Runaway spending threatens to send us back to the catastrophic inflation of the 1970s

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Fashion prices are historically reminiscent of the famous shirt maker who once said that it was “fifty cents to add a pocket and twenty-five cents to take it off” or, in the parlance of childrenswear, as the price of a “Twosie” becomes a “Onesie” we know we’re in trouble.

~ Rick Helfenbein, Forbes

Fed Chairman Powell’s goal of 2% inflation is simply not achievable, reports Forbes. Price increases and significant inflation for fashion point to something far worse. The Feds are in denial.

We had fashion inflation during the Carter stagflation period, Forbes’s Helfenbein reminds us.

After Chairman Powell spoke on April 28th about holding the line at 2% over time, it wasn’t surprising to hear Warren Buffet quickly contradict the statement when he said: “We are seeing very substantial inflation. We are raising prices. People are raising prices to us and it’s being accepted.”

SILENCING THE ECONOMISTS

Helfenbein says Biden wants the inflation talk silenced, most likely because they want to spend another $6 trillion [to start, for their socialist causes].

The Forbes economist writes: So, it was not surprising when Treasury Secretary Janet Yellen (a former Fed Chair) spoke out about this, and then quickly reversed her comments. Her original statement was: “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat. Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates.”

Liz Cheney even said, “runaway spending that threatens a return to the catastrophic inflation of the 1970’s” (aka Carter era).

Nonetheless, Biden’s handlers are waiting to see. See, what? A crash, uncontrollable inflation, stagflation, what?

The administration knows they’re borrowing will be a far more serious problem if they raise interest rates. Unfortunately, they control the Feds where Trump didn’t.

PERHAPS IT’S THE UNEVEN REOPENING

David Lynch at The Washington Post looks at the role played by “uneven economic reopening.” Maybe it will even out.

He says prices are rising on everything from used cars to cigarettes.

“Significant price increases have affected used cars, medical care, appliances, energy, food and cigarettes in recent months, according to government data. Gas prices headed higher on Monday — before ending the day almost unchanged — after a cyberattack forced the closure of the nation’s largest fuel pipeline,” he writes.

Even Lawrence Summers, a former treasury secretary warns that President Biden’s free-spending could ignite inflation that would outstrip wage gains and leave consumers struggling to make ends meet, he continues.

Perhaps it was asinine to lockdown, or at least lockdown for a year, in the first place?

But there’s hope.

Still, most economists anticipate that current production and labor bottlenecks will sort themselves out by the end of the year. Even those who anticipate higher-than-consensus inflation do not expect a full-scale inflationary breakout, WaPo’s Lynch says.

Are those the economists who said we’d see nearly a million new jobs in April?

Let’s see what the inflation index says on Wednesday.

MOST ARE ON EDGE BUT BIDEN STILL CAN’T SPEAK LEGIBLY

The Financial Times writes…the spectre of long-dormant inflation has fixed-income fund managers on edge and taking precautions to safeguard their portfolios. “Even if it is not our base-case scenario, I do think being mindful of the potential for inflation to exceed expectations is wise,” says Brett Wander, chief investment officer of fixed income at Charles Schwab. “You don’t buy car insurance because you expect to get into a car accident. You buy it in case you do”

Meanwhile, Biden says people will return to work “if they’re paid a decent wage.” But he also insisted “We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.”

Okay, how and when? Every idea he has is terrible.

He is going to keep the padded unemployment and make people take jobs for less money? Or, is he expecting companies will have to pay more? He’s forcing employers to compete against the government with its bottomless purse?

PAYING PEOPLE TO STAY HOME IS A PROBLEM, WHO KNEW?

The Wall Street Journal reports: Employers nationwide have complained for months that Washington’s $300-a-week bonus has made it harder to find willing workers. Yet Mr. Biden brushed aside the complaints, saying he and his staff “don’t see much evidence” that the payments are a “major factor.” The perverse incentive of the bonus is clear, and the evidence goes beyond the anecdotes from tens of thousands of employers. The 266,000 net new jobs in April far undershot economists’ forecasts, and the Labor Department’s latest Jolts survey showed some 7.4 million unfilled positions.

Bank of America economist Joseph Song notes that any worker earning less than $32,000 annually would get a raise by going on unemployment, according to a Fox Business report.

As Donald Trump Jr says, loudly:


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