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Money, Banking and the Economy
HockeyDad Offline
#251 Posted:
Joined: 09-20-2000
Posts: 42,828
RayR wrote:
I thought Florida was supposed to sink underwater like Atlantis because of global warming?
Watch out for those sinkhole prone areas too, they're a killer.


You’re gonna get really hot first. (Like a Democrat burning in hell kinda hot) and then the ice caps melt and then you go underwater.
tonygraz Offline
#252 Posted:
Joined: 08-11-2008
Posts: 18,026
HockeyDad wrote:
It makes no sense that the Orlando market is tight with everyone being killed off by ‘Rona. Unless the New Yorkers are buying up Orlando as they flee southward.

The main problem with Orlando is with climate change in 4 years the average summer temperature will be 110 degrees. Basically it will be Scottsdale AZ.



Lots of northerners go south and buy real estate - some for just winter use and others for year round use. Just figure that every other person you meet in Florida was not born there. As to climate change, 110 degrees is a lot more uncomfortable with high humidity.
Abrignac Offline
#253 Posted:
Joined: 02-24-2012
Posts: 16,115
RayR wrote:
It's far superior to being a Hamiltonian progressive who champions centralized government and black-robed despotism.

You spelled Jeffersonian wrong and libertarian is spelled with a lower case "l". With an upper case "L" it would signify a political party.


So you call yourself a libertarian? That’s funny! You do realize that a libertarian advocates for very little government intrusion. Yet, you indulge the internet to prove and proffer your beliefs. IIRC the internet was built by DARPA using tax dollars.
RayR Offline
#254 Posted:
Joined: 07-20-2020
Posts: 5,140
Abrignac wrote:
So you call yourself a libertarian? That’s funny! You do realize that a libertarian advocates for very little government intrusion. Yet, you indulge the internet to prove and proffer your beliefs. IIRC the internet was built by DARPA using tax dollars.


Aren't you a smarty pants! DARPA made da Internets, at least the primitive one for only academics and gubment type people. Did you know they could send e-mails to each other on green CRT's? Ya man, that was cool beans.

It's a good thing it got turned over to the innovation of the private sector market to make it possible for you to edumicate me today.

bgz Offline
#255 Posted:
Joined: 07-29-2014
Posts: 12,006
RayRay walk into a biker bar be like... you're all a bunch of commies...

*drop mic.... walk out*
rfenst Offline
#256 Posted:
Joined: 06-23-2007
Posts: 36,329
Federal Reserve Signals a Shift Away From Pandemic Support
The Fed said it could soon slow its large-scale purchases of government-backed bonds and indicated it might raise interest rates in 2022.

NYT

Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy and predicted they might raise interest rates next year, sending a clear signal that policymakers are preparing to curtail full-blast monetary help as the business environment snaps back from the pandemic shock.

Jerome H. Powell, the Fed’s chair, said during a news conference that the central bank’s bond purchases, which have propped up the economy since the depths of the pandemic downturn, “still have a use, but it’s time for us to begin to taper them.”

That unusual candor came for a reason: Fed officials have been trying to fully prepare markets for their first move away from enormous economic support. Policymakers could announce a slowdown to their monthly government-backed securities purchases as soon as November,
the Fed’s next meeting, and the program may come to a complete end by the middle of next year, Mr. Powell later said. He added that there was “very broad support” on the policy-setting Federal Open Market Committee for such a plan.

Nearly 20 months after the coronavirus pandemic first shook America, the Fed is trying to guide an economy in which business has rebounded as consumers spend strongly, helped along by repeated government stimulus checks and other benefits.

Yet the virus persists and many adults remain unvaccinated, preventing a full return to normal activity. External threats also loom, including tremors in China’s real estate market that have put financial markets on edge. In the United States, partisan wrangling could imperil future government spending plans or even cause a destabilizing delay to a needed debt ceiling increase.

Mr. Powell and his colleagues are navigating those crosscurrents at a time when inflation is high and the labor market, while healing, remains far from full strength. They are weighing when and how to reduce their monetary policy support, hoping to prevent economic or financial market overheating while keeping the recovery on track.

“They want to start the exit,” said Priya Misra, global head of rates strategy at T.D. Securities. “They’re putting the markets on notice.”

Investors took the latest update in stride. The S&P 500 ended up 1 percent for the day, slightly higher than it was before the Fed’s policy statement was released, and yields on government bonds ticked lower, suggesting that investors didn’t see a reason to radically change their expectations for interest rates.

The Fed has been holding its policy rate at rock bottom since March 2020 and is buying $120 billion in government-backed bonds each month, policies that work together to keep many types of borrowing cheap. The combination has fueled lending and spending and helped to foster stronger economic growth, while also contributing to record highs in the stock market.

But now, officials believe the time has come to tiptoe away from such full-fledged support. Late last year, policymakers laid out a lower bar for slowing purchases than for lifting interest rates. They simply wanted to see “substantial further progress” toward their goals of stable inflation and maximum employment before pulling back on asset buying. When it comes to lifting rates, officials indicated they would like to see inflation sustainably at their target and a labor market that is fully healed.

Slowing their asset purchases in the near-term could give the Fed more room to be more nimble in the future. Policymakers have signaled that they want to stop buying securities before moving interest rates above zero.

But Mr. Powell has tried to clearly separate the two decisions, signaling that changes to the policy interest rate — the Fed’s more traditional and more powerful tool — are not imminent.


“You’re going to be well away from satisfying the liftoff test when we begin to taper,” he reiterated on Wednesday.

Half of the Fed’s policymakers expect to lift rates from near-zero next year. Officials released a fresh set of economic projections on Wednesday, laying out their predictions for growth, inflation and the funds rate through the end of 2024. Those included the “dot plot” — a set of anonymous individual estimates showing where each of the Fed’s 18 policymakers expect their interest rate to fall at the end of each year.

Nine Fed policymakers penciled in one or more rate increases next year, up from seven when projections were last released in June. This was the first time the Fed has released 2024 projections, and officials expected rates to stand at 1.8 percent at the end of that year.

The projections also penciled in faster price gains in 2021. Inflation has moved sharply higher in recent months, elevated by supply-chain disruptions and other quirks tied to the pandemic. The Fed’s preferred metric, the personal consumption expenditures index, climbed 4.2 percent in July from a year earlier.

Fed officials expected inflation to average 4.2 percent in the final quarter of 2021 before falling to 2.2 percent in 2022, the new forecasts showed.

Central bankers are trying to predict how inflation will evolve in the coming months and years. Some officials worry that it will remain elevated, fueled by strong consumption and newfound corporate pricing power as consumers come to expect and accept higher costs.


Others fret that the same factors pushing prices higher today will lead to uncomfortably low inflation down the road — for instance, used car prices have contributed heavily to the 2021 increase and could fall as demand wanes. Tepid price increases prevailed before the pandemic started, and the same global trends that had been weighing inflation down could once again dominate.

“Inflation expectations are terribly important, we spend a lot of time watching them, and if we did see them moving up in a troubling way” then “we would certainly react to that,” Mr. Powell said. “We don’t really see that now.”

