Thanksgiving Dinner Staples Are Low in Stock Thanks to Supply-Chain Issues And Federal Policies (Foodstuffs UP 36% From Last Year)

Combine vaccine mandates that lower the workforce and the flood of economic and monetary stimulus by the geniuses in Washington DC, and we have a Thanksgiving problem.

The supply-chain crunch is about to hit another part of American life: Thanksgiving dinner.

Supplies of food and household items are 4% to 11% lower than normal as of Oct. 31, according to data from market-research firm IRI. That figure isn’t far from the bare shelves of March 2020, when supplies were down 13%.

For grocery shoppers this holiday season, it means that someone with 20 items on their list would be out of luck on two of them.

Although U.S. supermarket operators started purchasing holiday items early, aiming to avoid shortages, many holiday essentials are already in short supply.

Turkeys are very low in stock. By the end of October turkeys were over 60% out of stock—lower than the same time last year by more than 30 percentage points. A spokesperson for Butterball LLC, one of the largest U.S. turkey processors, said the company has been experiencing similar labor and supply challenges as other organizations and industries.

Even if you can find a turkey, prices on foodstuffs in general are up 36% from last year.

And to get to the grandparents’ house of Thanksgiving, gasoline prices (regular) are up 24.5% from last year.

You can always shop at Neiman Marcus for a half Thanksgiving dinner for … $376 + $32 shipping. Not for the average American, more for NYC and DC elitists like Biden’s OCC nominee Saule Omarova who wants to bankrupt energy companies.

Biden could lower inflation by 1) stop mandating vaccines, 2) stop shutting off energy pipelines and oil exploration, 3) stop spending trillions of dollars other than Social Security, Medicare and defense.

Frankly, Thanksgiving has gotten so expensive due to Biden’s Reign of Error that I am thinking of alternatives to turkey. Like a Jersey Mike’s turkey and provolone sub.

Inflation Prints Hotter Than Expected (6.2% YoY)

My heart goes out to households living on a pension. And households who are not in the elite 1% class of Americans. Particularly if they rely on The Federal Reserve and Federal government to keep inflation low.

Inflation (as measured by the Consumer Price Index) rose to 6.2%.

Yes, a large chunk of inflation is thanks to the green American lobby who want energy prices much higher. Due to the chip shortage, we have used cars and trucks soaring in price at 26.4% YoY growth.

Then we have my least favorite, most misleading inflation measure: shelter. According to the BLS, shelter rose “only” 3.5% YoY. Odd since home prices are growing a 20% YoY clip.

I know, I know. The media talking heads will say “temporary price increases.” Even with all the money pumped into the economy??

I know, I know, (CNN)President Joe Biden said Wednesday that inflation statistics showing America’s prices are surging more than they have in 30 years are proof that there is “more work to do before our economy is back to normal.”

Then stop printing money and slow down your terrible crony spending policies!!!

Tuff Enough? Can US Consumers Stand Biden’s Energy Policies? (West Texas Crude UP 58%, Regular Gasoline UP 43%, Heating Oil UP 54% Since Biden Inauguration)

President Biden wants to know if you are Tuff Enough to stand rapidly rising energy prices as he shuts down American supply?

Since Biden’s inauguration, West Texas Intermediate crude prices have soared by 58%, regular gasoline prices have soared by 43% and heating oil has soared by 54%.

How do you spell Federal energy policies? M-O-N-E-Y!

Meanwhile, US households are told to put on more blankets and drive less while the DC elites (like Obama, Kerry and Yellen) fly around the world in fossil-fuel guzzling jets lecturing everyone on the need to get rid of fossil fuels.

Odd, since annual CO2 emissions have declined significantly from 2007 levels.

The face of Biden’s energy policies. Blah-blah-blah.

The Inflation Tax Levied By The Federal Government Rose To 8.62% In October (Biden Interviews Brainard For Fed Chair Position)

Now that President Biden is interviewing Lael Brainard for Federal Reserve Chair, I am really getting a peaceless, uneasy feeling that The Fed will NEVER raise rates and inflation will be perpetual. To whit, …

Prices paid to U.S. producers accelerated in October, largely due to higher goods costs, fueling concerns about the persistence of inflationary pressures in the economy.

The producer price index for final demand increased 0.6% from the prior month and 8.6% from a year earlier, matching forecasts, Labor Department data showed Tuesday. The annual advance was the largest in figures back to 2010.

Excluding the volatile food and energy components, the so-called core PPI rose 0.4% and was up 6.8% from a year ago.

Prices paid to U.S. producers rose in October, reflecting in part higher energy costs

More than 60% of the headline increase was due to goods, which jumped 1.2%. Higher energy costs, including that for gasoline, drove the gain. The cost of services rose a more moderate 0.2% for a second month, reflecting a further pullback in the cost of securities brokerages and investment advice.

The report underscores how transportation bottlenecks, materials shortages and increasing labor costs have sent prices soaring across the economy in recent months. Trucking freight costs jumped a record 2.5% from September.

Inflation is a tax created by printing too much money and stupid Federal economic policies (or follicies).

Lael Brainard? Discussing the chairmanship with Brainard could signify that the Biden team is weighing how a break with Powell might help advance their goals for the central bank. Brainard and Powell work closely together on multiple issues and are viewed as holding similar views on monetary policy, but she’s favored a tougher stance on big banks.

Remember, The Federal Reserve is a privately-owned entity independent of The Federal Government. A Brainard appointment would make The Fed the financing arm of the Democrat Party.

