Bidenomics, BRICS And US Weakness

The US has a bad case of failed leadership and misguided economic policies.

Joe Biden is an incredibly weak President. I am not talking about his age or his deteriorating mental faculties. I am talking about ordering his attorney general to indict his chief political opponent, Donald Trump. How does the world interpret this weakness? BADLY.

The US has gone off the rails in terms of printing money, particularly since COVID struck and money printing went wild.

Under Biden’s Reign of Error and the US reckless money printing, more countries are abandoning King Dollar (based of fiat currency) and joining BRICS. Brazil, Russia, India, China, South Africa and a host of countries joining like Argentina, Saudi Arabia, Iran, Egypt, UAE, etc.

Now, the rest of the world is still stuck on the US Dollar as reserve currency … for now. But as Biden gets weaker and weaker, watch more countries join BRICs.

According to Reuters, there are over 40 countries that have expressed interest in joining BRICS. A smaller group of 16 countries have actually applied for membership, though, and this list includes Algeria, Cuba, Indonesia, Palestine, and Vietnam. Pretty soon, under Biden’s crazy leadership, we may be the last man standing in using the US Dollar as reserve currency.

Then we have the other shoe dropping with Bidenomics.

Joe Biden, along with most of the media and other Democrats believe in bigger government, higher taxes, and massive regulations.

As soon as Biden took office, he set out to destroy industries that produce reasonably priced energy. He focused tremendous effort on deficit spending and borrowing to hand out “government goodies” to buy votes; recipients of this government largesse, in large part, included debt-saddled students, the green mafia, and leftist activists.

When Biden took office, inflation was under 2%, despite COVID and supply chain disruptions; shortly after, it skyrocketed to over 9%. Now inflation increases are “down” but prices remain exceptionally high compared to pre-Biden.

For example, crude oil prices, which affect almost everything and are used in over 6,000 products, are roughly double what they were when Biden took over.

President Trump focused on reduced regulations and energy independence, and implemented lower tax rates, all moves that greatly helped the American people. In contrast, Biden focuses on ensuring bureaucrats rapidly increase regulations which raises costs for everyday Americans; he’s waging economic war against us. Very few of Biden’s regulations go through Congress. From the White House archives:

Between FY 2017 and FY 2019, the Trump Administration has cut nearly eight regulations for every new, significant regulation….

The Council of Economic Advisers (CEA) estimates that this pro-growth approach to Federal regulation will raise real incomes by upwards of $3,100 per household per year.

Here are some recent reports of how well Biden policies are working:

Leading economic indicators have fallen for sixteen straight months. Maybe that is why people think the economy is moving in the wrong direction?

The current cost-of-living crisis is a manufactured one. As inflation rose, the Federal Reserve was forced to raise interest rates, which saw fewer people move. The cycle is very understandable, as simply explained in this one headline, “Housing Crunch: Home Sales Fall To Six Month Low…But Prices Rise Anyway”.

Parcel volumes are dropping by so much, freight pilots are “worried” about job security.

People are running up credit card debt and defaulting on car loans because of high inflation, and because their real wages haven’t been able to sustain them. Now, even more are falling behind on their payments. From CNN:

More Americans are failing to make payments on their credit cards and auto loans, another sign of rising financial pressure on consumers.

New credit card and auto loan delinquencies have now surpassed pre-Covid levels, according to a Wednesday report issued by Moody’s Investors Service.

After years of promoting and subsidizing electric cars, they represent around 6% of total sales, and demand is clearly slowing. It wasn’t that long ago that well-to-do people were buying these electric toys so quickly that they were placed on waiting lists; now, inventories are building because they are too impractical and expensive:

Auto News understands that there is currently a 103-day supply of unsold EVs in the United States. While it did not specify how many units are sitting on dealership lots, it says there is a higher supply of unsold EVs than any other automotive segment, except those in the ultra-luxury and high-end luxury segments with supplies also reaching over 100 days.

So what is Biden’s solution? Force people to buy them.

Here are some simple economics questions for the media and other Democrats:

Does flooding the U.S with illegals help or hurt housing availability and affordability?

Will the intentional destruction of oil and coal companies help or hurt the middle class and the poor?

