Friday, June 10, 2022

The Return of W.I.N.

 The inflation numbers are out this morning and they confirm what was feared.  Inflation is the worst it has been in 40 years as it rose to 8.6%. Unfortunately, President Joe Biden is doing everything but passing out W.I.N. buttons as he continues to bring back the 70's.   Two economists predicted over a year ago on the pages of the Wall Street Journal that we would experience such inflation.  Invesco economist John Greenwood and Johns Hopkins University Professor Steve Hanke opined again on the problem in a letter to the WSJ this week:

The lead paragraph of President Biden’s op-ed “My Plan for Fighting Inflation” (May 31) asserts that the global economy faces an inflation problem exacerbated by Vladimir Putin’s war in Ukraine, high oil prices and supply-chain problems. This line of argument shows why the president’s team and the experts at the Federal Reserve were unable to anticipate the inflation conundrum that their economic missteps have forced us into. It also shows why the president’s plan will likely fail to allow us to exit inflation with a smooth landing.

We don’t have a global inflation problem. Inflations are always and everywhere a monetary phenomenon spawned by the creation of excess money by local central banks. China, Japan and Switzerland also face elevated oil prices, supply-chain problems and fallout from the war in Ukraine, but their annual inflation rates are 2.1%, 2.5% and 2.5%, respectively. They have avoided the ravages of inflation because their central banks haven’t produced excessive quantities of money.

Adherence to the tenets of monetarism is nowhere to be found in the Biden White House or the Fed. Chairman Jerome Powell has stressed that we had to “unlearn” monetarism. It looks like Mr. Biden was an attentive student. The word “money” doesn’t even appear in his plan to whip inflation. As he said in 2020, “Milton Friedman isn’t running the show anymore.” As long as Friedman and monetarism remain canceled, the White House and the Fed will be grasping for straws.

Prof. Steve Hanke and John Greenwood

Johns Hopkins University

Baltimore and London

 Check out the chart for M2 (Money Supply) posted below.  The chart ends in March.  M2 is 36% higher than it was in March 2020, 50% higher than it was in March 2019, and 9% higher than a year earlier. 

What does it all mean? This:

The Washington ____'s Heather Long dished out the inflation dirt this morning:




Unfortunately, inflation will probably get worse.  Former PIMCO star Mohamed El-Erian tweeted: 

Every US #CPI #inflation measure came in higher than consensus expectations. Amplifying the economic/social/political discomfort, headline is a new high for this inflation cycle. Also, if the first 10 days of June are anything to go by, the next monthly measure would be higher.

As long as more money is dumped into the economy, inflation will not grow but mushroom.  Our two economists predicted this would happen in the Wall Street Journal a year ago: 

The inflation upticks aren’t temporary and were predictable, driven by an extraordinary explosion in the money supply. Since March 2020, the M2 has been growing at an average annualized rate of 23.9%—the fastest since World War II....

According to monetarism, asset-price inflation should have occurred with a lag of one to nine months. Then, with a lag of six to 18 months, economic activity should have started to pick up. Lastly, after a lag of 12 to 24 months, generalized inflation should have set in. That’s the standard monetarist sequence, and it’s been followed to a T....

money supply (M2) should be growing at around 6% a year for the Fed to hit its inflation target of 2%. With M2 growing at nearly four times the “ideal” rate since March 2020, inflation is baked into the cake, and it’s likely to persist. By the end of the year, the year-over-year inflation rate will be at least 6% and possibly as high as 9%...

Some who like to throw cold water on monetarism argue that the velocity of money has collapsed and will mitigate the inflationary impact of the rapid growth of the money supply. While velocity did collapse with the onset of Covid, it’s on track to pick up until the end of 2024. Consequently, velocity will grease the monetary wheels. That’s why inflation might hit the high end of our forecast range... Essay.


Anonymous said...

Meanwhile Bennie Thompson is chairing the 3rd witch hunt on an ex-president while his district, one of the poorest in the nation, deals with this inflation and gas prices. #tonedeafdemocrats

Anonymous said...

