Sunday, June 27, 2021

Bill Crawford: Fed Sits Still as Prices Surge

The price of boneless, skinless chicken breasts has more than doubled since the beginning of the year and wing prices have hit records reported the Wall Street Journal. The average price for a pound of bacon jumped 7% since January reported NBC News. Beef prices have also surged.

Regular gasoline prices in the Gulf Coast area are up nearly $1 over last year according to the U.S. Energy Information Administration. Tom Kloza at the Oil Price Information Service believes that come this fall drivers could pay the highest gasoline prices in nine years.

The average price for used vehicles hit an all-time high in May according to Kelley Blue Book. The average new car price jumped 7.9% in May according to the U.S. Bureau of Labor Statistics (BLS).

Airline fares increased 7% and car and truck rental prices jumped 12.1% reported CNN. Timber prices have increased over 250% during the past year reported Business Insider.

Overall, year over year inflation hit 5% in May, up 8.2% over three months according to the BLS data.

Meanwhile, interest rates for CDs (at record lows) and money market funds scarcely budged. And mortgage rates just creeped up a little.


Normally such inflation would send interest rates soaring. Indeed, that’s the way a free market system works.

But not now, because the Federal Reserve is stepping in to keep rates artificially low.

“Though the inflation readings are well above anything seen since the 2008-09 financial crisis, the Federal Reserve has been largely dismissive of the numbers,” reported CNBC. “Central bank officials believe the current rise is due to temporary factors that will abate as the year goes on.”

Indeed, at its June 15-16 meeting the Federal Open Market Committee announced there would be no change in its policies.

What are those policies? In simple terms they are freezing the federal funds rate between 0% and 0.25% and buying up Treasury securities and mortgage bonds at the rate of $120 billion a month to keep those rates low.  

Another policy has been to hold inflation down to 2%. Normally, when inflation surges the Fed increases interest rates to tamp down surging prices. Not this time. The Fed changed its policy to allow inflation to surge with the hope that it will eventually ease and average around 2% over a multi-year period. (Note: declining inflation does not mean prices will decline.)

That’s a risky bet. “Investors need to consider the possibility that the Fed is wrong,” reported the Wall Street Journal. “The risk that inflation continues to overshoot is clearly much higher than usual.” Prolonged low interest rates can also create a “monster bubble,” Forbes warned early this year.

Whatever, inflation is the great enemy of the elderly and working poor with limited incomes as it quickly erodes purchasing power.

“We used to buy this stuff for $30,” one grocery shopper told NBC News. “Now it’s $60.”

More trillions in spending from Washington won’t address this either, but will likely push inflation higher.

“The rich rules over the poor, and the borrower becomes the lender’s slave” – Proverbs 22:7.

Crawford is a syndicated columnist from Jackson.



Better Than Ever said...

Generally speaking, prices are spiking due to labor/material shortages. Encourage everyone you know to get vaccinated so that labor can get back to normal. Otherwise, with the delta variant and fall approaching... we will be riding the roller coaster all over again.

Garage Economist said...

I agree with BTE Delta has the potential to set us right back where we were. Gas prices are up but does that hurt or help the Gulf Coast Economy. Wages are rising and will keep up with inflation. Service jobs are transitioning, you can do self-service check out at C-stores and restaurants now days even with that they are paying decent wages with bonuses for employees. Having people compete for your services is great for the working man.

Anonymous said...

Shipping costs have increased as truck drivers are leveraging for more pay as many of them are collecting unemployment.

Anonymous said...

Some people are so invested in a seemingly hoped for return to Covid, to lockdowns, Covid related deaths and authoritarian government, etc.

Anonymous said...

When were you ever right in 2020?
You were the most vocal chicken little on this blog.
And the labor shortage and inflation is due to federal government interference.
This is what happens when you hand money to poors without them providing and labor.

Imagine a Stagnant Transition Loudly Approaching in Silence said...

I've never seen a 'self service checkout' at a convenience store or restaurant. What the hell are you talking about, 10:27.

Allow me to also point out that claiming 'Service jobs are transitioning' is a totally hollow and meaningless comment. The only 'transition' in that sector of our economy is the reality that people are refusing to accept or return to jobs.

Meanwhile, the real 'transition' is encountered as we all try to figure out the Biden-non-economy. The Fed czars realize he's a wounded bird in the middle of the American highway, not sure which lane he should rush toward next.

Anonymous said...

A blind man could see things are headed in the same direction they were in late 2007. Housing prices are through the roof and the Fed is again giving out cash like there’s no tomorrow. If they keep going at this rate there may not be one. Just how much debt can the country dig itself into until it realizes paying it back is hopeless? We’re already there! If this were a smart person he’d file bankruptcy immediately. But then no one running the government has ever been accused of being smart. Anyone who thinks differently are numb on both ends

Horse Hockey Spotted On Aisle 6 said...

Got a link to this nonsense?

'Shipping costs have increased as truck drivers are leveraging for more pay as many of them are collecting unemployment.'

Anonymous said...

