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2021-11-23 07:00 by Karl Denninger
in Federal Reserve , 586 references
[Comments enabled]  

Biden has chosen, and Powell will be re-nominated for a second term.

Yes, the same man that has sent prices skyrocketing by backing Congressional "dump credit and pray" policies.

Of course he's popular in Congress, with good cause.  If he had said "Go to Hell" instead the choice would be 6% interest rates at the short end or Congress would have to cut it out.  I remind you that a 6% short term interest rate means about 8% on the longer end of the curve, mortgage rates about the same and the ability of the US to continue to fund its debt binge gets cut off.

So what now?

Well, the same choice is still there.

But there's a problem with going along with it beyond his confirmation, which I expect will be a perfunctory matter: If he doesn't tell Congress to go to Hell in the coming year inflation risks getting wildly out of control on a feedback basis, at which point he and Congress both get riots and possible civil unrest at a level that cities burn.  If he does tell Congress to "go to Hell" then he gets all manner of finger-pointing, the market stops playing "nice" for indebted companies (that's most of them), the scam-someone firms (that's a lot of them) blow up entirely and the Democrats lose half their seats in the midterms.

I love watching someone sit on their own pile of logs that they doused with gasoline while people walk by and flick cigarette butts at them.

Sooner or later someone's going to flick one that still has hots on the end of it.

Here we go.

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2021-11-18 19:59 by Karl Denninger
in POTD , 473 references


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2021-11-11 07:00 by Karl Denninger
in Macro Factors , 723 references
[Comments enabled]  


The all items index rose 6.2 percent for the 12 months ending October, the largest 12-month increase since the period ending November 1990. The index for all items less food and energy rose 4.6 percent over the last 12 months, the largest 12-month increase since the period ending August 1991. The energy index rose 30.0 percent over the last 12 months, and the food index increased 5.3 percent.

Note the graph.  Note also that the start of this was roughly March of this year.  What have I said for over a decade: Policy changes require about a year to 18 months to show up in the CPI.

When did we start throwing money at the problem?  In March of 2020 and who did that?


When did the problem show up?

Almost exactly one year later.

What else does this tell us?

If we stop today, and we're not with one big spending bill already passed and another on deck, it will be another year, at least, from the time we stop until the stupid begins to subside.

Of particular harm to consumers in the tables are:

  • Piped gas, up 26% from last year.  You don't heat your house with natural gas, do you?
  • Fuel oil, up 59% (!!!!!) from last year.  God help you if you need heating oil.
  • Gasoline, up 49.5% from last year.  You don't use that, do you?

Food was a "piker" by comparison, up "only" 5.4%.  Of course if you're not well-off you spend a wildly-disproportionate amount of your money on food.  Between that and trying to stay warm this winter you're screwed.

Food inflation was particularly bad this month, up 1% on the month alone.  That's a 13% run rate annualized.

Don't think you get away from this with the power bill -- it's up 6.5% from 12 months ago and a huge part of that is the demand to keep going toward "green" energy sources, which are wildly more-expensive and less-reliable.  Thanks Joe.

Healthy (that is, protein and fat based foods) were up double-digits almost without exception.  Ham and Chicken managed to remain under 10%, but not by a lot.  Obesogenic foods such as potatoes were only up 1.7% and candy was up 1.6%.  Have some more dieeeeeebetus peasants!

Propane is a monster kick in the nuts as well, up 34.7%, along with firewood and kerosene.  Who uses those?  Rural people, mostly.  Congratulations to Brandon there, along with the rest, but don't feel singled-out as the city and suburban dwellers got bent over the table on natural gas also.  We must spread the love, you know, whether you want it or not.

Hope you don't need appliances; they're up big too, especially minor little things like a washing machine (14.9%.)  Laundromat owners rejoice -- and add another slot to the coin drop.

One bit of good news: If you drown your sorrows and remorse for cheering on all this stupidity in the bottle that's only up 2.2%.  A bargain, up until it destroys your liver of course.

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2021-11-09 09:13 by Karl Denninger
in Interviews , 216 references
[Comments enabled]  

Come and get it!

The reality is, that Congress has spent the last two years violating every legitimate rule of reason to monetary and fiscal policy. They have pumped 8 trillion dollars of unbacked credit into the system in the last 18 months…so, of course, inflation is going through the roof.  This week on Retirement Lifestyle Advocates radio, your host, Dennis Tubbergen, is joined by frequent guest, Mr. Karl Denninger.  They discuss inflation, labor shortages, and the probability of this degenerating into essentially uncontrolled violence if our government doesn’t correct the damage they’ve done.

Listen to the podcast, which aired on November 7th in SW Michigan, here.

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2021-03-13 09:39 by Karl Denninger
in Stupidity , 554 references
[Comments enabled]  

Doc: Thank you for registering for the Covid-19 vaccine; your turn has come!  Roll up your sleeve please.

Victim: The CDC, my governor and health department all say it's perfectly safe, effective and tested.  Is this true?

Doc: Oh absolutely.  The FDA and your government would have never allowed it otherwise, and I'm sure of it (swabs arm with alcohol)

Victim: I'm very happy to hear that sir; you see, my son likes me quite a lot, and he's rather concerned about the safety of these vaccines.  He's waiting for me out in the car and before I came in he swore to me that if you're lying both you and your wife will be the guests of honor on over our fire pit this evening -- on a spit.  Having been his primary male influence since he first came out of my wife's vagina and knowing full well he's not an NPC like you've made so many other people into with your previous crazy pronouncements on masks, distancing and such I happen to believe he means it.  He also just spent his $1,400 stimulus check on cases of BBQ sauce, a big pile of charcoal and a really nice set of butcher knives.  Thank God Biden provided him with the means to do that; after all, he did lose his job when the bar he used to work at as a bouncer was forced closed because of the Coof.


Doc!  Why you running away doc?  I thought you were going to give me the safe and effective Covid-19 jab!


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