Geriatric Joe does not give a damn about average working Americans, who by and large fund this country. His administration is doing everything within its power to push the climate change/one world order/liberal agenda that is going to be the eventual death of the middle class in this country. His like wants about 95% of us solely dependent on the government.

Anonymous said...

If we're bringing back the 70's, can we at least make basketball watchable again?

Anonymous said...


Anonymous said...

The sad thing is that most Americans are simply too ignorant to research what is going on. This is all by the design of the Davos crowd.

There is a plan for massive human depopulation of huge parts of the planet followed by the concentration of the population into urban centers. They don’t say *how* they are going to convince everyone to live in commie apartment blocs. But the plan for Net Zero 2050 requires it. They have thousands of documents and roadmaps published on with all of their plans, but CNN and Fox News don’t talk about it, so nobody knows. Perhaps it is going to be NEOM.

What is NEOM? Saudi Prince Mohammed bin Salman (MBS) is working with Klaus Schwab to build a prototype of one of these Net Zero cities, but for the rich and powerful. It is called NEOM and perhaps it is supposed to be like Tesla Motors and become a status symbol make everyone *want* to live in cities like NEOM just like the rich and famous.

The WEF Net Zero planners have published global maps of how most of the planet will be nature preserves and the only agriculture will be restricted to the “human zones” surrounding the mega cities. Travel between human zones will be via electric rail only. And air travel will be a rare and expensive privilege for only the most the plebs. Of course, TPTB will have unrestricted air travel and will rarely interact with us.

Anonymous said...

@9:58 AM

He doesn't give a damn about anything because the man is a total puppet. One day it will all come out that this was our country's "Weekend at Bernie's" presidency. The Democrats and the establishment Republicans propped up the old dementia ridden white guy because they realized in mid-February 2020 if they didn't none of the other nuts running in the Donkey primaries was going to unseat Trump.

If you haven't already, do everything in your power to pay down as much of your debt as rapidly as you can because if you don't you are dooming yourself and family to what is about to happen. This country is about to understand that the Great Reset is really the Great Taking that will destroy the wealth of our middle class.

Pay off your debts. Sell everything you truly don't need for whatever you can get for it. Purchase your first, or another, defensive shotgun. Then hold on.

Anonymous said...

10:42 (1) here
I meant to say And air travel will be a rare and expensive privilege for all but the most obedient plebs

Anonymous said...

I saw Barbie Bassett on the noon report last week telling us that the Federal Reserve is warning Americans about the enormous dangers of cryptocurrency scams. She went on to read from the teleprompter that the Fed bank is stating that there is little they can do since current decentralized cryptocurrencies do not fall under the control of central banks. This type of predictive programming is a neat trick. Keep telling the people that the NEED a central bank digital currency (CBDC) and then create the crisis to swoop in and save everyone with your new central bank digital currency!

Does these talking heads even know what they are saying?

Anonymous said...

Bennie is doing the democrats dirty work. It’s bad when Bernie sanders tells you that your going to get your a$$ kicked
Even he sees Latino and. Lack support going to the Republicans this nov. I read about it in the liberal magazine the Atlantic. I don’t subscribe but a lot of my Fondren neighbors do and I often get there copy.

Anonymous said...

This catastrophic inflation cycle is only inevitable. We haven't had a fiscally conservative administration in decades and we have the worst giveaway fiends in charge now. Bush was an empty suit, Obama was a star-struck gold-digger, and the self-centered Trump is/was not a fiscal conservative either. Everyone knows it will take real discipline to control this monster and the present generation lacks the will. Have we also run out of practical leadership?

Anonymous said...

If you posters think inflation is bad now (it is), just wait until you try to buy some more tinfoil for your next set of conspiracies. You act like Trump’s complete f’ up of the initial Covid response and 2020 federal government money dump to get him reeelected had no role in the current economy. Biden is merely the other side of the Trump coin, one begat the other and neither is a leader.

But hey, see the half you want.

Anonymous said...

