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Expect Another Surge in Food Prices Fueled by Dynamic Pricing

Restaurants are moving towards dynamic menu prices. Expect big surcharges for peak times. Don’t expect off peak prices to drop much. Labor costs are rising too.

CPI food indexes prices, data from the BLS, chart by Mish

Surge Pricing Is Coming to You

Restaurants are experimenting with surge pricing to deal with peak hours and staffing demand. They like it. You probably won’t.

The Wall Street Journal reports Surge Pricing Is Coming to More Menus Near You

Restaurants like San Diego-based Cali BBQ are experimenting with a form of the dynamic pricing long used by airlines, hotels and ride-hailing services. Technology providers are pitching services that enable restaurants to change prices weekly or monthly, increasing or slashing the cost of a taco or sandwich between a few quarters to several dollars, depending on demand and sales patterns.

Dynamic pricing—charging higher rates at peak times and dropping them at slower ones—has become commonplace in industries such as e-commerce, and mobile apps have made it easier for companies to study consumers’ buying and browsing and quickly adapt. Rising costs in recent years have led more retailers to implement it.

Restaurants are experimenting with the technology as the industry looks for ways to boost sales and increase profits. Many restaurants increased menu prices as labor, food and other costs have soared since 2021.

Wendy’s drew public scrutiny after the burger chain said in a mid-February earnings call that it was looking to test dynamic pricing. The chain said it would invest around $20 million in its U.S. restaurants to install digital menu boards by 2025 that could suggest items to customers and present different offerings depending on the time of day.

…click on the above link to read the rest…

Getting vacancies wrong

Getting vacancies wrong

Like everything else that was shut down in 2020 and 2021, Britain’s job market was broken.  As businesses attempted to reopen, they were faced with a massive labour shortage.  Lorry drivers, for example, had all but disappeared.  Skilled construction workers were also in short supply.  But the biggest shortages were in traditionally low-paid sectors such as social care, retail, and hospitality.

One consequence of this “vacancy crisis,” was that it fed into a misguided neoliberal analysis of the sharp rises in prices following lockdown.  A proportion of the price increases were “monetary inflation” – the result of people spending the excess currency creation used to fund business support and workers’ furlough payments during lockdown.  But the majority of the price rises were simply the manifestation of a global economy attempting to incorporate and overcome broken supply chains.  Nevertheless, economists, journalists, and politicians began regurgitating the myths of the 1970s, and especially the fabled “wage-price spiral” in which higher wages would force prices to rise even further.

In those sectors of the economy where skilled workers were in short supply, wages did rise.  But the majority of vacancies were – and are – in low-skilled sectors where pay has remained depressed.  According to Office for National Statistics data, 814,000 of the total 932,000 current vacancies are in traditionally low-paid services; 401,000 in retail, hospitality and social care.  Nor is that low-pay merely a choice by business owners.  Rather, it is the result of decades of neoliberal austerity which has forced retail, hospitality, and social care businesses to be among the leanest and most cost-conscious in the economy.  Prior to the pandemic, this had the benefit (although not for the workers) of keeping those services cheap – a core purpose of neoliberalism.  But it also meant that, faced by labour shortages for the first time in decades, these businesses simply couldn’t afford higher pay because they were already cut to the bone.

…click on the above link to read the rest…

Record Global Debt: A Ticking Time Bomb for the World Economy

Record Global Debt: A Ticking Time Bomb for the World Economy

The relentless increase in global debt is an enormous problem for the economy. Public deficits are neither reserves for the private sector nor a tool for growth. Bloated public debt is a burden on the economy, making productivity stall, raising taxes, and crowding out financing for the private sector. With each passing year, the global debt figure climbs higher, the burdens grow heavier, and the risks loom larger. The world’s financial markets ignored the record-breaking increase in global debt levels to a staggering $313 trillion in 2023, which marked yet another worrying milestone.

In the Congressional Budget Office (CBO) projections, the United States deficit will fluctuate over the next four years, averaging an insane 5.8 percent of GDP without even considering a recession. By 2033, they still expect a 6.9 percent GDP budget hole. Unsurprisingly, the economy, even using optimistic scenarios, stalls and will show a level of real GDP growth of 1.8% between 2028 and 2033, 33% less than the 2026–2027 period, which is already 25% lower than the historical average.