The Fed’s second goal — full employment — also remains elusive. Millions of jobs remain missing compared with before the pandemic, even after months of historically rapid employment gains. Officials want to avoid lifting interest rates to cool off the economy before the labor market has fully healed. It’s difficult to know when that might be, because the economy has never recovered from pandemic-induced lockdowns before.

“The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic,” Mr. Powell said on Wednesday.

Given those uncertainties, the Fed is likely to move cautiously on raising interest rates.
And while Mr. Powell teed up a possible November announcement that the Fed would start slowing its bond-buying, even that is subject to change if the economy does not shape up as expected — or if major risks on the horizon materialize.

“The start of tapering would be delayed if the debt ceiling standoff is unresolved and markets are in turmoil,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note following the meeting.

Yet Mr. Powell made clear that the Fed was not equipped to ride to the rescue if lawmakers could not resolve their differences.

“It’s just very important that the debt ceiling be raised in a timely fashion,” Mr. Powell said, adding that “no one should assume the Fed or anyone else can protect markets and the economy in the event of a failure” to “make sure that we do pay those, when they’re due.”
RayR Offline
#257 Posted:
Joined: 07-20-2020
Posts: 5,140
In other words, the FED is walking a tightrope of its own creation again. One wrong move in that central planning game and it's all over but weeping and gnashing of teeth.
These anti-free market people disgust me.
rfenst Offline
#258 Posted:
Joined: 06-23-2007
Posts: 36,329
RayR wrote:
In other words, the FED is walking a tightrope of its own creation again. One wrong move in that central planning game and it's all over but weeping and gnashing of teeth.
These anti-free market people disgust me.

So, what do you do or what will you do about it all?
RayR Offline
#259 Posted:
Joined: 07-20-2020
Posts: 5,140
rfenst wrote:
So, what do you do or what will you do about it all?


What am I going to do about it all?LOL Watch it burn since that's what the people seem to be asking for, not that they necessarily want it or understand it. I think you said something before about taking care of yourself and your family the best you can under the system as it is. Yes, but I'm not going to be quiet and go along to get along while leftism burns everything down.
I have no faith in the ability of a bunch of central planners to run or manipulate the economy, no matter if they call themselves FED economists, politicians, or bureaucrats. Their record speaks for itself, they suck at it.
It seems like we've reached that phase in American history where things are closing in more closely to Karl Marx's dream of trying to achieve a socialist Utopia in America than ever before. Is that the same as the Obama/Biden dream of fundamentally transforming America or the Great Reset? I think so. For Obama it was the Great Recession that he thought would give him the impetus for that change, for Biden it's COVID, he said so.
frankj1 Offline
#260 Posted:
Joined: 02-08-2007
Posts: 41,266
I think a Discount Cigar Forum is a very wise and very safe place to state your fears.

I'd like to add what a very wise Psychiatrist-in-Charge of a unit on which I worked early in my first career once told me..."behind every fear is a wish".
It's worth denying the knee jerk response in your gut and should be pondered...there's a balance to work out.

Anyhoo, one day you'll realize we are here for you, will smoke cigars with you, have drinks with you, in celebration, in sorrow, or just because.
We are not satanic commie pedophiles, Ray. We are Americans who disagree with you.
But you are not better.
Ya just gotta be human sometimes, Ray.
RayR Offline
#261 Posted:
Joined: 07-20-2020
Posts: 5,140
That's why it's called the POLITICS section of the forum.

If there's something I said that you disagree with Frank, have at it.
RayR Offline
#262 Posted:
Joined: 07-20-2020
Posts: 5,140
CHICOM's DECLARE WAR ON CRYPTO'S!!!!!

China Declares All Virtual Currency Transactions "Illegal", Sending Crypto Prices Tumbling

BY TYLER DURDEN
FRIDAY, SEP 24, 2021


Quote:
China expanded its escalating crackdown on cryptocurrencies on Friday when its central bank declared that all activities related to digital coins are “illegal” and must be banned.

In a statement the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.

More...

https://www.zerohedge.com/markets/china-declares-all-virtual-currency-transactions-illegal-sending-crypto-prices-tumbling


Kerry Lutz of the Financial Survival Network says...

"We’ve been long-term bears on cryptos for the simple reason that they threaten the most elemental power of sovereign states, the ability print money. From this power, virtually all other powers now flow. Whether it’s government contracts, military financing, schools, every function of government is directly dependent upon its ability to manage its currency."

Possession with Intent to Distribute Bitcoin Now Illegal in China
September 24, 2021

https://www.financialsurvivalnetwork.com/2021/09/possession-with-intent-to-distribute-bitcoin-now-illegal-in-china/
bgz Offline
#263 Posted:
Joined: 07-29-2014
Posts: 12,006
Yes... send that sh*t to the toilet already...


Slept through this mornings dip... was p1ssed.
RayR Offline
#264 Posted:
Joined: 07-20-2020
Posts: 5,140
Ben, you are almost an enemy of the state and a threat to the sovereign funny money monopoly.
bgz Offline
#265 Posted:
Joined: 07-29-2014
Posts: 12,006
RayR wrote:
Ben, you are almost an enemy of the state and a threat to the sovereign funny money monopoly.


No worries... pretty sure the same ones running the stock market are the same ones running crypto.

It's all the same, nobody gaf, lizard people trying to tax it like securities... not sure how that's going to work out.

As it sits now, Maybe the law will work in my favor this year!

Buy high sell low!

Or something like that.

Who am I kidding, I'm up lol.
rfenst Offline
#266 Posted:
Joined: 06-23-2007
Posts: 36,329
How the delta variant cooled California's economic outlook

Los Angeles Times

Remember when the economic recovery in California and the nation was going to seem like the Roaring '20s? That was what UCLA forecasters predicted nine months ago.

Remember when it was likely to be "euphoric"? So they said six months ago.

Or when it was expected to be "boom time for the U.S. economy"? That was three months ago.

But the delta variant of the coronavirus has upended the calculations of forecasters — not just at UCLA Anderson's widely cited group, but among academic, government and corporate economists nationwide.

The outlook has gone from "sizzling to ho-hum," the UCLA quarterly forecast, released Wednesday, reported.

"Back in the spring, the economic optimism was palpable," senior economist Leo Feler wrote. "The U.S. was vaccinating an average of 2 to 3 million people per day. The economy was reopening. Hiring was accelerating. It looked like COVID was finally behind us."

But with entrenched vaccine resistance and rising deaths in many states, consumers are hesitant to go out and spend on entertainment and restaurants, workers are retiring rather than risk infection on the job, business and international travel are dormant and global supply chains are going haywire as the virus closes factories abroad, Feler said.

"What could have been a couple of years of blockbuster economic growth look instead to become years of good, solid, but not spectacular growth."

UCLA predicts gross domestic product will grow this year at 5.6%, down from the 7.1% rate forecast in June. It expects the economy to expand by 4.1% next year, down from the 5% anticipated earlier.