Where's common sense? There's only so much "help" the so called free market economy can stand. For years they've been artificially propping up the economy buying up treasury securities by the ton and keeping interest rates ridiculously low. Now an administration which does not believe in free markets is determined to see how much money can be printed before the whole thing collapses. They really think credit is a human right. They do not understand the concept of limits. They will only learn the hard way. The time to pay the piper is coming, It will get ugly.

Anonymous said...

I'm no economist, but I've been awake and paying attention enough to know there are a lot more moving parts to this than just labor shortage. I don't think even supply-chain disruptions tell the whole story.

Price-gouging and market manipulation, i.e., greed and gluttony, were around long before COVID.

Anonymous said...

Why the hell would I go back to work when I can stay home, draw unemployment, and gamble on the commodities and stock markets, and also cryptocurrency exchanges, with my stimulus payments?

Anonymous said...

Keep it simple. Everyone needs energy which is predominantly crude oil. Not only for oil, but gas, aviation fuel, plastics, and even fertilizer. Oil transactions are settled in one currency….dollars. The Fed and Congress have created $8 trillion in new dollars driving their value down….hence driving up the price of oil while demand has also increased post pandemic. This is not transitory. Grain prices are also up due to drought in the west and Brazil. The labor shortage is largely a side bar for those arguing politics vs economics.

Anonymous said...

The Fed has been supporting tax cuts and propping up Wall St for many, many years with no concern for inflation as long as equities were going through the roof. Jim Cramer, et al, occasionally hint at the coming collapse but they prefer that the can will continue to be kicked down the road as long as the top .2% can continue to scarf up more digits on their net worth.

The REAL Republican Party(Wall St) will pour more Billions into playing the middle class for suckers on the hot button issues while quietly taking care of themselves. Just remember that Rand Paul and Bernie Sanders were lambasted off the stage by their own parties because they demanded that the Fed and the Pentagon be audited.

Anonymous said...

Just how much debt can the country dig itself into until it realizes paying it back is hopeless? We’re already there!

Massive currency devaluation. Inevitable.

Anonymous said...

There’s been no price increase for Nueske’s bacon at Fresh Market, though I wish they sold the cherrywood fired style Nueske’s sells.

Anonymous said...

Bacon prices have surged because the Congress has been sending home the bacon. A country is doomed when the pols realize that they can bribe the taxpayers with their own money.

Anonymous said...


Monet printing, fake interest rates, the Payroll Protection Program/PPP scam that gave $100s of thousands and Millions of dollars to companies that were doing fine or even booming…and we still use the words free markets in this country? BWAHAHAHAHAHAHAHAHAHAHA

The “Fed’s” got to keep ole Jamie Dimon, Warren Buffet, Bill Gates, et al fat and happy (the ones that, along with Biden want estate taxes on everything over $1,000,000, while they hide behind the their foundation scams that allow them, the very one’s that should be paying the estate taxes, to PAY NONE!)

Those with the most hard assets win with inflation (Bill Gates is now the largest individual owner of farm land in the USA) while savers that have worked their entire lives, and especially the poor, see their buying power erode.

@12:31, if you think Republicans control Wall Street, you need to wake up.
Who did Gates and Buffet support in the last 2 elections?
And do you ever watch the flaming lefties on CNBC?

Anonymous said...

Back to normal? Seriously, did somebody say that? Welcome to the new normal

Krusatyr said...

11:43 approx commented, perhaps satirically:
"...I can just stay home and gamble on cryptocurrencies..."

Some threw cash and hope down into the Africrypt, a humorous Indiana Jones sounding rip off unlike current Leftist oppression of Bidencrypt which is as funny as a slow death as it devalues/devours every aspect of life and country.

Better Than Ever said...

@10:47 Yeah, I was right all through 2020 and 2021. My projections generally ran less than 1% error from actual numbers reported. Just because you don't believe in math/science don't make them invalid.

You no longer saw the numbers because 1) KF quit publishing them from time to time and 2) I got tired of just _how_ willfully ignorant, uneducated, and ironically prideful the readership here is. Pearls before swine as it is...

For those paying attention, with a memory longer than 5 minutes, you will remember that hospital healthcare in MS came within a hair's breadth of cratering. And it was by the thankless, ceaseless, and selfless efforts of many people that it didn't fold entirely.

And for the record, our 7 day moving average is up 20% from our lowest prior numbers. So get your shots everyone. Wouldn't you rather be part of the solution rather than the problem?

Anonymous said...

I'm not getting the shot, not any of them. I'll take my chance with the virus.

Anonymous said...

7:08, good. More Social Security for the rest of us.

Better Than Ever said...

@7:08 If the virus only killed you, then I would be ok to let it. But it's simply not that way.

By failing to vaccinate, you are saying that it's ok for an enemy invader to:
1) attack your body
2) set up shop in it
3) sicken you, possibly kill you, or cripple you for the future
4) make more copies of itself and use your body/travels/interactions as a means to attack the rest of us
5) and roll the dice on *YOU* being patient zero that makes a new variant which evades ALL vaccines... so we get to start this whole mess from ground zero.





The worst of Mississippi.


Anonymous said...