Some analysts say that this whole mess can be solved by raising taxes, but reality shows that there is no revenue measure that will fill an annual financial hole of $2 trillion with additional yearly receipts. This, of course, comes with an optimistic scenario of no recession or economic impact from a higher tax burden. Deficits are always a spending problem.

Citizens are led to believe that lower growth, declining real wages, and persistent inflation are external factors that have nothing to do with governments, but this is incorrect. Deficit spending is printing money, and it erodes the purchasing power of the currency while destroying the opportunities for the private sector to invest. The entire burden of higher taxes and inflation falls on the middle class and small businesses.

…click on the above link to read the rest…

In Brief: The energy death spiral grows; Another bad omen; Hobsons choice

In Brief: The energy death spiral grows; Another bad omen; Hobsons choice

The energy death spiral grows

Although it is far from obvious, Ofgem – Britain’s energy regulator is supposed to act in the interest of energy consumers.  As the UK government explains:

“The Office of Gas and Electricity Markets (Ofgem) regulates the monopoly companies which run the gas and electricity networks.  It takes decisions on price controls and enforcement, acting in the interests of consumers and helping the industries to achieve environmental improvements.”

This will come as a surprise to the millions of UK households struggling to pay energy bills which are – now state subsidies have been withdrawn – higher this winter than last.  Indeed, we are now entering our third winter of eye-wateringly high energy prices, with no obvious respite in sight… the only consolation being that the closure of Britain’s heavy industries has at least prevented widespread power outages so far.

On the downside though, among the millions of households struggling to pay their bills are thousands – and growing – of households who are in default.  Not least because increased energy costs are hitting just at the point when general inflation has eaten into wages, when the Bank of England has jacked up interest rates (causing rents and mortgage payments to spike) and when governments (national and local) have decided to raise taxes to cover their own excessive debt.

So, what to do about the growing outstanding debt to the energy companies?  A genuinely consumer orientated regulator might tell the energy companies to eat the loss – perhaps taking the hit to shareholder dividends or senior management remuneration.  Alternatively, since this issue isn’t going away any time soon, they might tell government that now is the time to bring an end to this quasi-market farce and take the energy monopolies back into public ownership…

…click on the above link to read the rest…

Today’s Contemplation: Collapse Cometh XLIV–The Ruling Class: Chasing Growth Regardless Of the Consequences


Today’s Contemplation: Collapse Cometh XLIV

Tulum, Mexico (1986) Photo by author

The Ruling Class: Chasing Growth Regardless Of the Consequences

Today’s contemplation is in response to an article by the Honest Sorcerer whose writings I discovered not long ago and have enjoyed for their insight and clarity. I recommend reading them[1].


If only the tragedy that is unfolding in Ukraine would be a catalyst for our ‘leaders’ to highlight our existential vulnerabilities to the complex systems we have come to expand and depend significantly upon but, alas, I fear this crisis, as always seems to happen, is being leveraged by our ruling class[2] to benefit themselves primarily, not the vast majority of people. A few of the items this latest geopolitical event is being used to rationalise/justify include: the creation of more fiat currency and government spending (most of which will find its way into their investment portfolios); the expansion of the surveillance state (especially focused on those who question or challenge government diktats); as a foil to blame increasing economic and social woes upon (so as to keep their policies and behaviours that have contributed to these problems out of the light of day); as a reason to expand significantly and speed up tremendously our transition to ‘clean’ technologies, or the opposite — the expansion of legacy energy extraction (both of which whose necessary financial and industrial processes are owned/controlled by them); as rationale to expand narrative control/censorship (particularly of viewpoints/perspective that challenge or question the mainstream storyline); etc..[3]

I have zero faith that our governments at any level have solid plans to reduce or even mitigate the chaos of overshoot beyond attempts to keep the various Ponzis they preside over going as long as and in whatever manner they can. More than likely their approach will be to persuade the populace in the name of ‘patriotism’ and other such emotional trigger points to make increasing ‘sacrifices’, mostly in the form of increased taxes[4] but also in terms of weakened or diminished expectations as far as the ‘benefits’ that might accrue from further investments in complexity[5].

