Money printing and inflation

[Frostbit]

M2 = amount of money printed

CPI = inflation

C-19 was used as the excuse to print an enormous amount of money in a short time. Is that "Putin's Price Hike"?

Screen Shot 2022-06-15 at 9.57.44 AM.png

[Adam]

Is there a link on that? Because I'd like to look at the figures and dates.

I was saying well before bat meat cooties arrived on our shores that Trump needed to get spending under control. Now, it's at least somewhat understandable to spend more when we were "flattening the curve," but obviously that went on far longer than it should have.

Trump was already running the printing presses at balls-to-the-walls speed*; Biden added a turbocharger, a blower, and nitrous. Both were bad, but I believe that Trump kicked a touch-back, and then, in Gump-esque fashion, Biden ran for the endzone, through the locker room, out the tunnel, through the parking lot, and across several counties, and shows little sign of slowing down.



*Handy note: the phrase "balls to the walls" does not mean what many people's minds race to (no pun intended). In later-iteration steam engines, heavy brass balls were attached to (usually) the final rotator (such as the drive arms on steam locomotives) via a swing-arm, and then surrounded by a steel cylinder, or "wall." This served as a speed governor so that a steam engine couldn't over-rev and tear up bearings and the like, as well as keeping steam at a relatively constant pressure, so as to not have a boiler explosion. So, if you were on, say, a paddleboat running "balls to the walls," it meant that you were running as fast as your steam engine could possibly allow. That phrase has since come to mean "maximum effort," essentially, with the advent of the internal combustion engine and things like rev limiters. But it actually does not have the sexual overtones that many believe that it does.

[Newman]

*Handy note: the phrase "balls to the walls" does not mean what many people's minds race to (no pun intended). In later-iteration steam engines, heavy brass balls were attached to (usually) the final rotator (such as the drive arms on steam locomotives) via a swing-arm, and then surrounded by a steel cylinder, or "wall." This served as a speed governor so that a steam engine couldn't over-rev and tear up bearings and the like, as well as keeping steam at a relatively constant pressure, so as to not have a boiler explosion. So, if you were on, say, a paddleboat running "balls to the walls," it meant that you were running as fast as your steam engine could possibly allow. That phrase has since come to mean "maximum effort," essentially, with the advent of the internal combustion engine and things like rev limiters. But it actually does not have the sexual overtones that many believe that it does.

I love that kind of stuff. Many expressions live past their original circumstances, such as "flash in the pan," which had to do with a flintlock fizzling.

So I wonder what kids think "you sound like a broken record" is based on.

[Newman]

Is there a link on that? Because I'd like to look at the figures and dates.

I was saying well before bat meat cooties arrived on our shores that Trump needed to get spending under control. Now, it's at least somewhat understandable to spend more when we were "flattening the curve," but obviously that went on far longer than it should have.

Trump was already running the printing presses at balls-to-the-walls speed*; Biden added a turbocharger, a blower, and nitrous. Both were bad, but I believe that Trump kicked a touch-back, and then, in Gump-esque fashion, Biden ran for the endzone, through the locker room, out the tunnel, through the parking lot, and across several counties, and shows little sign of slowing down.

A glance at that M2 graph makes Trump's spendthrift ways look relatively Scrooge-like compared to the Democratic gusher.

And the inflation goblin has paid attention.

Consumer Price Index Summary - 2022 M06 Results (bls.gov)

CONSUMER PRICE INDEX - JUNE 2022 The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a seasonally adjusted basis after rising 1.0 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 9.1 percent before seasonal adjustment.

The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors. The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 percent and the other major component indexes also rising. The food index rose 1.0 percent in June, as did the food at home index.

The index for all items less food and energy rose 0.7 percent in June, after increasing 0.6 percent in the preceding two months. While almost all major component indexes increased over the month, the largest contributors were the indexes for shelter, used cars and trucks, medical care, motor vehicle insurance, and new vehicles. The indexes for motor vehicle repair, apparel, household furnishings and operations, and recreation also increased in June. Among the few major component indexes to decline in June were lodging away from home and airline fares.

The all items index increased 9.1 percent for the 12 months ending June, the largest 12-month increase since the period ending November 1981. The all items less food and energy index rose 5.9 percent over the last 12 months. The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980. The food index increased 10.4 percent for the 12-months ending June, the largest 12-month increase since the period ending February 1981.

