Year-Over-Year CPI Jumps 5%, That’s the Most Since August 2008
Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
This post originated on MishTalk.Com
Thanks for Tuning In!
Mish
Subscribe
33 Comments
Newest
2 years ago
We are in bubble territory in all asset classes. Speculation is rampant just like 2007. We may not have a banking crisis but it’s not sustainable. Anyone buying homes at current price levels will come to regret it just like 2007 unless they dont care about their asset value or are independently wealthy enough for it not to matter.
2 years ago
Or when the property tax bill comes. . On long Island or Westchester County ny property taxes can easily be over $10,000 a year
2 years ago
“The Fed, a collection of groupthink fools, is pleased. Consumers aren’t.”
Consumers are not the Fed’s constituency.
2 years ago
Remember that the Fed is NOT a part of government. It is owned by the banking system. It’s core function is to keep the banking system prosperous. Because the governors are approved by Congress, and the head is appointed by the President, they have taken on some additional goals, such as full employment and controlling inflation, but those are secondary.
Why does the Fed favor 2% inflation? Mish has argued that people are more prosperous with no inflation, or even mild deflation. That may be true, but what about banks? I suspect that banks are more prosperous with inflation, and therefore the Fed favors inflation.
2 years ago
So now everyone (including yourself) is saying inflation is transitory (whatever that means), just pick and choose what items count as inflation and use the ‘pandemic’ as an excuse. Before the pandemic retail stores were alledgely closing, now there is a huge shortage in retail of both product, locations to open new stores and employees???before pandemic there was supposed to be a huge number of off lease vehicles flooding the used car market, now after the whole pandemic charade there is a record shortage of used vehicles to sell even though the new vehicle SAAR rate is at record highs. See where I am going here
2 years ago
It is foolish to think that a profit making economic system largely with no control over the decision by enterprise to inflate….will not inflate. It is equally stupid to think that a system alternately goosed and strangled by the money system will ever be stable…especially when that money and financial system has a monopoly paradigm on the nature of money. This is why the dual policies of a universal monthly dividend and a 50% discount/rebate policy at retail sale are paradigm changing.
2 years ago
Lumber prices explained : Biden will increase tariffs on Canadian lumber , tip in on Reason mag’s spin .
link to reason.com
2 years ago
Another good day for gold and silver. I expect many more this month. Some of these miners are going to have great earnings going forward, don’t miss out, get in while they are still cheap.
Looks to me like bitcoin and gold are going there separate ways. I expect bitcoin to go down to 20,000 or so and gold rise close to its all time high going forward. We shall see.
2 years ago
…Just wondering; would it be possible that despite, let s say, a 10 or even 20%, real inflation, interest rates would still remain subdued ? According to another Mish article, banks are awash with cash, so why would they ever pay 2, 3 or even a mind boggling 5 % on our cash again?
2 years ago
The Fed has, potentially, total control over interest rates all along the curve, no matter what the inflation rate is. Inflation could run at 15% but the Fed could still set the 30 years bond at 0 if it chooses to do so. What the Fed cannot control is the exchange rate of the dollar on the way down.
2 years ago
….and all mayor currencies are ‘sick’ in the same bed aspiring a fckn weak currency …so people with cash are, or will be screwed indefinitely ….
2 years ago
The CPI report was good for the metals apparently. SLV finished in the green and my trade is still green…..barely. I was a little early on my entry, but my outlook hasn’t changed at all.
It’s been one of those weeks that if you were given to conspiracy theories, you might wonder why the metals were being driven down in the overnight hours when the US markets were closed, but then got bid back up every morning at the NYMEX open. Cuz that is what happened. Curious, that’s all.
Probably nothing going on behind the scenes there . I’m just a suspicious old man. A crank, some might say.
2 years ago
I think you ll probably wind up being the richest man….on the cemetery…many years from now,of course…
2 years ago
It’ll be here before we know it, I’m afraid.
It’s like that old Kenny Rogers song about the gambler….the best you can hope for is to die in your sleep.
2 years ago
Something’s going on every night…. that’s when the big moves happen. You can see it chunking if you look at the weekly chart.
All the games are rigged. If you can figure out how they’re rigged, you’ll be a rich man.
2 years ago
I believe it’s all transitory.
Just like everything in life, including life itself.
2 years ago
At the end of the day, we’re just specks of meat, inhabiting a thin layer of slime on a rock whirling through an infinite void.