I’ve come to believe that the ruling class’s primary motivation is the expansion/control of the wealth-generation/-extraction systems from which they derive their revenue streams, and thus their power and prestige. Everything they do, from policy to legislation to censorship, first and foremost serves to meet this primary catalyst. Everything. It is all marketed differently (in fact, the opposite most of the time) but ultimately it supports or extends upon their primary consideration.

While the future is impossible to predict, the past suggests that as we fall down the Seneca Cliff of resource availability we will witness a continuation (perhaps even speeding up) of the flow of declining resources up the power and wealth structures inherent in our complex societies rather than down them as the ruling class purports to be pursuing. This will, however, be spun (as it has been throughout history), and increasingly so, in true Orwellian fashion as beneficial for the masses and necessary to keep our complex systems functioning. I suppose in a sense it is true that growth must continue to be pursued but this is primarily because of the Ponzi-like structure of our financial and monetary systems[6].

I see this very clearly in my home region north of Toronto where expansive growth is being not only cheered on by our ruling class but increasingly marketed as the only real means of addressing our various predicaments, especially economic expansion. Growth is progress and only beneficial is the common refrain. We need to expand in order to increase revenues and ensure equity. We can grow sustainably[7] without negatively impacting the environment. We have strong and unfaltering supply chains.

There is zero recognition of resource limits or they are waved away as environmental neuroses and/or doomsday conspiracies. Whatever issues might arise can be countered via more growth. The fact that our population of close to 15 million relies upon around 80+% of its food needs via fragile, long-distance supply chains while we continue to pave over our limited arable lands matters not[8]. ‘Sustainable’ growth ensures our prosperity and must be pursued.

As long as we have a ruling class that holds to the historical tendencies to place their interests above that of their constituents, then we have a situation where mitigation/adaptation will only be prevalent in the narratives spun, not the actual actions taken. I see this so clearly in the attempts to sustain the unsustainable via stories about ‘net zero’ growth and a post-carbon transition to ‘clean’ energy. The ruling class profits immensely from these narratives as they own/control the financial institutions and industries needed to fund and produce these technologies. It doesn’t matter that they do not in any way, shape, or form do what they are marketed as being able to accomplish.

Infinite growth (even sustaining our current world complexities) is not possible on a finite planet. Never has been. Never will be. Techno-cornucopian ‘solutions’ only serve to make the rich richer and the coming collapse from ecological overshoot all the more spectacular.

Readers are encouraged to focus on relocalising the basic aspects of living (i.e., potable water procurement, food production, and regional shelter needs) as much as possible and reconnect with community members who will be your primary supports as things go increasingly sideways. Do not put your faith in our so-called political ‘leaders’. Despite their propaganda, they do not have your best interests at the top of their agendas; if such an incentive even makes the agenda except perhaps around election time when the marketing of more, more, more really blossoms. Because, you know, more is in your best interest…only it’s not.

[1] Full disclosure: the articles align very much with my own thinking and so serve to confirm my own interpretive biases.

[2] It’s not just our ruling class that is using the situation to benefit from. There are numerous grifters leveraging it as well.

[3] These are a continuation of trends that have been taking place for decades (centuries), most recently with the coronavirus pandemic.

[4] Especially in terms of that ‘hidden’ tax, price inflation — that will be blamed on everything, particularly the ‘enemy’, but their expansion of debt-/credit-based fiat currency and diminishing returns on our resource-dependent complexities; and I expect intensified manipulation of the reported statistics pertaining to price inflation as part of the narrative control taking place, even more than the current obscene and increasing levels.

[5] I highly recommend reading archaeologist Joseph Tainter’s book The Collapse of Complex Societies to get insight into how diminishing returns on investments in complexity seems to be the underlying cause of a complex society ‘collapsing’. You can access my personal summary notes to this and a handful of other books here.

[6] Very, very few people want to destroy the illusion that our financial/monetary systems are robust and NOT Ponzi-like in nature as we are all embroiled in it. But once confidence in such schemes is lost it is only a matter of moments before the entire edifice collapses. I can only imagine the chaos that would ensue once a tipping point of people come to realise that these systems are held together by duct tape and prayer (and A LOT of lies).