As consumption and investment shift into the future, 2023 growth could be 3.1%, up from the previously forecast 2.2%.
Not until the third quarter of 2023 would GDP reach its pre-COVID-19 trend, according to the new calculation — assuming, Feler said, that the standoff in Congress over lifting the debt limit is resolved.

"A debt default would be a self-inflicted wound — bad for the economy, but we don't really know how bad," he said.
UCLA's forecast for this year is slightly less optimistic than that of the Federal Reserve, which projects GDP growth at 5.9%, down from its June forecast of 7%. The Fed predicts 3.8% growth next year.

California began recovering later than some other states because of its stricter public health measures, but those interventions will mean the state rebounds faster than the nation over the next three years, UCLA economists Jerry Nickelsburg and Leila Bengali suggest.

As of Sunday, the Golden State had the lowest weekly coronavirus case rate of any state: 83 cases for every 100,000 residents. That compares with 271 cases in Texas and 248 cases in Florida — states with loose regulations.

Another boost to the state's economy is that the virus has led to more remote work — a factor that benefits its large technology and professional sectors.

The job market will depend on the uncertain course of the pandemic, the forecasters wrote, but they expect California's employment to rise by 3.5% this year, 3.9% next year and 2.7% in 2023.

That contrasts with projected U.S. employment growth of 3.1%, 3.2% and 2.1% over the same three years.

"Delta has spooked consumers," Nickelsburg wrote. "News reports on breakthrough [infections] and the large number of Californians not vaccinated will likely push a full recovery into the latter part of 2022."

Other forecasters are less optimistic. "I don't expect a full California jobs recovery until late 2023 or even 2024," said Scott Anderson, chief economist at the Bank of the West in San Francisco. "California's economic performance won't be quite as strong as they project with their rosy assumptions around better health outcomes."

Seventy percent of jobs lost in California over the course of the pandemic are in three sectors: leisure and hospitality, education and "other services," a diverse category of businesses such as hair salons and auto repair shops. What they have in common: high person-to-person contact.

Teachers are returning to work, but leisure and hospitality employment "will be the last to recover due to the depth of the decline in this sector, the slower return of restaurant and bar services demand, and the sub-sectors dependent upon international tourism," Nickelsburg wrote.

In a move to restore confidence, Los Angeles, following the lead of San Francisco and New York City, is considering requiring adults to show proof of full vaccination to enter indoor restaurants, coffee shops, gyms, shopping centers, museums, movie theaters and hair and nail salons.

California's unemployment rate, traditionally higher than the nation's partly because of the state's reliance on tourism, leisure and hospitality, is expected to average 7.6% this year, 5.6% next year and 4.4% in 2023.

In 2019, before the coronavirus hit, Golden State joblessness had dropped to 4.2%.

For the U.S., the forecasters predict unemployment will fall from 5.6% this year to 4.4% next year and 3.7% in 2023, the same as in 2019.

As for complaints about labor shortages, U.S. businesses may be posting 11 million job openings and 8 million people may be unemployed nationwide, Feler said, but "sectors demanding work are different from sectors where people used to work. California may have openings in tech and engineering, but how does that help someone who worked in leisure and hospitality?"

Moreover, he said, "Being a restaurant server before wasn't a risky job. Now it is. And it is hard to go back to the labor force when your kid might be sent home from school and quarantined for 10 days. You need a job that's very flexible."

One bright spot in California is logistics. Asian imports are flooding through the giant ports of Los Angeles and Long Beach and spurring construction of distribution centers across the Inland Empire, buoyed by booming pandemic-related demand for such things as home gym equipment, electronics and furniture, as consumers spend on goods rather than travel, dining and movie tickets.

Golden State transportation, warehousing and utility jobs are forecast to grow at the highest rate of any sector this year: 5.4%, slightly above leisure and hospitality's 5.3%.

Meanwhile, shipping prices have skyrocketed, dozens of vessels are anchored off Southern California because of logistics bottlenecks, and many imported goods, including windows, semiconductors and automobiles, are in short supply — factors that contribute to inflation.

"Over the course of this past year, inflation has been higher and price levels have increased faster than at any time in the past 30 years," according to the UCLA forecast. Average prices won't come down, it predicts, but the inflation rate will slow from 4.1% year over year in the fourth quarter of this year to 2.7% the same quarter next year and 2.4% in the fourth quarter of 2023.

The pandemic-induced shift from spending on services to buying more goods is coinciding with COVID-related factory shutdowns in Vietnam, Thailand and other producers of U.S imports.

"We're in a moment of temporary shock," Feler said. "Even if the U.S. gets vaccinated, people in the rest of the world still aren't vaccinated — or they may have been inoculated with a less-effective vaccine.

"In a globalized economy, they produce our consumer goods. If they can't get back to work because of the pandemic, we won't get the products we want to buy — and that has economic repercussions."

The pandemic has disproportionately hit lower-income Californians, driving up inequality in the state, according to UCLA's forecast, which includes a section on Los Angeles, the nation's most populous county with 10 million residents. The city, with a service-and-tourism-dependent workforce, has been hit especially hard, according to the report by economist William Yu.

Cities with large tourism-based economies have the highest job losses, Yu reports. As of July, Los Angeles payrolls were down by 8.7% from the pre-pandemic level. But others were worse off, with New York, Honolulu, Las Vegas and Orlando, Fla., payrolls down about 10%.

Tax return data show a hollowing out of the middle class in both the U.S. and L.A., with only 23% of U.S. households and 21% of L.A.'s earning middle-class wages, which are defined as an adjusted gross income of $50,000 to $100,000 in 2018, Yu wrote.

More than a third of households in the U.S. and Los Angeles earn less than $25,000 a year.

Inequality is caused by factors including "technology change, globalization, the socioeconomic environment, governmental policies, and immigration," Yu wrote, but he suggested that inequality in education is the main driver of low wages and poverty.

"Less-educated workers are less likely to find a high-paying job," he said.

But many Southern California colleges rank among the highest in the nation in the percentage of students from the lowest income levels who reach the top 20% in income later in life, according to one recent study, Yu wrote.
HockeyDad Offline
#267 Posted:
Joined: 09-20-2000
Posts: 42,828
**** the hollowing out middle class, **** the disproportionately hit lower-income Californians, **** the less educated workers, **** LA, **** the LA Times, and **** the LA Dodgers. They had a chance to recall Gavin Newsom and end the state of emergency and they refused.

They now deserve what they get.
rfenst Offline
#268 Posted:
Joined: 06-23-2007
Posts: 36,329
Prices climb sharply as supply chain snarls linger

Federal officials say they expect wave of pandemic-related inflation to ease

The New York Times

The Federal Reserve’s preferred inflation gauge accelerated in August, keeping the pressure on economic policymakers who are watching warily as supply chain issues and commodity costs threaten to keep price gains elevated for longer than they had expected.

The Personal Consumption Expenditures index continued to climb at its fastest pace since 1991, rising 4.3% in the year through August. That beat out the prior month’s reading of 4.2%.

The monthly index also remained elevated, climbing 0.4% for a second straight month.

Inflation has surged thanks to pandemic-related problems, including shipping trouble as strong demand for goods from Asia and elsewhere has taxed freight routes and pushed transit costs higher.