Where The Fed Sits In One Chart (Taylor Rule Hints At Target Rate Being 8.80% Instead Of 0.25%)

With The Federal Reserve leaving its target rate at 0.25%, but hinting at a tapering (slowdown) of asset purchases, I thought it would be good to present where The Fed sits at the moment.

You can see the rise in the effective Fed Funds rate from 2016 to early 2020, then KABOOM! COVID struck, the effective Fed Funds rate crashed while The Fed dramatically increased their purchases of Treasuries and Agency MBS. Both Treasury and Agency MBS purchases are projected to decline by mid-2022. The Fed’s target rate (purple line) is project to rise to 1% after 2023.

Where SHOULD The Fed Funds Target rate be? How about 8.80% instead of 0.25%.

So we still have over-stimulypto with The Fed projected to raise rates at a snail’s pace.

Face it, Wall Street wants interest rates low, even if inflation burns out of control.

The Fed’s Folly Of Full Employment (Real Hourly Earnings Growth At -0.814% YoY, Labor Force Participation Remains Below Pre-Covid Levels)

If The Federal Reserve is actually looking to achieve full employment in the USA, then it is a fool’s errand.

Today’s jobs report is both good and bad. The good news? 531k jobs were added, more than expected. The U-3 unemployment rate fell to 4.6%, also better than expected.

The bad news? REAL average hourly earnings growth “rose” to -0.8141% meaning that inflation is outpacing wage growth (despite what Joe Biden said yesterday).

Look at labor force participation both in October and before Covid. After the large decline in LFP, it rose again then leveled-off to near where it is in October 61.6%.

Here is the rest of the story. Zero Hedge had the enticing headline of “October Payrolls Soar To 531K, Smashing Expectations As Prior Months Revised Sharply Higher”. Too bad inflation is eating away at the gains.

Biden: “We have increased labor force participation by inches.”

Employment in leisure and hospitality increased by 164,000 in October and has risen by 2.4 million thus far in 2021. Over the month, employment rose by 119,000 in food services and drinking places and by 23,000 in accommodation. Employment in leisure and hospitality is down by 1.4 million, or 8.2 percent, since February 2020.

Hey bartender!

Here is a video of The Federal Reserve being awakened by the banking crisis in 2008 and again due to COVID.

Ethereum Is A Runaway Train! $4,358 Versus $129 On April 1, 2020 When COVID And The Fed Struck

Cryptocurrencies are a runaway train. In particular, Ethereum has gone from $129 on April 1, 2020 to $4,358 today.

Yes. March 2020 is when Covid struck and The Federal Reserve counterattacked.

Has volatility increased for the cryptos? Of course. The skew to the upside is steep on Bitcoin.

US Labor Productivity Output Plunges To Carter-era Stagnation Levels As Unit Labor Costs Soar

The last time we saw US labor productivity out per hour this low was in 1981 when President Reagan inherited stagflation from President Jimmy Carter.

As unit labor costs soar +8.3%.

Any wonder that the 1% have been doing so well relative to the bottom 50% in terms of wealth since entrance of The Fed in 2008 with zero-interest rate policies (ZIRP) and assets purchases (QE). And also after Covid struck.

“That will be $10,000 for your Big Mac, fries and a soda, please!”

What To Expect Today From The Fed Open Market Committee (No Rate Change, Slight Decrease In Asset Purchases As M2 Money Velocity Collapses And Real Hourly Earnings Growth Is Negative)

From The Land of 1,000 Excuses, The Federal Reserve Open Market Committee (FOMC) will announce … no rate increases and a slight reduction in their assets purchases (Treasuries and Agency MBS). The announcement will be at 2pm EST (not at The Midnight Hour).

The Federal Open Market Committee is all but certain to hold rates near zero after a two-day policy meeting and announce a $15 billion monthly reduction in bond buying from the current $120 billion pace, judging that the test for tapering has been met as the economy heals from Covid-19.

There are two rate increases baked into the Fed Funds futures data as of today.

But a troubling aspect of The Fed’s monetary policy is that M2 Money Velocity is near the lowest in history and The Fed has been binge printing. What this means is that money printing has had little impact on GDP growth.

When The Fed mentions the post-COVID recovery, I hope they mention that REAL hourly wage growth is NEGATIVE.

And REAL S&P 500 earnings yield is also negative.

The Fed will likely to blame TRANSITORY effects such as the backed-up port traffic in Long Beach for rising prices rather than their flooding the markets with too much money.

But The Fed will continue to print, even though they will blame bottlenecks for inflation rather than their haphazard drowning of the economy in money.

Given that The Fed is monetizing the reckless spending by The Federal government, particularly Pelosi’s latest budget, we will see coordination between Chairman Powell and Treasury Secretary Janet Yellen (aka, Mustang Sally).

Call Jerome at 634-5789 to tell him to raise rate to normal levels.

Escape From LA II? Corelogic Home Price Index UP 18% YoY, But Forecast To Slow To 1.9% YoY In 2022

Yes, home prices are still growing at a super-hot pace of 18%, according to Corelogic.

But the forecast for home price growth is for 1.9% YoY in 2022.

As home price growth crashes back to earth as wages don’t keep pace with home prices.

Home prices have been growing in most states out west where The Fed’s money pump has resulted in a boom in second homes and people escaping high tax California and Oregon for Nevada, Idaho, Arizona (again), Utah and Montana. The east coast is seeing the Carolinas booming along with Florida and Indiana. Escape from New York?

Escape from LA … to Arizona, Nevada, Idaho and Utah?