Joe does not know any better. He has been on the government dole all of his life. That added to his dementia has put our country in trouble. He is listening to that small voice in his ear. The person behind that voice would like to see the U.S. drop down to a third world level.

We need someone who will put the country which elected him in front of the needs of other countries. Joe was not even elected. The news media chose him. Midnight voters elected him. We will pay the price for our crooked elections.

Kingfish said...

Never said otherwise. M2 started going up in 2020. I assume the readers, including you, have enough sense to figure out who was in charge them. Don't forget the Fed either.

Anonymous said...

@10:42- regarding NEOM cities in the future- Will RINOs,JPS school teachers,democrats, commies, and , Covid sheep be allowed there? Will there be plenty of tin foil?

Anonymous said...

False flag.

Rates are not rising at all compared to wage growth and real property value increases.

Wages are jumping and unemployment is near zero.

Anonymous said...

At least we don't have any "mean tweets"! Damn, i feel so much better already!

Anonymous said...

10:42 - Do your friends at work call you Mr. Acronym? Tell the truth, now.

Whoever told you acronym obsession is a sign of intelligence flat out lied to you.

Some crazed man said...

When are people going to wake up and realize the president doesn't control the money. The money we use in this country is privately owned.

You/me/we are debtors. Every dollar printed is printed from a deficit. If you have a note with a financial institution, it means you owe that institution, you are in debt, and it is impossible to get out of debt.

Why is it impossible to pay the debt, because you have no money of your own. If you have actual "dollar bills" look at the top it says Federal Reserve Note, that is the owner of that instrument.

The "Great Reset" as they call it will be the central banks of the world calling for the payment of all out standing debts, public and private. The world debt to the central banks is so great that all the assets of the entire world, if sold, would not pay the debt and the interest that is owed.

Klaus Schwab is quoted as saying, you will own nothing and be happy. The truth is, you can not own anything now.

Anonymous said...

"local central banks" found twice in this article.

I always thought two of those three words were mutually exclusive. But, I reckon not.

Anybody who believes Biden and Trump are two sides of the same coin are really out of touch. The only similarity being both have a hair fetish....the minor difference being its location.

Anonymous said...

Kingfish is right. We started seeing inflation in 2020, just not in consumer goods. When Trump was in office, the US was the #1 oil exporter in the world, which kept fuel prices and the prices of consumer goods down. Inflation then was largely limited to the stock market. The when Sleepy Joe stole the election, he shut down domestic oil production overnight causing oil prices to surge. Instead of producing our own oil, we decided to compete with every other country for oil from the Saudis and Russians. This also gave Putin the money he needed to invade Ukraine.

This problem could be fixed overnight if we would just produce oil again like we were, but that won't happen under this administration. Don't expect the RINOS in Washington to do anything about it either. The majority of republicans are just as bad as the democrats. The minute Jerome Powell said the inflation was transitory, I lost all faith in the Federal Reserve. And Janet Yellen is just as bad. She said last week that inflation will probably continue to go up, but she hopes it doesn't. WTF? Where do they find these idiots?

Anonymous said...

How geriatric must a boomer be, to call aluminum foil, “tinfoil” in the current year? 😂

Anonymous said...

Wait a minute here! I remember hearing that 18 Nobel Prize winning economists said that crazy Joe was right on and that his Build Back Better debacle was the was going to steam roll America back in the lead around the world. Joe wouldn’t have lied to us now would he?

Anonymous said...

@11:32 - This is all on Biden. Experts agree.

"Yellen Wanted Biden Relief Plan Scaled Back, Biography Says," Jan. 5, 2022, Bloomberg.

"Former Obama official rightly slams Biden for 'extraordinary policy mistake' on inflation," Apr. 16, 2022, MSN News.

"U.S. Inflation Spiked Due to Government Spending According to Fed Study," Mar 30, 2022, Valuewalk.

"Economist Larry Summers says White House misread inflation," Nov. 11, 2021, The Hill.

"A Regional Fed Analysis Suggests Biden’s Stimulus is Temporarily Stoking Inflation," Oct. 18, 2021, The New York Times.