Shortages in key parts have pushed up prices for everything from cars to washing machines. Officials at the Fed and in the White House have been clear that they expect those pressures to fade as the economy more fully reopens and business returns to normal.

A separate inflation index that is released earlier, the Consumer Price Index, did show some early signs of moderation in August, though it remained elevated, at 5.3%.

But the fresh data come as economists regard the horizon with apprehension. Factory shutdowns in Asia continue to ripple through the global supply chain. Commodity costs, including those for oil and gas, are rising. Rents are rebounding, threatening to push housing inflation — an important part of the overall price index — higher.

Officials at the Fed say that they still expect inflation to fade, but acknowledge that the process is taking longer than they had expected or hoped.

It is “frustrating to see the bottlenecks and supply chain problems not getting better — in fact, at the margin, apparently getting a little bit worse,” Jerome Powell, the Fed’s chair, said while speaking on a panel Wednesday.

Republicans have blamed the jump in prices on government spending. The acceleration has come in part because supply has not been able to adjust rapidly enough to meet the demand that huge amounts of pandemic-era stimulus helped to unleash.

The central bank has signaled it could announce a plan to dial back its big bond-buying program as soon as November, the first step in removing monetary policy support for the economy.

Bringing the bond-buying program to a close could leave the central bank more nimble, should it find that it needs to raise interest rates to control inflation next year.

Companies are also planning for the possibility that price pressures and supply chain disruptions will persist.
“We’re not expecting supply chain pressures to ease,” Mark J. Tritton, CEO of Bed Bath & Beyond, said during an earnings call Friday. He noted that the company is trying to adjust how it operates to deal with the issues, including by trying to carefully manage inventory.
RayR Offline
#269 Posted:
Joined: 07-20-2020
Posts: 5,140
See, the FED is already back-peddling on their transitory inflation story. They say it's taking longer than they had expected or hoped. Glare

Get Ready for Non-Transitory Inflation: Ten Things About to Shoot Up in Price

http://www.financialsurvivalnetwork.com/2021/09/get-ready-for-non-transitory-inflation-ten-things-about-to-shoot-up-in-price/

Inflation Confirmed at Highest Level in 40 Years

https://www.breitbart.com/economy/2021/09/30/inflation-confirmed-at-highest-level-in-40-years/
rfenst Offline
#270 Posted:
Joined: 06-23-2007
Posts: 36,329
Does the Fed Have the Will to Fight Inflation?

Real tightening could pose risks to the economy and, in turn, to the central bank’s independence.


WSJ Opinion

It has been said that more money has been lost in the search for yield than at the point of a gun. Those who have tried to bet against bonds since S&P downgraded America’s credit rating in 2011 have questioned the validity of that maxim as rates have broadly declined and bond prices have risen.

It might seem a mystery why investors would accept a negative real return on what is considered the closest thing in the world to a risk-free asset. The answer has a lot to do with the Federal Reserve’s continuing purchase of Treasury bonds, along with the $13 trillion in negative-yielding sovereign debt outstanding globally. In that context, the thinking goes, lending money to Uncle Sam for the next 10 years at 1.5% isn’t that bad a deal.

The Fed’s policy of quantitative easing injures middle-class savers. People without financial assets get kneecapped by the policy known as “financial repression”—purposefully attempting to pay for government spending by keeping interest rates below the rate of inflation. This policy has been a boon for the wealthy but a disaster for average people, who earn no return at all on their savings.

While the Fed has talked about slowing down the pace of its asset purchases (known colloquially as tapering), it is important to remember that it is still technically easing. This leads us to wonder whether the Fed can actually raise rates again without significant pain and major dislocations in the global economy.

The sheer size of financial assets today relative to the size of the economy suggests that the tail may be wagging the dog. Any significant decrease in the price of securities is likely to damage consumer confidence. A reported 56% of U.S. households hold common stocks either directly or through retirement accounts, and the correlation between confidence and stock prices has grown. Total financial assets in the U.S. now represent 565% of gross domestic product.

A great benefit of possessing the world’s reserve currency is that America can float its ever-expanding debt despite large and growing long-term liabilities. A remarkable 50.9% of U.S. sovereign debt matures in the next three years. The weighted average cost of America’s outstanding debt is only 1.38%. With more than $22 trillion of that debt owed to the public, relatively small changes in short-term interest rates could greatly increase the federal deficit.

Also contributing to the Fed’s difficulty in raising rates is a portfolio of responsibilities for which it is particularly ill-suited. Despite a questionable record in reaching its inflation targets, the Fed is now expected to use monetary policy to solve a variety of social and political ills, from climate change to racial injustice. With such things on its to-do list, can the Fed ever really justify tightening?

There is no doubt that the Fed has the tools to fight inflation if it chooses. But the question remains whether it has the political will—given the size of financial assets relative to the economy, the potential effects of tightening on the federal budget, and the Fed’s growing list of social responsibilities. Tapering may start by the end of the year, but real tightening could present risks to the economy and, in turn, the Fed’s independence. Policy makers seem increasingly convinced that there are few long-term costs to spending money we don’t have.



rfenst Offline
#271 Posted:
Joined: 06-23-2007
Posts: 36,329
OPEC Opts Against Big Output Boost, Pushing Oil Prices to Seven-Year High

Cartel and Russia-led group had previously said they would add about 400,000 barrels a day each month through next year

WSJ

OPEC and a Russia-led group of oil producers agreed to continue increasing production in measured steps, delegates said Monday, deciding against opening the taps more widely, and driving crude prices to their highest levels since 2014.

The decision sent oil prices sharply higher. West Texas Intermediate crude, the U.S. benchmark, rose 3% to $78.13. Brent, the international gauge, rose more than 3% to $81.77 a barrel. Rises in oil prices recently had some market watchers expecting OPEC and its Russia-led allies to lift production more significantly.

Instead, the Organization of the Petroleum Exporting Countries and Russia said the group, which calls itself OPEC+, would lift its collective output by 400,000 barrels a day in monthly installments, part of a previously agreed plan to return output to pre-Covid-19 levels.

Early last year, the two groups abandoned a price war that had weakened prices and cut back sharply on their combined output, as the coronavirus shut down economies and drove down demand for crude. As economies started to reopen, OPEC+ began returning that oil to the market. It more recently agreed to add about 400,000 a barrel a day of crude each month, seeking to return production to pre-Covid-19 levels by next year.

The rally in oil prices comes amid a backdrop of fast-returning demand. Economies have started humming again after near-hibernation during some of the worst periods of the pandemic. Natural-gas prices, too, have soared on higher demand and low inventories in the U.S. and Europe. High coal and gas prices and government efforts to cut electricity use have led to power cuts in China.

The shortages have contributed to high oil prices, analysts say. Some of the world’s gas-fired power plants can switch to using crude oil. While it is too early to say whether any have done so in any great number, markets have been pricing in a lift in crude demand.

Saudi Arabian Oil Co. has forecast that a temporary shift from natural gas to oil in some power generation could add 500,000 barrels a day of oil demand.

