bad if the “transitory” prediction fails, because then the Fed will confront 1970s-style “stagflation.” If that happens, the effects will be worse than back then, especially on the federal gov’t because the debt load is so much higher and will limit the response to a far greater degree than before.

Bottom line: Best case is that people go back to work, inflation subsides (having been “transitory,” as in the late 1940s), but people don’t feel very good about it. Worst case is stagflation, and a “vicious cycle” where the negatives are reinforcing and dominant. Either way, the ’22 midterms are the Republicans’ to lose. No one should ever discount the ability of either party to blow it. Anything less than 50 seats in the House will be a R failure in my eyes, given how this is shaping up.

Because I’m retired from finance, I don’t have access to data and analysis at anything remotely close to the past. Frustrating, and it’s why I have to do much more of the two-handed economist thing than I want. But I refuse to make shit up, so this is the best I can do while retaining the integrity and objectivity that I prize.

Here’s an article typical of the media’s uneducated bullshit:

The money quote:

“Friday’s inflation report shows that the data are broadly consistent with Powell’s prior argument that dynamics related to the pandemic and the resulting global supply-chain problems are driving most of the surge in prices, and that inflation should fall back in 2022 if those issues get resolved. At least one economic forecaster believes that by next November—the month of the midterms—the headline inflation rate will have fallen to below two per cent.”

Inflation is a monetary phenomenon. It’s NOT a function of supply-chain interruptions, or even of higher fuel prices. If money is under control, price increases in one area would be offset by declines elsewhere. If money is too abundant, inflation rises across the board — which is what’s happening now.

The article cites strong wage growth in one sector while ignoring all the rest. It’s a telltale sign of bias, incompetence, or both. Facts are essential, but when they’re cherry-picked, the analysis is useless. Same for economists, 90%+ of whom are close to useless. Lots and LOTS of studies going way, way back show that the consensus forecasts of economists suck.

“That forecaster is the consulting firm Oxford Economics. After Friday’s report was released, I spoke with Gregory Daco, the firm’s chief U.S. economist, who said the report showed the same trends that have been evident for months: strong upward pressure on the price of physical goods, many of which depend on far-flung supply chains, and significant but smaller price rises for services, which have been less affected by pandemic-related disruptions.

“On a seasonally adjusted basis, the prices of new vehicles increased by 1.1 per cent between October and November, and the cost of used vehicles rose 2.5 per cent. Energy prices rose by 3.5 per cent, with the biggest increases coming in gasoline and fuel oil. By contrast, the price of non-energy services increased by 0.4 per cent, the same increase as in the previous month. ‘If you look out to next year, twelve months from now, you are likely going to see much lower goods-price inflation and somewhat higher services-price inflation,’ Daco said. ‘But, on net, you will see substantially lower inflation.’ ”

He’s repeating the “transitory inflation” line even after Powell has shown some signs of backing away from it. The more I see of that kind of lazy thinking, the less optimistic I become. Kids, even BEFORE the media killed journalism, they were bad at covering the economy. I’d have thought it impossible to be worse than they were, but I’d have been wrong.

One more thing.

The inflation numbers include “owners’ equivalent rent,” which tries to capture residential real estate inflation. One of these days I will dive into that number, which is a big part of inflation measurement. I wonder about the formula, and especially about time lags.

No question that real estate prices are way up. A related issue is the effect on sales of furniture, appliances, and other goods connected to remodeling. If the Fed has to hit the brakes next year, I think the first place to be affected in the real economy will be real estate, which is what the ’00s were all about.

Lots of flashing yellow lights.