2 years ago
link to youtu.be
2 years ago
Transitory………Right.
How do you measure inflation when various components are all over the map? And when certain things that everybody needs (like a roof over their head) are not properly measured?
That’s a rhetorical question…..but I can tell you that REAL rents are about to explode higher, because there’s a perfect storm of reasons for that to happen. Rising maintenance costs are one. Rising taxes, both as a result of rising valuations (which rise in a delayed response to higher housing costs, but rise nonetheless)…..and because most municipalities are looking to raise taxes anyway….to the limits of what the market can bear, apparently. Austin taxpayers are groaning under the load these days…before the higher valuations even.
We had this inflation v.deflation argument in 2009…..and what happened is that deflationary forces continued to hold down wages and the price of some goods…but some essentials did get more costly…and notably, asset prices went up, once the markets bottomed. if you spend money on things like food and medicine and energy, I wouldn’t expect life to get easier to pay for, personally.
I know that rising prices are not how YOU measure inflation Mish…but it is how most people get to deal with the fallout. I’m not a big fan of Charles Hugh Smith, but this one piece from him that hits a lot of points I think are important.
link to oftwominds.com
As someone who might join the fixed income club known as retirement sometime in the next few years, I am concerned myself…..primarily with the costs of living, not how much new money is being created by the banks through lending.
2 years ago
Rising wages are the only thing that can drive up rent past a certain point. People can’t borrow rent for 30 years like they can purchase money. It doesn’t matter what your expenses are if people can’t pay that much.
2 years ago
I think there is some elasticity. We often rent to multiple single adults now who share rent on a big house. Wages are definitely going up here. I know because I’m an employer. And I don’t see a reason rents couldn’t go up substantially. My management company assures me that the rental market is red hot here right now, and we will have no trouble renting my units.
2 years ago
Steel has gone up more than 2%, plastic. If you want to get contractors out to a site to do work, its about a 4 to 6 month wait and the cost is more than 2.2% more expensive than last year as well. Only thing I can guess is that since they issued so much debt, now $27 trillion???, maybe the goal is to devalue the dollar so much, those trillions mean nothing
What a bunch of clowns. They are hurting the majority of the populous on all sides, except those that own hard, non replicatable assets.
2 years ago
So which is it… Fed policy is hurting the majority of the population or the economy is red hot with rising wages and red hot demand across the board
Both arguments contradict
2 years ago
Whats contradictory? Inflation is pushing up the value of hard assets, they are inflating. If you do not own assets, like the majority of the population, you probably dont like whats going on. Inflation also pushes up the price of day to day goods and services. I dont see how that doesnt mesh
2 years ago
A couple posts on an old fence rotted out so last year my neighbour and I called in a company to replace it. Red cedar. Estimate: $3700. The plan was to build the new fence last September! But we had a big shortage of construction materials and the work couldn’t get done.
Same company came in this week and the new estimate was $6800. So we called in two there and the estimates were $7000 and $7500.
Sept 2020 $3700. May 2021 $6800. Is that 5%???
Despite being too old for building fences, we’re going to do it ourselves now, but the materials are going to run us about $4k when all is said and done.
Ant yet…..it seems every second house on my street has a renovation truck in front of it, so what do I know?
2 years ago
And of course you go ahead and pay the $6800… This mindset contrived ‘shortages’ aka FOMO is what is driving inflation
2 years ago
First 5 months of 2021 CPI is up 2.9%, and Yellen says all of 2021 inflation “might be as high as 3.0%”. So the next 7 months she expects essentially 0. What is she smoking?
2 years ago
Mish! Do you see a a big deflationary bust coming down the pike a la 2008?
2 years ago
Yes – but timing in 2008 was far easier to pick.
2 years ago
The fed was pricking the bubble back then. So definitely no chance it will happen until fed message changes.
2 years ago
So we’re going to see a strong Social Security increase for 2022? Or more likely, the government will find a way to minimize/eliminate any increase by claiming there hasn’t been any price change in the cost of brass bolts.
2 years ago
That’s where we really find out how much BS they plan to ram down our throats.
It’s not only Social Security, but a lot of public union contracts and pensions have COLA built into them too and if they rise by 5-6% then taxes must also rise by at least that amount and the vicious cycle takes off.
2 years ago
We’ll all end up in higher tax brackets before it’s all over.
Maybe someday I’ll be in that bracket with the billionaires that pay no tax.