Meanwhile, U.S. frackers, which normally boost output when prices rise, have been reining in their spending instead. The lack of a U.S. bump in supplies so far means “control of pricing is very much in the hands of OPEC+,” said Mike Muller, the head of Asia for commodities trading giant Vitol, during a Sunday webinar hosted by Dubai-based consultancy Gulf Intelligence.

At a technical meeting last week to prepare for Monday’s gathering, OPEC economists told delegates that the group could face excess supply by the end of the year. A document prepared by the secretariat, seen by The Wall Street Journal, forecast that oil markets could be oversupplied as early as December.

Delegates said the meeting was a straightforward affair, compared with recent meetings of OPEC+ that have been more contentious. Earlier this year, the United Arab Emirates held up a decision for days, insisting it be allowed to pump more oil inside the group’s complex quota system.

Between meetings last year and earlier this year, delegates veered from optimism about the pace of recovery to pessimism over signs of slower growth. They became accustomed to watching Covid-19 case counts and vaccination rates, as well as global oil supply and demand data.

This time, delegates said, they coalesced around sticking with the group’s gradual plan to boost output. Saudi Arabia privately signaled to some delegates it is seeking higher prices now to make up for lost revenue last year, according to delegates.

Oil-export revenue in Saudi Arabia almost halved to $119 billion in 2020 compared to the previous year, according to OPEC’s statistical report issued last week.

The kingdom is also confident the global economy can cope with high prices amid the post-Covid recovery, and isn’t worried about U.S. shale producers taking advantage of higher prices. In the past, shale producers have quickly sprung into action, boosting output to take advantage of prices.

This time, Saudi Arabian officials believe, pressure from U.S. investors has kept many on the sidelines, according to delegates.

“The kingdom is comfortable with the current price range and feels it won’t weigh on demand for oil,” said a Saudi official.

Other OPEC members are simply unable to substantially boost output.

Angola, Algeria and Nigeria are pumping flat out and have struggled with underinvestment in their oil fields for years. They don’t have the cash to quickly add more capacity. Sanctions, meanwhile, have kept a lid on output from Iran and Venezuela.
HockeyDad Offline
#272 Posted:
Joined: 09-20-2000
Posts: 42,828
Everything will be fine once Biden is President.
zitotczito Offline
#273 Posted:
Joined: 08-21-2006
Posts: 6,386
Excellent, the higher the prices, the better. Maximum pain for the Biden voters.
rfenst Offline
#274 Posted:
Joined: 06-23-2007
Posts: 36,329
zitotczito wrote:
Excellent, the higher the prices, the better. Maximum pain for the Biden voters.

Rooting for doom again?
Abrignac Offline
#275 Posted:
Joined: 02-24-2012
Posts: 16,115
rfenst wrote:
Rooting for doom again?


Sounds more like frustration due to the left’s insanity.
RayR Offline
#276 Posted:
Joined: 07-20-2020
Posts: 5,140
Biden voters are sadomasochists, it's the only explanation that makes sense.
zitotczito Offline
#277 Posted:
Joined: 08-21-2006
Posts: 6,386
rfenst wrote:
Rooting for doom again?


Not rooting for doom, just hoping that the Biden voters reap the benefits of their decision. They wanted Biden's policies and I only want them to get what they wanted. I am actually rooting for the Biden voters here, the fact that there maybe negative results should not have been hard to foresee so why is anyone surprised. Now sometimes tough love is needed so people learn from their mistakes.
Abrignac Offline
#278 Posted:
Joined: 02-24-2012
Posts: 16,115
Biden was elected as an anti-Trump moderate. He beat big spenders Bernie Sanders and Elizabeth Warren to get the nomination. Now he’s championing not what got him elected, but a huge expansion of welfare. Why the Democrats have Sanders as chairman of the Senate Budget Committee is the $6T question. I predict a Republican wave in the mid terms.
HockeyDad Offline
#279 Posted:
Joined: 09-20-2000
Posts: 42,828
rfenst wrote:
Rooting for doom again?


Elections have consequences.

Inflation is a regressive pay cut that hits everyone. Thanks Democrats for punishing your voters once again.
ZRX1200 Offline
#280 Posted:
Joined: 07-08-2007
Posts: 56,905
It’s their business model, you have to ruin things then tell people you need more power to make things better.
RayR Offline
#281 Posted:
Joined: 07-20-2020
Posts: 5,140
ZRX1200 wrote:
It’s their business model, you have to ruin things then tell people you need more power to make things better.


Yes, that's how gubment creates its own demand. You'd think the people would have awoken by now to this monopolistic practice to keep them enslaved in this cycle. No matter how many times they get spanked, they always respond with "Thank you, sir, may I have another"Spanking
rfenst Offline
#282 Posted:
Joined: 06-23-2007
Posts: 36,329
RayR wrote:
Yes, that's how gubment creates its own demand. You'd think the people would have awoken by now to this monopolistic practice to keep them enslaved in this cycle. No matter how many times they get spanked, they always respond with "Thank you, sir, may I have another"Spanking

So, tell us, how do you avoid reality so well.
RayR Offline
#283 Posted:
Joined: 07-20-2020
Posts: 5,140
rfenst wrote:
So, tell us, how do you avoid reality so well.


"avoid reality"? That makes no sense.
I just stated the reality that many people avoid, like you?
rfenst Offline
#284 Posted:
Joined: 06-23-2007
Posts: 36,329
A Scary Energy Winter Is Coming. Don’t Blame the Greens.

By Thomas L. Friedman
NYT Opinion Columnist

Every so often the tectonic geopolitical plates that hold up the world economy suddenly shift in ways that can rattle and destabilize everything on the surface. That’s happening right now in the energy sphere.

Several forces are coming together that could make Vladimir Putin the king of Europe, enable Iran to thumb its nose at America and build an atomic bomb, and disrupt European power markets enough that the upcoming U.N. climate conference in Glasgow could suffer blackouts owing to too little clean energy.

Yes, this is a big one.

Natural gas and coal prices in Europe and Asia just hit their highest levels on record, oil prices in America hit a seven-year high and U.S. gasoline prices are up $1 a gallon from last year. If this winter is as bad as some experts predict — with some in the poor and middle classes unable to heat their homes — I fear we’ll see a populist backlash to the whole climate/green movement. You can already smell that coming in Britain.

I am a fan of the financial newsletter Blain’s Morning Porridge, written by a smart, irreverent market strategist in London, Bill Blain. Last Thursday he bluntly summed up the energy situation for the U.K. and Europe this way:

This winter — people are going to die of cold. As the price of energy goes higher, the costs will fall disproportionately upon the poorest in society. Income inequalities will be dramatically exposed as the most vulnerable in society face a stark choice: heat or eat. … This winter the U.K. is likely to be on its knees, begging energy from wherever it’s available. Europe will be in as much trouble. The Middle East will be charging whatever they can get away with, and the capacity to deliver is limited. … And Vladimir Putin can’t wait. … He will invite each European leader to plead their case individually, menacingly asking each leader why he should open the gas taps to their nation specifically. … Make no mistake, this winter is going to be shocking. Be aware.