[7] The idea of ‘sustainable’ growth is one of those oxymorons that drive me crazy–’clean’ or ‘green’ energy being another. Such language manipulation is quite purposeful as a narrative control mechanism and needs to be highlighted every time it occurs. It significantly distorts one’s perceptions of what is and what is not possible on a finite planet.

[8] The overwhelming majority of Ontario’s prime agricultural land is dedicated to modern industrial agriculture in order to grow corn and soybean for products that do not, for the most part, feed its population.


The True Costs of Net Zero Are Becoming Impossible to Hide

Our net zero lesson of the day is from the U.K. but it applies universally. It’s increasingly difficult for Biden and the EU to hide the true costs of net zero mandates.

Britain Boiler Tax Scandal

In the latest green fiasco, UK Prime Minister Rishi Sunak created a quota system that would require manufacturers to sell more heat pumps to households.

Instead of meekly complying with the regulation as happens with Biden administration EPA announcements, manufacturers let consumers know they would have to pay up whether they installed the heat pumps or not.

Manufacturers correctly dubbed the scheme a “boiler tax” and consumer outrage killed the regulation.

Britain Dumps Another Net-Zero Gimmick

The Wall Street Journal reports Britain Dumps Another Net-Zero Gimmick

Most English households use natural gas to fuel the cabinet-sized boilers that provide central heating and hot water, and forcing them to adopt electric heat pumps (ultimately powered by renewable energy) is part of the government’s net-zero agenda.

An earlier proposal to ban gas-boiler sales after 2035 proved politically toxic as households balked at the cost of replacing their reliable natural-gas boilers with more expensive, untested heat pumps. So politicians resorted to subterfuge, imposing a sales quota on manufacturers. Starting in April, heat pumps would have to replace 4% of annual boiler sales or companies would pay a £3,000 fine for each “excess” natural-gas boiler they sold.

Worcester Bosch, Britain’s leading manufacturer, warned last year that the proposed quota would add up to £300 ($376) to the cost of natural-gas boilers, which retail for £1,000 and up.

…click on the above link to read the rest…

“Dangerous Game”: Chevron Warns California That Anti-Petrol Policies Could Result In Gas Price Spikes, Shortages

“Dangerous Game”: Chevron Warns California That Anti-Petrol Policies Could Result In Gas Price Spikes, Shortages

Chevron is warning the state of California that its climate policies have consequences: namely, that the price of gas is going to continue to rise.

Calling the state’s policies a “dangerous game”, it was reported by Bloomberg this week that Chevron is warning the state of potential gasoline price spikes and shortages as a result of policies that discourage petrol production.

In the last quarter of 2023, drivers in California faced an average gasoline price of $4.94 per gallon, surpassing the national average by approximately $1.72, marking the highest recorded quarterly difference, as per Bloomberg’s compiled data.

Head of Chevron’s U.S. refining, Andy Walz, said this week that the spike is partly attributed to California’s stringent low-carbon fuel regulations, which prompt refineries to shift from petroleum to renewable diesel production. This transition is curbing gasoline availability and causing prices to rise, he told Bloomberg.

“They knew it was going to happen when they wrote the legislation. The problem is the consumer is starting to realize it. It’s becoming painful. The way politicians dealt with it was ‘let’s blame the oil companies,” Walz said.

But – as expected – Governor Gavin Newsom’s office responded with a vague statement blaming oil producers that was barely one brain cell above throwing paint on the Mona Lisa: “Big Oil has been ripping off consumers for decades and lying to protect their profits.”

And so, the adversarial tone naturally drives producers from the state: “If they cap the upside when conditions are good it’s going to make it really challenging to want to put our money there. I cannot compete internally for big capital investments. It doesn’t stack up. I’d rather spend money at our refinery in Mississippi,” Walz said.

As the report notes, Chevron’s relationship with California has become increasingly strained, with stringent regulations leading to a $4 billion asset write-down, mostly in the state.

…click on the above link to read the rest…

Everyone Loves a Generous Government Until They Have to Pay For It

Everyone Loves a Generous Government Until They Have to Pay For It

Not only does everyone love getting “free money” from the state, they also love hearing the fantasy repeated endlessly that debts are no problem.