"Larry Summers sends stark inflation warning to Joe Biden," May 27, 2021, CNN.

Krusatyr said...

Trump protected our Southern border from illegal peasant hordes, intimidated our enemies into submission, made our foreign friends pony up for their own defense, restarted USA manufacturing, stimulated America-First foreign trade, rebuilt military deficiencies, established energy independence and enabled all Americans an opportunity to strive for prosperity.

That's really all any President has to do but Bubbles Biden, a kick-back compromised and cognitively challenged socialist crook, will have none of it.

Anonymous said...

Man, reading this thread makes me believe we’ve been invaded by aliens.

Anonymous said...

We have been invaded by aliens, but they aren't called that anymore. We now refer to them as undocumented migrants. Catch up to the times.

Anonymous said...

Man, reading this thread makes me believe we’ve been invaded by aliens.

Reading your comment it convinces me you do not possess even the bare minimum of argumentation skills required to refute any of the opinions above.

County Cletus said...

In 1913 the long game began and it’s about to happen learn how to barter idiots.

Anonymous said...

Milton Freidman "Inflation is everywhere and always a monetary phenomenon". Period. Inflation is not defined as rising prices, rising prices are a symptom of inflation. Nor does our government print money, which would cause inflation. It's much worse. Our government cannot issue its own currency (print money), it must borrow money into existence from the Fed, at interest, which is a private banking corporation It is astonishing how few understand this. In fact, we have no money. What we use for money is a debt owed to the Federal Reserve Corporation. Look at a one dollar bill. It is a Federal Reserve Note. What does a note represent? A debt. Duh. It isnt all that difficult.

Anonymous said...

Just imagine the inflation if the democrat's $3.5 **TRILLION** "Build Back Better" Act had passed.

That money printing would have melted the printing presses.

It should have passed. With a democrat president, a democrat house, and a +1 democrat senate, the money printing dam should have broke. Unbelievably, the legislation fell exactly one. vote. short.

Thank God for Joe Manchin.

Anonymous said...

The commenters blaming inflation on the Fed and not Sleepy Joe are correct. Even before the current spike, inflation has been an insidious hidden tax on us all. It’s like the proverbial frog in the pot of water. The elites want us to think a slow rate of inflation is somehow a good thing for the economy but a rapid spike is not. This is nonsensical. If one could save money in a piggy jar for 40 years and that money have the same buying power when one retired, one could afford to retire. The Federal Reserve benefits the international bankers and our criminal government, not the taxpayers or the economy.

The advice to pay off all debt was dead right. Also stock up on food and essentials as prices will co to or to escalate. Grow some food even if you only have a few square feet to do it in. It’s going to get really ugly. Best have weapons and a sufficient ammo stock as hungry homeless people will want what you have.

Anonymous said...

Kim Dotcom of all people, recently broke it all down. Each taxpayer in the US is over $2 million in debt on the hook to the Federal Reserve, for the national debt.

Whatever you might think of the “crimes” of Kim Dotcom, he is still a genius and internet icon.

Anonymous said...

7:06 AM, It is not the people of the U.S. that is over $2 million in debt. It is the politicians who borrowed the money and wasted it. The people in the U.S. sends their tax money every year. The politicians are not satisfied with all of the money we are taxed. They have found another source to focus their skills of theft on. They borrow the money and want others to pay it back for them. You would almost think all politicians borrowed money to go to college.

Anonymous said...

6:50 pm is right.
And, the Trumpsters ignore that tariffs lead to inflation( it's not instant folks) as does "gouging" that we are seeing in 1000% price increases and triple profit increases thanks to GOP "deregulation" as well as decreases in the budgets to pay those "regulators" who are left.
Maybe no one should be able to go to college until they comprehend basic economics. It's not that damn hard people.

Anonymous said...

I suggest everyone google Weimar Republic inflation and prepare accordingly.

I have been reading the opinions of various noted economist, and some not so well known. They all seem to agree there is nothing that can be done about the rate of inflation. That is very troubling.

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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

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