Yet, the media and other Democrats brag that Biden’s economic policies are great, and when the public gives Biden poor marks, they say that we just don’t understand, and we’re not willing to get behind a candidate if they fail to make us feel “warm and fuzzy.”

Are journalists really that unaware?

Of course, they always sought to destroy Trump as his policies, even as poverty sank to record lows amongst minorities, because they don’t really care about anything but big government. According to Census data:

In 2019, the poverty rate for the United States was 10.5%, the lowest since estimates were first released for 1959.

Poverty rates declined between 2018 and 2019 for all major race and Hispanic origin groups.

Two of these groups, Blacks and Hispanics, reached historic lows in their poverty rates in 2019.

Results and facts haven’t mattered to the complicit leftist media for a long time.

And perhaps the worst mistake Biden made (amongst his laundry list of horrible mistakes, [Afghanistan retreat, not showing up to E Palestine Ohio, Bidenomics that is a payoff to green donors and BIG corporate interests, an embarrasing visit to Maui two weeks after the fire, indicting his leading political opponent, ….) is the appointment of the WORST Federal Reserve Chair (Janet Yellen) as Treasury Secretary.

Household Essentials Cost Far More Under Bidenomics! Gasoline Prices Up 72%, Rent Of Primary Residence Up 16%, Food At Home Up 20% Under Biden! (30Y Mortgage Rate UP 163% Under “Middle Class Joe”)

Middle class Joe my ^%&!

Joe Biden will always be remembered for lying about never raising taxes on households making under $400,000. Inflation is a permanent tax, mostly on those making under $400,000 per year. And household essentials are up substantially under Biden: gasoline prices are up 72%, rent CPI of Primary Residence is up 16%, and food at home CPI is up 20%! That is a HUGE tax on the middle class.

When mainstream economists and politicians cite “improvements” to the inflation problem in the US in recent months, what they are commonly referencing are changes to the Consumer Price Index (CPI). However, the CPI is not a measure of total inflation, rather, it is a median snapshot of prices at a particular point and time. True inflation is cumulative – A 10% increase one year and a 5% increase the next year is not a win, it means that you are now paying 15% more on average for everything you buy in the span of only two years.

When CPI falls this does not mean that prices on goods and services are going down, it only indicates that prices are rising slower than they were the month or the year before.

Another misconception about CPI is that it measures the inflation rate accurately for regular consumers on common purchases. In reality, the CPI represents mean average price rate increase for a vast basket of goods; over 94,000 items and services with over 200 separate categories. Most of these items and services you will never use or rarely purchase in the span of a year. In other words, inflation declines in uncommon goods can dilute the numbers, making it seem like inflation is dropping while prices on daily necessities continue to spike.

The CPI is weighted according to consumer spending patterns, which is where the calculations can be “adjusted” to a certain extent in an arbitrary manner. Then there is outright government manipulation through various means. As we witnessed recently with the Biden Administration’s claims that “Bidenomics” has defeated the inflation threat, what these reports don’t mention is that Biden has been dumping US strategic oil reserves on the market for the past year. And since energy prices effect the inflation of so many other categories, Biden has artificially manipulated the CPI down using one key resource.

Now that his ability to dump oil reserves has ended, CPI will rise once again along with energy prices.

The point is, it’s impossible to get a sense of the real damage from inflation without looking at the cumulative inflation in necessities (the goods and services that people are required to purchase on a regular basis to live day to day). If we throw out the CPI distraction and look at common necessities since 2020, the economic picture is far more bleak.

Overall food prices have soared by 25%-30% in only three years (again, this means that you are now paying 30% more this year for food than you were paying at the beginning of 2020). Chicken is up from $3 per pound to $4 per pound. Beef is up from $3.50 to $6 per pound. Corn is up from $3.50 per pound to $4.70 per pound. Wheat is up from $5 per pound to $7 per pound. In 2019 the average American household was spending $8100 on food annually; with a 30% increase, in 2023 Americans will be spending at least $10,500 per household.

By the end of 2019, the average rental price of a single family home was around $1450 per month. This year the price is around $2000 per month. At the beginning of 2020, the median cost of a home was $320,000; by 2023 the price skyrocketed to an average of $416,000.

For gasoline, the price in early 2020 was around $2.50 per gallon. The price has fluctuated dramatically due to Biden’s manipulation of the market using strategic reserves, but still remains high today at $3.80 per gallon.

