Conquer Club

"And I was on the New Jersey Turnpike, and I went through rest stops. And I noticed little things that were off," Cole says. Stores had spotty hours. Napkin, utensil and condiment dispensers were empty. Fast-food restaurants weren't fast. He could see Help Wanted signs everywhere. "The rest stops were struggling to keep up the same level of service that they had before."

On his way back from Vermont, he stayed at a hotel in Poughkeepsie, N.Y. The morning after his stay, he woke up to a "sad and pitiful" breakfast that consisted of a plastic-wrapped, mass-produced pastry, prepackaged Raisin Bran and lukewarm milk. The hotel was now skimping on its hot-breakfast buffet as well as maid service for guests who stayed for more than one night. This, Cole realized, was happening across the entire economy — and he began to think the government wasn't fully capturing the decline of quality in official statistics.

Cole was formerly a senior economist at the Joint Economic Committee of the U.S. Congress, where he used to advise Sen. Mike Lee, R-Utah, and write official economic reports. These days he's a writer at Full Stack Economics. For most of his economics career, he says, he had believed that official government statistics actually made inflation seem worse than it really was. He had thought they didn't fully capture improvements in the quality of products and services when quantifying changes in prices.

For example, a couple of decades ago, you had to fork over a lot of money to buy physical albums if you were a music lover. Now you can use Spotify and listen to basically every album ever recorded in history for free or a low monthly fee. Some products, like electric skateboards, didn't even exist in the recent past. The government tries to capture such innovations and product improvements with a process called "hedonic quality adjustment."

But Cole believed that the government, while accounting for quality improvements, still failed to capture how much better products and services were getting. He didn't believe it was some sort of Illuminati conspiracy of Satan-worshipping pedophiles juicing the statistics. It's just super-hard to systematically account for changes in quality when measuring changes in prices. How do you gauge the priceless improvements to our lives brought about by things like Google's search algorithm, the Onewheel electric skateboard or baguette slippers?

Mismeasuring inflation has important implications. For example, it's common to hear people argue that the real, or inflation-adjusted, wage of the typical American worker has stagnated in recent decades. But if the government has been overstating inflation in its statistics, this means American workers' paychecks actually go further and living standards have gotten better than official statistics say.

Manchin, however, argued that he had been clear about supporting changes to the tax code and wanting work requirements on benefits included in the bill.

“Since the beginning of this reconciliation debate, I have been consistent in my belief that any expansion of social programs must be targeted to those in need, not expanded beyond what is fiscally possible,” he said.

“Our tax code should be reformed to fix the flaws of the 2017 tax bill and ensure everyone pays their fair share but it should not weaken our global competitiveness or the ability of millions of small businesses to compete with the Amazons of the world,” he added.

Chaos isn’t a bad way to describe her impact in Washington right now; she’s not only holding up her own party’s biggest national priority, but she’s famously unclear about her reasons why. Joe Manchin (W.Va.), the other most-intransigent Democrat, can’t stop talking about his motives. Sinema isn’t even calling her friends. She’s rocketed into the national zeitgeist as an enigma, one of the least understood politicians in Washington.

jusplay4fun wrote:Thanks, stooopid liberal Democrats..

jusplay4fun wrote:Take a course in and remember basic economics; maybe learning this by owning and running a business will help.

Dukasaur wrote:

jusplay4fun wrote:Thanks, stooopid liberal Democrats..

It's funny how you're the first one to complain when people substitute name-calling for argument, but you're not afraid to do it yourself.

jusplay4fun wrote:Take a course in and remember basic economics; maybe learning this by owning and running a business will help.

Does it occur to you that maybe people know basic economics quite well?

Nobody is unaware that with big spending projects there is a probability of inflation. Perhaps you may ponder that people are aware of it, but that they consider it the lesser of two evils. That the small harm caused by inflation, balanced against larger harms that the spending projects are attempting to fix, and that some people, fully intelligent and economically-educated, have compared the two and quite soberly assessed the inflation as the lesser of the evils.

Forecast Uncertainty
The economic projections provided by the members of the Board of Governors and the presidents of the Federal Reserve Banks inform discussions of monetary policy among policymakers and can aid public understanding of the basis for policy actions. Considerable uncertainty attends these projections, however. The economic and statistical models and relationships used to help produce economic forecasts are necessarily imperfect descriptions of the real world, and the future path of the economy can be affected by myriad unforeseen developments and events. Thus, in setting the stance of monetary policy, participants consider not only what appears to be the most likely economic outcome as embodied in their projections, but also the range of alternative possibilities, the likelihood of their occurring, and the potential costs to the economy should they occur.