How did we get here? In truth, it’s a good-news-bad-news story.

The good news is that every major economy has signed onto reducing its carbon footprint by phasing out dirtier fuels like coal to heat homes and to power industries. The bad news is that most nations are doing it in totally uncoordinated ways, from the top down, and before the market has produced sufficient clean renewables like wind, solar and hydro.

If you don’t have enough renewables but you want to go green, the next best thing is natural gas, which emits about half as much C0₂ as coal (as long as methane is not released in the extraction process). But there is not enough of this transition fuel to go around. So, everyone is scrambling to get more, which is why the European Union’s biggest pipeline gas supplier — Russia — is now in the catbird seat and prices are skyrocketing along with blackouts.

As Bloomberg Businessweek reported on Sept. 27, when it comes to natural gas, “inventories at European storage facilities are at historically low levels for this time of year. Pipeline flows from Russia and Norway have been limited. That’s worrying as calmer weather has reduced output from wind turbines, while Europe’s aging nuclear plants are being phased out or are more prone to outages — making gas even more necessary. No wonder European gas prices surged by almost 500 percent in the past year and are trading near record.”

But it’s not just Europe. This energy crunch could pinch ceramics, steel, aluminum, glass and cement suppliers in China, the story added, while it presents households in Brazil with eye-popping power bills because low river water flows have slashed hydropower output. And pandemic-related supply chain problems for coal are making the problem worse.


But how did the bad-news side of this story emerge so fast?

Blame Covid-19. First, the pandemic erupted and signaled to every major economy that we were headed for a deep recession. This sent prices of all kinds of commodities, including oil and gas, into downward spirals.

This, in turn, led banks to choke off investment in new natural gas capacity and crude wells after seven years of already declining investments in these hydrocarbons because of lousy returns.


But the economy snapped back — thanks to government stimulus programs — far faster than anticipated. And so, too, did demand for energy. But this industry does not ramp up quickly. So, there was not enough natural gas, let alone renewables, to fill in the gap.

America has enough oil and natural gas to meet its own needs for now, but its ability to export liquefied natural gas to help others is limited, especially when every utility in Europe and Asia is trying to meet newly minted environmental, social and governance standards for clean energy and therefore is desperate to import natural gas.[/b]

When every country jumps in at once, the price goes crazy. Or the lights go out.

Don’t get me wrong. I am as green as ever. But I’m not a nice green. I am a mean green. Achieving the scale of clean energy that we need requires not only wind, solar and hydro, but also a carbon tax in every major industrial economy, nuclear power and natural gas as a bridge. If you oppose all those, you’re not serious about what scientists tell us needs to be done right now — put in place enough noncarbon-emitting fuels to manage the destructive aspects of climate change that have become unavoidable, so we can avoid those that would be unmanageable.

Sadly, in an overreaction to the ****ushima nuclear accident, Germany decided in 2011 to phase out all of its nuclear power by 2022 — nuclear power stations that in the year 2000 generated 29.5 percent of Germany’s power generation mix. All of that has to be replaced by wind, solar, hydro and natural gas, and there is just not enough now.

As Bill Gates points out in his smart book “How to Avoid a Climate Disaster,” the only way to reach our climate targets is to shift production of all the big heavy industries, like steel, cement and automobiles, as well as how we heat our homes and power our cars, to electricity generated from clean energy. Safe and affordable nuclear power has to be part of our mix because, Gates argues, “it is the only carbon-free, scalable energy source that’s available 24 hours a day.”

Meanwhile, though, this energy crisis is coinciding with the stalemate in the talks between the U.S. and Iran about restoring the nuclear deal that Donald Trump recklessly tore up in 2018 — without any alternative plan to curb Iran’s nuclear program. To pressure us, Iran has resumed enriching uranium to levels such that U.S. officials now believe it could be only a few months, or less, away from having enough fissile material for a single bomb.

It would take much longer for Iran to build a warhead and delivery system, but some U.S. officials believe that Iran just wants to make itself a threshold nuclear power, like Japan, where it would stay just a few turns of the screw away from actually having a bomb. This would give it all the deterrence it needs. Both Israel and America have vowed not to let Iran get that close to the doorstep of a nuclear weapon. Alas, we are entering crunchtime.

But what if the U.S. or Israel feels it has to strike Iran’s nuclear program in the middle of what could be the worst energy winter since 1973? And what if Iran responds by firing at U.S. or Western oil tankers in the Persian Gulf, where Qatar, the world’s largest exporter of liquefied natural gas, resides? Oil and gas prices will go into the stratosphere. So, Iran suddenly has new leverage: Hit us and you bankrupt the world.

If I can figure that out, the Iranians can.

Little darling — it’s gonna be a long, cold, crazy winter.
bgz Offline
#285 Posted:
Joined: 07-29-2014
Posts: 12,006
RayR wrote:
"avoid reality"? That makes no sense.
I just stated the reality that many people avoid, like you?


You sound broke.

Life land you lemons?

You sure did make a sour p*ss out of them.
RayR Offline
#286 Posted:
Joined: 07-20-2020
Posts: 5,140
bgz wrote:
You sound broke.

Life land you lemons?

You sure did make a sour p*ss out of them.


You are a terrible troll 👺. You really need to step up your game.
bgz Offline
#287 Posted:
Joined: 07-29-2014
Posts: 12,006
Ok emoji boy
Smooth light Offline
#288 Posted:
Joined: 06-26-2020
Posts: 3,598
Now we can work at night, because of nuclear after-glow. Thats 'climate change' I can believe in. 🤣
tonygraz Offline
#289 Posted:
Joined: 08-11-2008
Posts: 18,026
Let's not forget about the National Debt and how it got to 28.8 trillion $. When Fox blame the democrats, remind them that Mitch McCon has voted to raise the debt limit 32 times for a total of 20.7 trillion $ or 72% of the total debt and he's not done yet. He raised the debt 3 times during the trump administration.
RayR Offline
#290 Posted:
Joined: 07-20-2020
Posts: 5,140
WHATABOUTMITCH. this time! Very good Tony, Mitch is a right-wing progtard, I agree.
rfenst Offline
#291 Posted:
Joined: 06-23-2007
Posts: 36,329
How the Fed Finances U.S. Debt

Look behind the federal books to see the ways monetary policy has come to abet runaway spending.

WSJ Opinion

Last week’s deal in Congress to raise the debt ceiling through early December may offer another few weeks of partisan wrangling, but it won’t solve the deeper problems of funding the government. Such is the sorry state of America’s hand-to-mouth finances that White House officials have launched apocalyptic warnings about imminent financial collapse, along with hallowed invocations to preserve the full faith and credit of U.S. Treasury debt.

The White House Council of Economic Advisers, run by Cecilia Rouse, said: “If the United States were to default, tens of millions—including families with children, retirees, and veterans—would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet.” Defense Secretary Lloyd Austin declared: “If the United States defaults, it would undermine the economic strength on which our national security rests.”

With so much at stake, no wonder the White House was reported to be seriously considering a plan by which the Treasury would mint a $1 trillion platinum coin, deposit it at the Federal Reserve, and then continue paying bills as normal.