Governments, like individuals, can spend liberally with great generosity, or they can be frugal. Everyone receiving government money loves the state’s free-spending generosity, as it is “free money” to the recipients.

But there is no such thing as truly “free money,” a reality discussed by Niccolo Machiavelli in his classic work on leadership and statecraft, The Prince, published in 1516. In Machiavelli’s terminology, leaders could either pursue the positive reputation of being liberal in their spending (not “liberal” in a political sense) or suffer the negative reputation of being mean, i.e. miserly, tight-fisted and frugal.

Machiavelli pointed out that the spending demanded to maintain the reputation for free-spending liberality soon exhausted the funds of the state and required the leader to levy increasingly heavy taxes on the citizenry to pay for the state’s largesse.

Once we examine this necessary consequence of liberal spending, it turns out the generous government is anything but generous, as it is eventually forced to impoverish its people to support its spending.

It is the miserly leader and state that is actually generous, for it is the miserly leader / state that places a light burden on the earnings and livelihoods of the citizenry.

As Machiavelli explained, taxes and the inflation that comes with free spending both rob everyone, while the state’s generosity is a political process that necessarily distributes the largesse asymmetrically:

If he is wise he ought not to fear the reputation of being mean, for in time he will come to be more considered than if liberal, seeing that with his economy his revenues are enough…

…click on the above link to read the rest…

Americans Understand Inflation

Americans Understand Inflation

Everyday Americans understand inflation perfectly. But the egghead economists and policymakers who govern their lives don’t.

That may be because inflation is one of the biggest concerns of those who live in the real world, and it may lead to a political earthquake next November in the presidential and congressional elections.

Here’s the reality and here’s the political narrative: Reality is that prices have been going up at the fastest rate in 40 years and they are still going up.

Inflation (on an annualized basis) was 9.1% in June 2022, 4.9% in April 2023, 3.7% in September 2023 and 3.1% in November 2023 (the most recent data available).

It’s true that the rate of inflation is coming down, but prices are still going up. They’re going up at a slower rate but they’re still going up.

Not only that, but past price increases are locked in so new price increases are applied to a higher base. This is killing American consumers.

The average price of a pound of ground beef in the U.S. was $5.11 in September 2023. In October 2023 the price of a pound of ground beef was $5.23. That’s a 2.3% increase on a month-over-month basis, which annualizes to over 25%.

That’s the kind of inflation that real Americans confront every day.

The economists prefer measures of inflation that exclude energy and food prices, what they call “core” inflation. Some eggheads use measures that exclude food, energy and housing costs. They call that “super-core” inflation.

Those measures are academic constructs and bear no relationship to the real world. Try living without gas in your car, food on the table or a place to live.

The ignorance of politicians gets worse when we see Joe Biden come out and say, “Prices are going down,” and retailers should lower their prices and avoid “price gouging.”

Biden is purposely confusing lower rates of inflation (which are still price increases) with lower prices (which are not happening).

…click on the above link to read the rest…

The World Is Sitting on a Powder Keg of Debt

The World Is Sitting on a Powder Keg of Debt

The Federal Reserve recently surrendered in its inflation fight. But price inflation is nowhere near the 2% target. Why did the Fed raise the white flag prematurely?

One of the major reasons is debt.

The world is buried under record debt levels and the global economy can’t function in a high interest rate environment.

Fed officials know that and it is certainly one of the reasons they don’t want to raise rates any higher and hope to bring them down as soon as possible.

Over a decade of easy money policies incentivized borrowing to “stimulate” the economy. As a result, governments, individuals, and corporations all borrowed to the hilt. That was all well and good when interest rates were hovering around zero, but when central banks had to hike rates to battle the inevitable price inflation, it pulled the rug out from under the borrow-and-spend economy.

Governments around the world are feeling the squeeze as they try to deal with trillions in debt in a rising interest rate environment.

According to projections by the International Monetary Fund (IMF) global government debt will hit $97.1 trillion in 2023. That represents a 40% increase since 2019.

By 2028, the IMF projects that global public debt will exceed 100% of global GDP. The only other time global debt-to-GDP was that high was at the height of the pandemic lockdowns.