BREAKING|Nov 10, 2021,11:19am EST|1,374 views
Biden: Reversing Inflation ‘Top Priority’ After Consumer Report Shows Climbing Prices

TOPLINE President Joe Biden responded to the Consumer Price Index report Wednesday, which showed U.S. consumer prices had their largest surge in more than 30 years, saying there is “more work to do before our economy is back to normal,” and using the opportunity to urge lawmakers to pass his Build Back Better plan.

BIG NUMBER
6.2%. That’s how much inflation has increased in the past 12 months, according to the Consumer Price Index report.

CHIEF CRITIC
Republicans have honed in on inflation concerns, and some have argued that Biden’s plan will make the problem worse. Senate Minority Leader Mitch McConnell (R-Ky.) said earlier this month that inflation is a “direct result of flooding the country with money,” adding that Biden’s plan would add “another massive, reckless tax and spending spree.” House Minority Leader Kevin McCarthy (R-Calif.) echoed a similar sentiment in a tweet Wednesday, saying that the Build Back Better plan will spend “trillions that will only make this crisis worse.” Rep. Jim Banks (R-Ind.) wrote in a memo that focusing on inflation and supply chain issues is “hitting home with voters,” and referenced the results of the Virginia gubernatorial election. “We need to keep hammering away and work on bringing solutions to the table to address their concerns,” he wrote.

CRUCIAL QUOTE
Sen. Joe Manchin (D-W.Va.) said in a tweet “the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse.” Manchin has been one of the major holdouts on passing Biden’s Build Back Better plan, first saying the $3.5 trillion price tag was too much, and last week adding that he needed more time to evaluate the lowered proposed cost of $1.75 trillion. Manchin added that Washington can “no longer ignore the economic pain Americans feel every day.”

SURPRISING FACT
More than two-thirds of Americans said inflation is a “very big concern,” outpacing worries on Covid-19, according to a Reuters/Ipsos poll released last week.

Remarks by President Biden in Press Conference
NOVEMBER 02, 2021
•
SPEECHES AND REMARKS

Q And then, a follow-up: You mentioned the word “inflation” there. You recently said you have no short-term answer to bring down gas prices. But, as you know, it’s not just gas prices now. Rents are up. The cost of everyday items are up. Inflation in the U.S. is at a 13-year high.

So, when specifically should Americans expect those prices to come down?

THE PRESIDENT: Well, look, first of all, the significant reason why prices are up is because of COVID affecting the supply chain. I mean, I know you — I’m not trying to be instructive; I know you know this. Number one.

Number two, if you take a look at, you know, gas prices and you take a look at oil prices, that is a consequence of, thus far, the refusal of Russia or the OPEC nations to pump more oil. And we’ll see what happens on that score sooner than later.

Number three, I think if you take a look at what we’re talking about — you look to this coming Thanksgiving — you know, we’re in a situation where we find that we are in a very different circumstance.

Last Thanksgiving, you know, I — as I said, this year, we’re working on the supply chain issue. But last Thanksgiving, I sat down with my wife, my daughter, and my son-in-law. This Thanksgiving, we’re all in a very different circumstance. Things are a hell of a lot better, and the wages have gone up higher — faster than inflation. And we have generated real economic growth.

It doesn’t mean these dislocations aren’t real. They do affect people’s lives. For example, one of the reasons why I decided to talk about the need to deal with the operation and the gouging that occurs in some of the pricing of beef and chicken and other things is that that’s why I think I indi- –that’s why I indicated to you we’re going to look at whether or not there’s a violation of antitrust laws and what they’re doing.

So, there’s a lot to look at. But the bottom line is that I think that — and anyone who would prefer, as bad as things are in terms of prices helping — hurting families now, trade this Thanksgiving for last Thanksgiving.

Q Thank you, sir.

Biden again rejects inflation concerns, claims price spikes are temporary

https://nypost.com/2021/07/22/biden-again-rejects-inflation-concerns-claims-its-temporary/

President Biden on Wednesday night again rejected concerns that inflation could be more severe and longer-lasting than previously thought — even as a chorus of voices on Wall Street have begun to accept that recent price spikes could stick around.