But Treasury Secretary Janet Yellen nixed the idea. “It’s really a gimmick,” she said. The platinum coin “is equivalent to asking the Federal Reserve to print money to cover deficits that Congress is unwilling to cover by issuing debt. It compromises the independence of the Fed, conflating monetary and fiscal policy.”

This worry about mixing the central bank and the budget was ironic, given the cross-pollination that already exists. In the past two years alone, the Fed acquired more than $3.3 trillion of Treasury debt—which equates to more than half of the combined federal budget deficits for 2020 and 2021.

Moreover, the Fed takes the interest payments received on its portfolio holdings of Treasury securities and other U.S. government-backed securities and sends the vast bulk of that income as revenues to Treasury. The Fed’s “remittances” to Treasury totaled $87 billion in 2020—some 85% of the Fed’s $102 billion annual interest income. Remittances to Treasury are running even higher this year, based on the Fed’s June 2021 quarterly report, and will likely exceed $100 billion. How’s that for a gimmick?

Those numbers are significant in the debate over whether the U.S. government might default. Consider that $6.3 trillion of the $28.4 trillion in total public debt is Treasury debt issued to federal trust funds and other government accounts. The interest paid on those securities is treated as an “intragovernmental” transaction that has no effect on the budget deficit. The payments and receipts are both recorded in the same category of spending in the federal budget.

It is the cost of financing the remaining $22.1 trillion in federal debt held by the public—of which the Federal Reserve holds $5.4 trillion—that bears on the size of the federal budget deficit. Given that the Congressional Budget Office estimates net interest expense at $413 billion this year, the remittances transferred to Treasury by the Fed have a significant effect, offsetting the government’s interest expense (i.e., its net interest outlay) by some 25% or more.

In short, with the Fed owning roughly one-quarter of the federal debt held by the public on which the Treasury must pay interest—and with the Fed’s practice of sending weekly remittances to Treasury—it’s clear that monetary and fiscal policy are conflated.

There’s a further complication: If the Federal Reserve were to raise the interest rate it pays on the $4.1 trillion in reserve balances held by commercial banks and other savings institutions in Fed depository accounts above its current level of 0.15%, the additional interest expense (including interest paid to foreign banks) would be deducted from Fed remittances to Treasury.

So it rings a bit hollow for Ms. Yellen to intone about the dangers of compromising the independence of the Fed. And it also seems disingenuous to conflate the requirement to make interest and principal payments on U.S. government debt with some larger notion about “paying America’s bills.”

During the 2011 budget standoff, Federal Reserve and Treasury officials privately crafted a plan to make on-time payments on Treasury debt and delay paying other government bills if the Obama administration and Congress failed to raise the debt ceiling. Fed transcripts show that the central bank, acting as Treasury’s fiscal agent, was prepared to make principal and approaching coupon payments the priority, holding back other government payments as necessary. Ms. Yellen was the Fed’s vice chair at the time.

Even as Democrats attempt to define choosing priorities as equivalent to defaulting on Treasury debt, Republicans have introduced legislation (Full Faith and Credit Act) that would require certain payments—for debt service, military pay, Social Security, Medicare and veteran benefits—to take precedence over all other obligations. “Washington’s reckless spending is completely out of control,” Sen. Rick Scott (R., Fla.), who is leading the effort, has said. “Too many in Washington have accepted deficit spending, blank checks, tax hikes and skyrocketing inflation as the status quo.”

Before the debt crisis reaches its next crescendo, it’s worth scrutinizing the sleight-of-hand financial arrangements and dodgy accounting principles that foster confusion and hysteria as Treasury bumps up against the federal borrowing limit.
Abrignac Offline
#292 Posted:
Joined: 02-24-2012
Posts: 16,115
tonygraz wrote:
Let's not forget about the National Debt and how it got to 28.8 trillion $. When Fox blame the democrats, remind them that Mitch McCon has voted to raise the debt limit 32 times for a total of 20.7 trillion $ or 72% of the total debt and he's not done yet. He raised the debt 3 times during the trump administration.


Who else has voted to raise the debt limit? You do realize it takes more than one vote. On the other hand, shut up since you’re incapable of composing an intelligent post.
RayR Offline
#293 Posted:
Joined: 07-20-2020
Posts: 5,140
Even CNN reporter Jake Tapper is questioning the economic geniuses in the Biden administration and pouring on some heat.

Psaki Explains Inflation’s a Good Thing, a ‘High Class Problem’– Good to Know

https://www.independentsentinel.com/psaki-explains-inflations-a-good-thing-a-high-class-problem-good-to-know/



rfenst Offline
#294 Posted:
Joined: 06-23-2007
Posts: 36,329
Food shortages are the next supply chain crunch

Bloomberg News

In Denver, public-school children are facing shortages of milk. In Chicago, a local market is running short of canned goods and boxed items.

But there’s plenty of food. There just isn’t always enough processing and transportation capacity to meet rising demand as the economy revs up.

More than a year and a half after the coronavirus pandemic upended daily life, the supply of basic goods at U.S. grocery stores and restaurants is once again falling victim to intermittent shortages and delays.

“I never imagined that we’d be here in October 2021 talking about supply-chain problems, but it’s a reality,” said Vivek Sankaran, chief executive officer of Albertsons Cos., who echoed the laments of other retailers. “Any given day, you’re going to have something missing in our stores, and it’s across categories.”

‘Whack-A-Mole’
In Denver, broken parts at the milk supplier’s plant affected shipments of half-pint cartons, on top of disruptions at one time or another in cereal, tortillas and juice.

“We’ve been struggling with supply-chain issues with different items since school started,” said Theresa Hafner, the executive director of food services at Denver Public Schools. “It just continues to pop up. It’s like playing whack-a-mole.”
In Chicago, Dill Pickle Food Co-Op ran out of certain dry goods because its two main distributors haven’t been sending orders in full in recent weeks.

“Early in the pandemic, panic buying was the cause of many of the out-of-stock situations that grocers experienced,” general manager I’Talia McCarthy said in an email to store owners this month. “Although the food industry was able to somewhat rebound, the sustained nature of the pandemic, combined with the slow pace of vaccination globally and the recent surge caused by the delta variant, have resurfaced the problem.”

The shortages aren’t as acute as they were earlier in the pandemic. At supermarkets, on-shelf availability has stabilized since dropping drastically in November last year, according to data from NielsenIQ.

Still, one key metric is trending down a bit. The total on-shelf-availability rate was 94.6% in September, a decrease from 95.2% in August. That means that 94.6% of expected revenue was generated last month, NielsenIQ says.

Price pressure
Many food suppliers are planning for these hiccups and shortages to last.

Saffron Road, a producer of frozen and shelf-stable meals, is holding extra inventory, keeping about four months of supply on hand instead of the typical one or two months.

“People are hoarding,” said CEO and founder Adnan Durrani. “What I think you’ll see over the next six months, all prices will go higher.”

A&W Restaurants earlier this year had to cancel a marketing deal for chicken tenders when its supplier couldn’t get extra stock of poultry. Instead, the chain, which has about 560 locations domestically, went with chili-cheese fries.

