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2018-02-14 09:33 by Karl Denninger
in Consumer , 144 references Ignore this thread
CPI Rattler
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I love it when the lie factory comes unraveled.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.1 percent before seasonal adjustment.

May I note that there is no seasonal adjustment on an annual basis since January is January every single year.  The Bureau of Lies and Scams tripped over themselves and emitted a truth for once -- they lie, repeatedly and intentionally.

Betcha didn't notice.

Nonetheless there were some large movers in the data.  One you almost-certainly know about -- gasoline and diesel.  But one you probably don't pay attention to (unless you are in the Northeast) fuel oil, which, I remind you, is chemically identical to diesel.  That is up nearly 25% annualized.

And what does diesel move?  Damn near everything in the economy.

Do remember that one of the siren song warnings in 2007 was the sharp move in fuel.  Not just gasoline, diesel.  Yes, it was of course precipitated by the same sharp move in oil prices, but do not stick your head in the sand on this one; it's real, it's a real drag on the economy and no, it's not positive no matter how loudly some market "callers" will claim otherwise.

The other stunner is car insurance.  I've warned on this one before; up 8.5% annualized, and 1.2% last month.  Then there's shelter, mostly rent -- up 3.7%.  Gee, is that all price or are real estate taxes part of it too?  You know damn well which is the case.

Hospital "services" are claimed to be up 6% annualized, which I might remind you means the cost doubles about every 12 years.  How many more doublings do you think we can take in the federal and state budgets?  And, by the way, that's just services, which are all soft numbers -- in other words bloating the staff of same with people who never provide a single second of care to a single person of course reflects back on service cost.  But that's a "good thing", we're told, in the employment report.


Incidentally if you're wondering what technological advancement should do to medical care, since it's all in some way technology based these days, absent illegal cartel behavior please look here:

That would be a nearly-11% decrease annually in Televisions, which has been going on more-or-less constantly for a couple of decades, and a similar and even more dramatic decrease in audio gear.  The simple fact is that the definition of technological advancement is doing more with less and that reflects directly into prices.

Unless you're an illegal cartel, which the entire medical and dental system is, and if the government will not stop it then it all ought to be burned to the ****ing ground by the people -- and it would be if the people of this nation could find two working neurons to rub together which, it is quite clear over the previous couple of decades, they cannot.

Good luck folks -- you're gonna need it.

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User Info CPI Rattler in forum [Market-Ticker]
Posts: 7930
Incept: 2007-09-10

Scottsdale, AZ
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Been calling for them to show insurance cost increases for over 2 years now. Their bond portfolio's have to be crushed yielding almost nothing. Time to go after the policy holders to justify their over priced stocks.
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The People's Republic of New York
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@Aztrader, perhaps this is more fallout from Zirp. if they cannot make money on their portfolio in a mostly liquid financial product or a laddered one, they must increase premiums to be solvent.

There are two ways to be rich: One is by acquiring much, and the other is by desiring little.
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There was a big premium on diesel for a long time, then it went away. It's back. I believe the price of diesel is an economic barometer, as it is a worldwide commodity.

Auto insurance is probably linked to the weather disasters across the south. Insurance is a racket few understand, as the game is set up where they never give back a portion of your premium, though they set the premiums against experience. If the pool is drained, there is no insurance. Yet, 2016 and 2017, we had widespread hail across the north Dallas region. Houston had a massive number of cars flooded, which are total losses. Damage was such it put a floor under a weak national used car market.

Taxes are another matter. My taxes have gone up about 50% in the past 3 years. We have rental properties, where there is no restriction. Some can be passed on, but others, I have to eat. Rents have levelled out for the short term, as there have been a massive number of apartments built the past 18 months.

The canary in the coalmine is the rate of interest. Rates should have never been under 1% on money or 3% on capital. The mess that has been created by this function of intervention has not been seen yet. I suspect the currencies around the world will have to be recast before all is said and done. How Japan ever extracts themselves out of the mess the BOJ and government have created, I don't know. They are now a country with massive private assets now under control of the Bank. Where does that stop? The only saving grace the US might have is the rest of the world is even farther down the hole. We can thank Greenspan and Bernanke for this, though the debt money, fiat system has never stood before. Can we expect the end result to be any different this time?

The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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