It's my body, my choice. I believe I've heard that somewhere before. 10:05, it doesn't make a damn if you're "ok" with it, or not. Your grade school name-calling doesn't bother me, none at all. 9:10, you'll get the same little dab that Uncle Sam gives everyone else.

Anonymous said...

10:05 I wish I knew enough about these vaccines to simply condemn those who refuse to take it, but I don't and neither do the so-called experts. They are learning as they's basically experimental. Some people don't like being the subject of an experiment, even if it's called an emergency. I could call them dumb or crazy, but the fact is, I took an experimental drug when I am not sick because an expert who cannot guarantee anything, and will not be liable if it kills me, told me to do so. Who's crazy? Time will tell.

Better Than Ever said...

@8:39 Well the data is out there, so we can move ahead with the condemnation in good faith. And they are experts, not so-called ones. For lack of understanding the difference, please see my earlier posts in this thread. And, yes, this is all OT, but KF moderated it so I'm moving ahead.

So, you've got the best minds on the planet making a life-saving, economy-saving vaccine. It's either put your faith in their long hard work or put your faith in a constantly-mutating virus in hope it won't 1) kill you or 2) mutate and take us back to ground zero? Not a hard choice.

And for the record, our 7 day moving average, after this morning's numbers, is up ~40% from the 'bottom', with a clear upward trend established. So, it appears the dumbasses a.k.a. non-vaccinated are wanting to have covid round 2 'delta edition'.

@7:47 Yes you have. But your failure is one of logic. That analogy falls apart because MBMC affects a single person. Covid infection & transmission does not. MBMC has not crippled the economy. You need to bring your A game to debate me. Go back to school.

Anonymous said...

You need to bring your A game to debate me.

List your CV big man. Put up.

Anonymous said...

It's a damn cold people. NO one will ever jab me with that crap. I never missed a day of work last year, went anywhere and did anything I wanted and I didn't get sick. Hell, even if I had tested positive I would have been fine because I am not a whiny baby hypochondriac like most of the country these days!

Anonymous said...

June 27 @ 1:49 for the win. Right on!

Anonymous said...

What failure would that be, 9:20? It seems things are moving a little fast for you, so I'm going to type this slowly. Are you ready? It doesn't make a damn if you are "ok" with it, or NOT. You're one of those, want to be, dictators that would force people to do whatever "you" wanted. News flash, Homer, that doesn't fly with me. Your fearmongering ass had the whole state of Mississippi nearly dead last year. What happened to that? You were riding that overstated death train with the rest of the so-called experts and here you are again. You have tunnel vision, you have become fixated on this, and apparently can't get past it.
"Best minds on the planet" isn't that the way you put it? Why do you say that, because they have some education, or because they have "training" in a specialized field? Education, "training" in a specialized field, does that make them the best minds? Mankind has, at one time or another, trained nearly every creature on this planet. Does that make the creatures the "best minds" on the planet? Because some yahoo, this shoe fits you, too, could jump through the hoop, a little better, than the rest of their "training" mates, that doesn't make you, and them, the "best minds on the planet". In the past 18 months, the supposed "best minds on the planet" have been wrong, more than they were right. You can lie, deny, and defend it anyway you want. You and they were wrong. Go get you more statistics, ramble on about the trending whatever, and give us the prophecies of impending doom from you and the high priest of the medical community. Me, I'm going to enjoy "muh freedoms", while putting my faith in GOD.

Better Than Ever said...

@10:50 I'm going to reject all you typed out of hand due to poor communication skills (paragraph breaks are friends to us all). Didn't even read it. Didn't have to.

Anonymous said...

I'm middle class. I'm not rich enough to be a Democrat. The Democrat Party is the plutocrat party.

Anonymous said...

Your "training" didn't require the need for focusing, and that concentration, for a little reading, hurt your "brain"? Is this what you're saying? Or did the orderlies catch you using the computer without permission, again?

Better Than Ever said...

@8:32 In a text-based back/forth one needs to adhere to some basic rules of the game. Clear writing, of which paragraphs are a component, is implied & required. The 'word salad' above is an automatic forfeit.

Anonymous said...

I don't know how long Kingfish will allow, but the forfeiture is on your part, not mine. You're running, plain and simple. Like every educated, read "trained", seal I have encountered, when the conversation is removed from your area of "training" you leave the conversation. The reason you leave is that you have confused "training" with intelligence. All you have is "training", your wrong prognostications, along with the missed prophecies of the high priests of the medical community, proved that. That "best minds on the planet" was one of the most ridiculous statements ever made. Good luck to you, you're going to need it.

Anonymous said...

That's one of the main problems with you liberals, you think you make the rules.

Anonymous said...

The very first comment says it all.

Maybe if any of you had bothered to read about the economic effects of past pandemics, you'd " get it". But, no, you assumed only the old,useless folks would die or be impaired so now the younger ones are being hospitalized the Delta variant and you've managed to screw us worse as Delta Plus has started overseas and will indeed make it here.

Feds can't fix what the uncooperative broke.

Better Than Ever said...

@1:49 Thank you. Yes. Not that hard to understand.

As my bio says, by sheer chance I happened to read "Guns, Germs, and Steel" in Jan 2020 right before this blew up. Lots of excellent information in there.

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