Danielle Lippi, a student and a registered Republican, asked Biden about the latest inflation data at CNN’s town hall in Ohio on Wednesday evening.

“Are you concerned about the higher inflation prices, especially as we see gasoline, automotive, and food prices increase rapidly?” she asked.

“What is your administration doing to help prevent the economy from overheating, such as the poor and middle class are not hurt by the higher prices of goods in the long run?”

Biden’s dismissal of inflation echoes comments made by Federal Reserve Chairman Jerome Powell, who acknowledged last week in front of Congress that inflation will likely stick around at high levels for a few months, but will eventually come down.

Despite Powell’s view, some of the biggest players on Wall Street have raised the alarm that inflation could be worse than the feds are prepared for.

“I worry about inflation. I do not believe inflation is going to be transitory,” BlackRock CEO Larry Fink told CNBC last week. Instead, he said, “It’s going to be more systematic over time.”

“How the Federal Reserve and how other central banks navigate that is going to be very important,” he added.

HitRed wrote:I’m making another large silver purchase on Monday. I may double it. The past few days I have been reviewing the 1970’s and 2009. On this current M2 chart (see link below) they are almost impossible to see. Then look at Mount Everest starting in 2020.

https://fred.stlouisfed.org/series/M2SL

Oct 19, 2021,11:15am EDT|6,010 views
What Does The Largest Social Security COLA Increase In 40 Years Mean For Your Retirement?

Americans receiving Social Security benefits in 2022 will see the largest increase in their payments in four decades, according to the Social Security Administration. The 5.9% cost-of-living adjustment (COLA), announced in mid-October, will translate to an additional $92 for retirees’ average monthly benefit next year, bringing that estimated amount to $1,657. While that’s a significant increase over the 1.3% COLA that went into effect in January 2021—and is certainly good news for those seniors who rely on Social Security benefits for all or a portion of their income in retirement—it comes with a caveat. The increase is driven by the steep rise in inflation over the last 12 months, which reduces the buying power of consumers, especially those living on fixed incomes in retirement.

How does inflation factor in?
In October, the U.S. Department of Labor (DOL) announced that its broader measure of inflation, the consumer-price index, rose 5.4% in September from a year earlier, marking the largest annual gain since 2008. According to the DOL, prices have increased significantly from a year ago for gas (+42.1%), used cars (+24.1%), furniture (+11.2%), appliances (+7.1%), and meat, fish, poultry and eggs (+10.5%), among other consumer goods. As a result, much of the Social Security COLA increase will be absorbed by the rising cost of goods and services and the projected annual increase in Medicare Part B premiums, which rise from $148.50 in 2021 to $158.50 in 2022. For most retirees, Medicare Part B premiums are automatically deducted from their monthly Social Security benefit payments.

One caveat to the numbers released today is that spiraling inflationary pressures greatly enhanced the amount of spending, which inflated the retail sales numbers that were reported today.

HitRed wrote:

The Velocity of Money

The velocity of money is a measure of the number of times that currency is used to make purchase within a given time period. This morning consumer spending was higher than excepted. This might be good news for the economy. It also might be consumers are concerned about inflation.

Excerpt from Kitco News

One caveat to the numbers released today is that spiraling inflationary pressures greatly enhanced the amount of spending, which inflated the retail sales numbers that were reported today.

thegreekdog wrote:
An interesting byproduct of COVID and damaged supply chain is whether US companies will begin manufacturing again in the US to solve the supply chain problem. I have not seen it written nor have I seen any bills proposed to encourage this type of US-based manufacturing.

Money Growth, Money Velocity, and Inflation

Low, stable inflation optimizes economic growth.

Inflation results when aggregate demand exceeds aggregate supply.

Aggregate demand is influenced both by the supply of money and the velocity of money.

The classical theory of inflation states that money growth causes inflation.

Inflation depends on money growth and the velocity of money.

The velocity of money equals the average number of times an average dollar is used to buy goods and services per unit of time.

jusplay4fun wrote:

Money Growth, Money Velocity, and Inflation

Low, stable inflation optimizes economic growth.

Inflation results when aggregate demand exceeds aggregate supply.

Aggregate demand is influenced both by the supply of money and the velocity of money.

The classical theory of inflation states that money growth causes inflation.

Inflation depends on money growth and the velocity of money.

The velocity of money equals the average number of times an average dollar is used to buy goods and services per unit of time.

https://thismatter.com/money/banking/money-growth-money-velocity-inflation.htm