The cost of electricity has risen swiftly, holding steady around .13 cents per kilowatt hour for a decade, then spiking to at least .17 cents per kilowatt hour by 2023.

Remember, most of these costs are static and are difficult to reduce through household spending cuts. These are not items that are easily removed from a monthly budget and the expenditures add up to considerable pressure on consumer accounts. This is probably why around 74% of the public in polls say that the economy is getting worse, not better. It’s because government statistics are not highlighting the true inflationary crisis.

When we look at the cumulative climb of prices in necessities since before the inflation crisis officially began, the truth is that Americans now have to increase their wages by at least 25%-30% on average to maintain the same standard of living they had three years ago. This is a disaster not seen since the stagflationary event of the 1970s and early 1980s. If you have a strange feeling like your bank account is being rapidly drained in recent months, that’s because it is.

And the 30-year mortgage rate is up 163% under Middle Class Joe.

Bidenomics! US Payrolls Were Likely 306,000 Lower Than Previously Estimated (July Jobs Growth Slowed To 2.2% YoY As M2 Money Growth Slowed To -3.7% YoY)

Preliminary benchmark revision smaller than some had projected

Biggest payrolls adjustment in transportation and warehousing

Are you surprised that the Biden Administration has been lying about job creation?? Not really since Biden compulsively lies about everything. Including his corruption.

US job growth was probably less robust in the year through March than previously reported, according to government data released Wednesday.

The number of workers on payrolls will likely be revised down by 306,000 for March of this year, according to the Bureau of Labor Statistics’ preliminary benchmark revision.

Even without the revision, job growth has slowed to 2.2% YoY in July as M2 Money growth slowed to -3.7% YoY.

Let see what our Overlords say at the Jackson Hole Fed symposium.

Burning Down The Housing Market! Mortgage Demand Decreased in Weekly Survey Purchase Applications “Lowest Level Since April 1995”

The Talking Heads said it best. Bidenomics is burning down the housing market. Bidenomincs (or trying to recover from Yellenomics) is responisble for interest rates rising to flight inflation and the collapse of mortgage lending. And she was … Janet Yellen.

Mortgage demand (applications) decreased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 18, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 35 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 30 percent lower than the same week one year ago.

The spread betweenn Bankrate’s 30 year rate at 7.62% and the effective rate on mortgage debt outstanding at 3.595% has exploded as mortgage rates jump.

Today’s mortgage rates are up to 7.49%. OMG!

Bidenomics (code for making large donors wealthier and the middle class getting the boot) and catch-up for Yellenomics (rates too low for too long), and Powell are helping to burn down the housing market.

Lowriding! US Personal Savings Lower Than Pre-Covid As Core Inflation Still Hurts At 4.70% YoY (Large Bank Loan Volumes Shrank Last Week As Deposit Outflows Re-Accelerated)

US personal savings are being exhausted as The Fed raises rates to fight inflation. I call this phenomenon “low riding” where consumers are being punished by The Federal Reserve and Biden Administration.

Meanwhile, large bank loan volumes are shrinking. With money-market fund assets hitting new highs, and banks’ usage of The Fed’s emergency funds facility at record highs, we wonder how much longer The Fed can keep the dream of rising deposits alive (after last week’s massive NSA inflows).

On a seasonally-adjusted basis, The Fed says that total deposits dropped $11BN last week (the first decline in 4 weeks). We also note that the prior week’s inflow was revised higher…

Source: Bloomberg

After last week’s enormous $121BN NSA deposits inflow, last week saw an $11BN outflow (on a non-seasonally-adjusted basis)…

Source: Bloomberg

The gap between SA deposits and NSA deposits remains more manageable (until the next time The Fed decides to fiddle)…

The divergence between money-market fund assets and bank deposits remains extreme…

Source: Bloomberg

On a seasonally-adjusted basis, Small Banks saw $5.6BN deposit inflows last week while Large Banks suffered $28.7BN outflows (with foreign bank inflows of $12BN making up the difference)…

Source: Bloomberg

And so, for a nice change, everything is tidy with domestic US banks seeing deposit outflows on an SA and NSA basis…

Source: Bloomberg

On the other side of the ledger, small banks continued to pump out loans (+$3.56BN, sixth straight week of increases), while large banks saw a $7.4BN contraction in loan volumes…

Source: Bloomberg

So, if The Fed’s data is to be believed, Small banks are ‘winning’ – deposit inflows and making loans; while large banks are leaking – deposit outflows and shrinking loans. All while Treasury prices tumble, stressing small bank balance sheets.