Americans like to brag about being number one. Well, when it comes to debt, they’re right.

The US national debt makes up 32.4% of the total global government debt.

According to the IMF, America’s debt-to-GDP ratio stands at 123.3%.

This chart by Visual Capitalist captures the extent of the problem.

THE DEBT SPIRAL

Unless governments dramatically cut spending and/or raise taxes, this debt spiral will only get worse, especially if interest rates remain elevated.

…click on the above link to read the rest…

Inflation in Real Life Much Worse Than in Government Fantasy World

Inflation in Real Life Much Worse Than in Government Fantasy World

Inflation is dead!

At least that’s what you would think if you listen to government officials and talking heads in the financial media.

So, how is this victory over inflation working out for the average person?

Not so great.

Based on official CPI data, price inflation has cooled somewhat, although it remains far above the Federal Reserve’s 2% target. That hasn’t stopped President Biden and most of the mainstream financial media from declaring victory over rising prices. Biden even suggested that companies should start cutting prices since inflation is falling.

It’s important to remember that even if we believe the government numbers and price inflation is cooling, that doesn’t mean consumers are getting any relief.

Prices are not falling. They’re just going up slower than they were six months ago.

And those price increases are cumulative. Since January 2022, prices have risen 9.7% based on the CPI. And the CPI is designed to understate rising prices.

In other words, we’re all still coping with much higher prices no matter what the latest CPI report says. And the suffering is far worse than sterile BLS reports indicate.

This becomes clear when we go out in the real world and stop listening to news people spouting government numbers.

Ironically, we can learn more about the actual impact of inflation from the movie Home Alone than we can from some guy on CNBC droning on and on about the CPI.

In this 1990 classic, 8-year-old Kevin McCallister’s family went on a holiday trip to Paris and accidentally left him alone in his house. Chaos ensues.

You may recall that after realizing he’s alone, Kevin makes a trip to the grocery store. After all, a kid has to eat.

…click on the above link to read the rest…

Deutsche Bank Economists Say the Fed Will Create More Inflation in 2024

Deutsche Bank Economists Say the Fed Will Create More Inflation in 2024

Deutsche Bank economists say the Federal Reserve will create more inflation in 2024.

OK, that’s not exactly what they said. But that is the implication of their latest forecast.

The Deutsche Bank analyst forecast that the Fed will cut rates by 175 basis points in 2024 in response to a “mild” recession. That would drive the Federal Reserve funds rate down to between 3.5% and 3.75%.

This loosening monetary policy, by definition, would create more inflation.

The Fed currently has interest rates set at between 5.25% and 5.5%.

Most mainstream analysts now think the central bank will cut rates next year, but not as steeply as Deutsche Bank economists.

The dominant narrative today is that the Fed has successfully beaten down price inflation. A cooler-than-expected CPI report for October reinforced this notion. With inflation on the run, mainstream analysts think that the Fed has initiated its last hike and will pivot to rate cuts next year to guide the economy to a “soft landing.” Even before the CPI data release markets were pricing in 75 basis points of rate decreases in 2024.

Many mainstream analysts and financial news network pundits have taken a recession completely off the table. But Deutsche Bank senior US economist Brett Ryan told Reuters he expects the US economy to hit a “soft patch” that will lead to a “more aggressive cutting profile.”

Ryan said he expects this economic weakness to further ease inflationary pressure.

The Problems With the Forecast

There are several problems with the Deutsche Bank projections, and the entire mainstream narrative more generally.

In the first place, the death of inflation is greatly exaggerated. No matter how you slice and dice the data, none of the numbers come close to the Fed’s 2% target. Core CPI is still double that number.

…click on the above link to read the rest…

The Great Simplification Ahead

The Great Simplification Ahead

“Until debt tear us apart”

There is no denying that a major economic downturn is now in the books, and that lacking an energy miracle, the world economy is about to go through a major shift. After discussing the faulty nature of prevailing economic metrics (GDP) in last week’s essay, and understanding how economic growth has turned into stagnation 18 years ago already, let’s turn our eyes towards the future. What might the world economy look like after the onset of the coming crisis? How would world leaders react? Could gold or bitcoin save the day? Let’s dive in.