Most reporting is simply a user-friendly rewrite of the BLS stuff, e.g.,

Inflation Hits 9.1 Percent in June, New 40-Year High (theepochtimes.com)

The U.S. annual inflation rate climbed to 9.1 percent in June, reaching its highest level since November 1981 and topping the market estimate of 8.8 percent and May’s annual rate of 8.6 percent.

According to the Bureau of Labor Statistics (BLS), the consumer price index (CPI) rose by 1.3 percent month-over-month. The monthly inflation also was higher than economists’ expectations of 1.1 percent.

While the core inflation rate, which removes the volatile food and energy sectors, eased to 5.9 percent, that was higher than the forecast of 5.7 percent. On a monthly basis, core inflation rose at a higher-than-expected pace of 0.7 percent.

Food prices soared by 10.4 percent, while the energy index advanced by 41.6 percent.

Nearly every food item, except uncooked beef steak, was more expensive last month. . . .

although one liberal media source I've lost suggested inflation "could be peaking."

This is dangerous territory, and the progressives show no sign of slowing up. They still support high gasoline prices as a lever to "convert" to magic energy. They still trot out scapegoats to account for consumer headaches.

I believe their obstinateness is fueling conspiracy theories going around about depopulation efforts and world government (dictatorship) plans.

This rate of inflation destroys nest eggs and old age security long before the oldsters (or near-retirees) had expected. It crushes the ambitions of people starting out, hanging on a thread.

It conveniently pares down the national debt—amounting to a regressive tax on wealth—but if there's a silver lining, it looks to be stiffening the resistance to further madness.

Joe Manchin calls Biden's plans 'more fuel' to inflation fire (nypost.com)

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Game off? Manchin declares inflation "a clear and present danger to our economy" – HotAir

This Hot Air piece (Ed Morrissey) goes into considerable detail about the horse-trading in progress and the prospects for some sort of sausage oozing through "reconciliation."

Interesting times. Living through them will be a challenge.

[Lady Marva]

And the inflation goblin has paid attention.



Interesting times. Living through them will be a challenge.

Things that go up in price will be unlikely to come down. Hoarding maybe?
Definitely buy as much toilet paper as there is space to store it.

[Adam]

Things that go up in price will be unlikely to come down. Hoarding maybe?
Definitely buy as much toilet paper as there is space to store it.

It's not really hoarding that's at issue, though you're essentially advocating for that when you suggest the people back up a box truck to Wal-Mart and take all of the Charmin that they have.

The real problem is that this administration is too-much encased in their own Beltway Bubble to recognize that some things do fluctuate over time (e.g. gas prices), but a lot of things don't (eggs, milk, cheese, chicken, beef, cars, furniture, etc.) and some things wind up with their own bubble: we're literally watching the housing market bubble burst in front of our eyes. As I've said before: one day the cost of gas may come down, but your grocery bill will remain the same based simply on the sheer fact that there are more dollars in circulation. Once they're out there (usually in the form of bonds), it's very difficult to try to draw them back in and get a handle on just how much we have in circulation.

[scott]

It's not really hoarding that's at issue, though you're essentially advocating for that when you suggest the people back up a box truck to Wal-Mart and take all of the Charmin that they have.

The real problem is that this administration is too-much encased in their own Beltway Bubble to recognize that some things do fluctuate over time (e.g. gas prices), but a lot of things don't (eggs, milk, cheese, chicken, beef, cars, furniture, etc.) and some things wind up with their own bubble: we're literally watching the housing market bubble burst in front of our eyes. As I've said before: one day the cost of gas may come down, but your grocery bill will remain the same based simply on the sheer fact that there are more dollars in circulation. Once they're out there (usually in the form of bonds), it's very difficult to try to draw them back in and get a handle on just how much we have in circulation.

Especially because staples are very inelastic. Once people get used to paying elevated prices for them they tend to keep paying those prices without some major disruption in the market. That said, while prices might not go down much at the cash register, the prices will come down in inflation adjusted dollars.

Take a look at milk:

milk 1995-2021.png

https://www.usinflationcalculator.com/inflation/milk-prices-adjusted-for-inflation/

[Newman]

"Hoarding" is more often a j'accuse moment, framing one scapegoat or another.