Just remember, the sitting US President Joe Biden goes under several psuedonyms like Robert Peters, Robin Ware, and JRB Ware in his email conversations about Ukraine with his son Hunter. But don’t forget another pseudonym: The Reverend Kane from Poltergeist 2!

Bidenomics In One Chart! Hourly Pay UP 12% Under Biden, But Inflation Is UP 16% (REAL Wage Growth Is -4%)

The themesong of Bidenomics is Randy Newman’s “Mr. President,” Have pity on the working man instead of paying off green energy BIG donors.

The massive green enegy spending spree by Biden and Congress (disguised as Inflation Reduction Act) is the keystone of Bidenomics. Or loadstone.

Since Biden became President, hourly pay has risen 12%! Unfortunately, Bidenomics spending spree (along with endless Fed monetary stimulus) has caused inflation to rise 16%. That is a net -4% decline in REAL earnings.

10-Year Treasury Yield is now 4.28%, the highest level since October 2007. From a total return perspective, the 10-Year Treasury Bond is now down 1% in 2023, on pace for its third consecutive negative year. With data going back to 1928, that’s never happened before. BUT we’ve never had Joe Biden as President before 2021.

And then we have the Conference Board’s Leading Economic Idicators, sucking wind.

Welcome to Bidenomics!

Global Treasury Yield Hits 15-Year High, Back To 2008 Despite No Change In Industrial Production (REAL 10Y Yield Now Highest Since 2009, Approaching 2%)

This is very strange. Global Treasury Yields just rose to a 15-year high (2008). This is primarily due to Central Bank moneta

And REAL 10-year Treasury yields also the highest since 2009.

At the same time, US industrial production is at the same level as pre-financial crisis (2007). Despite Federal Reserve monetary stimulypto (remember, The Fed’s balance sheet remains abouve $8 trillion.

This is Obama/Biden/Yellenomics. Trillions of dollars of fiscal (green) stimulus and monetary stimulus only to have industrial production be at the same level BEFORE The Great Recession and financial crisis.

July’s US Industrial Production … Returns To 2007 Levels Despite Staggering Fed Monetary Stimulus And Federal Government Spending Spree

Well, its now August 2023 and US Industrial Production for July increased … to 2007 levels. This comes after the massive spending out of Washington DC and massive Federal Rerserve stimulus.

Is that all there is??

US Industrial Production is DOWN -0.23% YoY while up slightly in MoM terms.

As I said a couple of days ago, the Obama/Biden economic model is a Soviet/Chinese Communist Party (CCP) style of COMMAND economics, not free market DEMAND economics.

As if dimwitted Mean Joe Biden has a clue.

Kind Of A Drag! Rates On 30-year Mortgages In US Now Highest Since 2000, at 7.53% (UP 153% Under Bidenomics)

As The Buckinghams crooned, the mortgage market is a kind of a drag.

Rates on 30-year mortgages in the US are now the highest since 2000, at 7.53%. Mortgage rates are now up 153% under Bidenomics. Rates have gone from sub 3% to above 7.50% under Inflation Joe.

US Treasury yields are playing catch-up from Yellen’s “Too low for too long” monetary policies.

Yes, in part we are playing catch-up from Yellen’s Reign of Error as Fed Chair (keeping rates too low for too long). Only in Washington DC, does gross incompetance warrant a promtion to US Treasury Secretary. Career half-wit Mean Joe Biden is El Presidente and acting like a third world dictator.

Dark Side Of Federal Stimulus! Checkable Deposits Soared For The Top 1% In Terms Of Wealth Compared To Bottom 50% (The More The Fed Prints, The Wealthier The 1% Becomes)

Yes, there is a Dark Side to Federal stimulus! And it isn’t Dark Side of the Moon, but the dark side of who benefits from Federal stimulus. Its all about money.

Example? Take Checkable Deposits of the to 1% (blue line) of wealth compared to the bottom 50% of wealth (red line) after The Fed cranked up monetary stimulus to combat the Covid shutdowns.