There is a yawning gap between real economic productivity and debt in the world economy. Despite the fact that GDP seems to be growing, real economic output (best measured by energy consumption) has been stagnating for almost two decades now. As a result Western nations have lost their dominance in the world economy, and now face a steep decline due to an ever worsening energy balance and their colossal import dependence.

You see, this is not a matter of money or the lack thereof. Governments all around the world had the chance to print all the money they wanted in the past two decades. There were two thing they could not conjure up, however: cheap raw materials and energy. Contrary to common wisdom, the green energy transition is not a miracle waiting to happen, only an expensive and utterly unsustainable addition to the existing fossil fuel energy infrastructure. Shale oil, the much heralded “solution” to peak oil, has also run its course and now is close to reaching its all time high… Only to embark on a steep decline afterwards. None of this is a monetary question, only a matter of geology and economics: resource depletion and the resulting cost increase. Printing money does not solve any of these issues, only creates more inflation.

…click on the above link to read the rest…

The Psychological Pain of Inflation

The Psychological Pain of Inflation

The Bureau of Labor Statistics (BLS) tomorrow morning will report its Consumer Price data from October. The Producer Price Index (PPI) appears the following day.

There will likely be no real surprise here: inflation will still be running hot around 3.7 percent, confirming what I and many have suspected. Inflation is overall accelerating over the declines earlier this year. That’s bad economic news because it further confirms lower living standards and continues to vex average people juggling multiple jobs, high interest payments on debt, and increased unaffordability of just about everything.

 (Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)
(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

“Inflation has given us a few head fakes,” Fed chair Jerome Powell said at an International Monetary Conference over the weekend. He further swore that he would continue to use the power of the Fed to beat back this monster. But notice that he took no responsibility for inflation at all, despite the factual record showing that he enabled some $5 trillion in debt purchases from a spending-mad Congress, and soared the money stock in ways we’ve never seen.

This is the first time that I can recall the Fed chair having anthropomorphized inflation, as if it has a will of its own, has a head on its body, while using clever tricks to get around the defense front line, which of course is the Fed.

The line about “head fakes” pertains not to inanimate inflation but to the very human and oddly devious Fed itself. To understand Powell’s remark here fully requires a refresher lesson from Freud in what it means to project one’s failings on something else. It’s really childish—the young child blaming the monsters under the bed for the mess in his room—but it works due to the economic ignorance of the public.

…click on the above link to read the rest…

Peter Schiff: A Crisis Is Already Playing Out Under the Radar

Peter Schiff: A Crisis Is Already Playing Out Under the Radar

The mainstream remains optimistic about the trajectory of the economy. Price inflation has supposedly been beaten down. GDP growth was even better than expected, and most economists have tabled their recession predictions. But in his podcast, Peter Schiff explained that it’s all an illusion. The financial crisis has already started, and it continues to play out beneath the radar.

Nobody understands that this crisis has started. But believe me, it has. This was the way the 2008 financial crisis started. It didn’t just happen when Lehman Brothers went bankrupt.”


By the time Lehman went under, everybody knew there was a crisis. But it was obvious long before that.

That’s the reason it went under. It didn’t just go out of business out of the dark. It wasn’t just happenstance. The reason that Lehman Brothers, and Bear Sterns, and Fanny and Freddy, and AIG, and all these companies went under was their exposure to the mortgage market. That exposure was obvious to me for years, but particularly in 2007 when the subprime market blew up. That was the point where even the village idiot should have been able to figure out what was coming. The problem was most people on Wall Street weren’t even smart enough to qualify as the village idiot, so they still couldn’t figure it out.”

They needed the proverbial anvil to fall on their head. That finally happened in 2008. But even in the summer of ’08, a lot of people were oblivious.

So, if you’re wondering, ‘Peter, how can we be so close to this massive crisis, in fact, how could this crisis have already started if nobody is talking about it?’ Well, just go back to the summer of 2008. Nobody was talking about it.”

Peter emphasized that this crisis is much bigger because the problems driving it are much bigger.

…click on the above link to read the rest…

Olduvai IV: Courage
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Olduvai II: Exodus
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