“Rather than running short, we replaced the promotion with something we could get,” said CEO Kevin Bazner. Supplies are improving, he said, but the chain is still only getting about 80% of what it orders, he said.

Not enough styrofoam
Food producers complain of supply-chain headaches of their own.
Land O’Lakes Inc., one of the biggest U.S. farm cooperatives, said its members are producing abundant amounts of milk at their dairies.

“The challenges in the supply chain continue to be issues such as driver shortages, labor and congestion at the ports,” Chief Supply Chain Officer Yone Dewberry said in an email.

Meat processors tell a similar tale. Earlier this month, one pork supplier couldn’t get products out because there weren’t enough Styrofoam trays, said Steve Meyer, a consulting economist for the National Pork Producers Council.

Labor issues are also roiling the meat supply. Plants are running but not at full capacity due to a lack of workers and truckers, Meyer said. The problem is so bad that at least one U.S. meatpacker has tried to lure new employees with Apple Watches.

In most cases, animals are being harvested but there aren’t enough people to handle normal value-added processes such as boning, trimming and curing. That may make it harder for grocery-store customers to find such high-value products as boneless hams.

Said Meyer, “You name it, it’s going wrong somewhere.”
HockeyDad Offline
#295 Posted:
Joined: 09-20-2000
Posts: 42,828
Food shortages are a normal feature of socialism. You spoiled Americans need to lower your expectations.
rfenst Offline
#296 Posted:
Joined: 06-23-2007
Posts: 36,329
HockeyDad wrote:
Food shortages are a normal feature of socialism. You spoiled Americans need to lower your expectations.

So supply-chain problems = socialism?
Brewha Offline
#297 Posted:
Joined: 01-25-2010
Posts: 10,416
HockeyDad wrote:
Food shortages are a normal feature of socialism. You spoiled Americans need to lower your expectations.

Wow, how did jealousy of being American become so common?
rfenst Offline
#298 Posted:
Joined: 06-23-2007
Posts: 36,329
Opinion: The Fed’s inflation machine: What would Volcker do?

Opinion by Robert J. Samuelson
Former WAPO columnist

Robert J. Samuelson wrote a twice-weekly economics column for The Post before retiring in September 2020.

We have an inflation problem. Jerome H. Powell, chair of the Federal Reserve Board, has admitted as much. Various causes are typically blamed: crippled supply chains; shortages of computer chips; workers waiting for better-paid or more satisfying jobs; labor strikes; the side effects of the pandemic. All these scarcities put upward pressure on wages and prices. But there’s another, astonishing explanation for today’s inflation: the Fed itself.

Go back 25 years. The notion that the Fed would deliberately prop up stocks was considered absurd and unthinkable. Now it’s a routine practice. Since 2012, the Fed has poured roughly $4 trillion into financial markets for stocks, bonds and other financial instruments.

The justification for flooding financial markets with so much money (“liquidity” in financial speak) is that the Fed needs to prolong the economic recovery. The danger is that too much stimulus becomes destabilizing. It feeds inflation and favors speculative risk-taking, including fraud.

Economists debate whether we have reached that crossover point. In my view, we have. Lawrence H. Summers, a treasury secretary under President Bill Clinton, warns of higher inflation. The amounts are huge. The monthly infusions are $120 billion, consisting of $80 billion of U.S. Treasury securities and $40 billion in “agency securities,” mostly mortgages.

The Fed is “in denial about the inflationary forces now building in the U.S. economy,” including a worldwide “asset price and credit market bubble,” writes economist Desmond Lachman of the American Enterprise Institute. Consider bitcoin, the crypto currency. Since May 2020, its price has soared from around $10,000 to $60,000 now. This looks mostly like financial speculation to me.

Meanwhile, the consumer price index (CPI), the government’s most visible inflation indicator, rose a meager 1.4 percent in 2020. From 2011 to 2020, annual CPI gains averaged 1.8 percent. Given imperfect economic statistics, this is probably as close to price stability as we’re going to get. The latest CPI reading was 5.4 percent.

As I have written before, the defeat of double-digit inflation (from 13 percent in 1980 to 1 percent in 1986) was a triumph of economic policy. It was the doing mainly of Paul Volcker, then chairman of the Fed, and President Ronald Reagan. Volcker imposed a ferocious credit squeeze, and Reagan supported this wildly unpopular policy. Short-term interest rates peaked at 21 percent. Monthly unemployment topped 10 percent. Bankruptcies — business and personal — multiplied. The triumph over inflation was bought at a huge personal and social cost.

We should take our cues from Volcker. What would he say today? It’s impossible to know for certain, because he died in 2019. But there is powerful evidence that he would be appalled at the Fed’s casual treatment of inflation. In 2004, Volcker was asked: What was the most important legacy of the Great Inflation? His letter in response was blunt:

Don’t let inflation get ingrained. Once that happens, there’s too much agony in stopping the momentum. That’s the lesson of central banking all over the world.

I put great stock in this, because Volcker made a point of sending me a copy of the letter after my interview with him for my book “The Great Inflation and Its Aftermath: The Past and Future of American Affluence.”

The standard way to contain inflation is to slow economic growth and spending, usually by having the Fed raise interest rates and Congress boost taxes or cut spending. These measures relieve wage and price pressures. But they might also raise unemployment, reduce profits and cause stocks to drop.

We ought to fear inflation, not pamper it. Summers argues that it’s time for the Fed to slow the flood of money going into financial markets by “tapering” — that is, reducing — the monthly allocation of bonds. The Fed has committed itself to “tapering,” but so far, its commitment is all talk and no action.

We should emulate Volcker by smothering inflationary psychology before it spreads throughout the economy. Yes, it’s true that, no matter what the Fed does, it will almost certainly be criticized. It’s in a trap of its own making. If it eases credit, it might invite inflation. If it tightens credit, it might flirt with recession.

All this might temporarily lower the rate of economic growth, but the benefits of relatively stable prices lie mostly in the long term — and they transcend economics.

Stable prices make it easier for people to plan for the future. The absence of stable prices contributes to uncertainty and undermines confidence in government. We should have learned this in the 1960s and 1970s. Let’s not forget the lessons of adversity.
HockeyDad Offline
#299 Posted:
Joined: 09-20-2000
Posts: 42,828
rfenst wrote:
So supply-chain problems = socialism?


Supply chain problems are because demand is up because income is up because the president has successfully guided this economy out of the teeth of a terrifying recession.
HockeyDad Offline
#300 Posted:
Joined: 09-20-2000
Posts: 42,828
Brewha wrote:
Wow, how did jealousy of being American become so common?


The Washington Post was ripped Tuesday after publishing a piece calling on "spoiled" Americans to stop ranting about short-staffed businesses and supply chain issues, and instead lower their expectations in the hope that things will get straightened out.

"Time for some new, more realistic expectations," columnist Micheline Maynard wrote after describing how Americans were used to fast service and easy access to consumer products until the coronavirus pandemic disrupted the supply chain. "American consumers, their expectations pampered and catered to for decades, are not accustomed to inconvenience."
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