Free Republic

DRAGHI: Inflation Must Rise Without Delay Mike Bird   European Central Bank boss Mario Draghi is speaking today at a banking conference in Frankfurt, and he has one central message: we have to bring inflation back up, now. It’s one of Draghi’s most forthright speeches, with one exceptional snippet: “It is essential to bring back inflation to target and without delay.” Draghi added: “We have to be very watchful that low inflation does not start percolating through the economy in ways that further worsen the economic situation.” You can take a look at the full text of the speech...

WASHINGTON - U.S. consumer prices were unchanged in October as a fourth straight decline in gasoline costs helped to keep inflation at bay. The steady reading for inflation last month followed a tiny 0.1 percent increase in September and a 0.2 percent drop in August, the Labor Department said Thursday. Energy prices fell 1.9 percent last month, while food costs edged up a slim 0.1 percent. Core inflation, which excludes volatile energy and food, rose 0.2 percent in October. For the past 12 months, overall inflation is up 1.7 percent, and core inflation is up a similarly modest 1.8 percent....

Every day, 170 Minnesotans turn 65. It's supposed to be the beginning of retirement. But for many, 65 is just another birthday. Although they're old enough to retire, they can't afford to. So every year in the fall, thousands come to work in Minnesota. For them, the sugar beet harvest is a lifesaver. Although it's seasonal and short-term work, it's a paycheck. The sugar beet harvest starts at the end of September and runs for a few weeks. The work involves a lot of heavy lifting and the pay is pretty good. The starting wage is $12 an hour. The...

The Cultural Economist Nov 13, 2014 TCE ( The Cultural Economist) writes: Like other Central Banks, the U. S. Federal Reserve has “printed” copious quantities of money. Despite better GDP numbers and positive media commentary, much of the American economy continues to be lethargic. The Eurozone appears increasingly vulnerable to recession. Financial and geopolitical risks could derail economic growth. What are the long term trends that will shape the outcome? The Case for Inflation Oil As I have documented several times, the rate of inflation is sensitive to the price we pay for a barrel of oil. Political turmoil in...

A Canadian's letter to the editor of the Detroit Free Press is generating buzz across the United States. In the letter, published on Monday, Richard Brunt – who claims to be from Victoria, B.C. – says that Canadians are confused by the outcome of last week’s U.S. mid-term elections, which saw the Republicans retake control of Congress. "Consider, right now in America, corporate profits are at record highs, the country’s adding 200,000 jobs per month, unemployment is below 6 per cent, U.S. gross national product growth is the best of the Organization for Economic Co-operation and Development (OECD) countries," he...

"[If] the monetary authorities are intent on depreciating the currency, then I think that in the fullness of time they will succeed all too well. …The important thing about QE [quantitative easing] is this idea, this radical precedent is now on the books — the virus as it were is in the monetary bloodstream. ...all of this is…in the books as precedent, and the monetarists and Keynesians are rather preening about the evident success of these interventions, and we can be sure I think that they will not forebear to do more still next time. There will come a time...

If modern physics is to be believed, we shouldn’t be here. The meager dose of energy infusing empty space, which at higher levels would rip the cosmos apart, is a trillion trillion trillion trillion trillion trillion trillion trillion trillion trillion times tinier than theory predicts. And the minuscule mass of the Higgs boson, whose relative smallness allows big structures such as galaxies and humans to form, falls roughly 100 quadrillion times short of expectations. Dialing up either of these constants even a little would render the universe unlivable. To account for our incredible luck, leading cosmologists like Alan Guth and...

Gold Core October 31, 2014 Stocks globally surged, while gold fell sharply today despite renewed hopes that the Bank of Japan’s vastly increasing money printing will fill some of the gaps left by the apparent end of Federal Reserve bond buying. The BOJ decided to increase the pace at which it expands base money to a whopping 80 trillion yen ($726 billion) per year. Previously, the BOJ targeted an annual increase of 60 to 70 trillion yen. The BOJ sailed into deeper uncharted monetary territory with the announcement that they would triple annual purchases of exchange-traded funds (ETFs) and Japanese...

The graph above shows that after years of holding back inflation rates, the rate of housing inflation is boosting the rate of inflation. Month-to-month housing inflation was up 0.3% compared with the overall inflation rate of 0.1%. It's not just a one-month phenomenon, either, as year-over-year shelter price increases were up 3.0% versus 1.7% for the overall rate of inflation. Unfortunately, shelter is the single biggest component of the CPI calculation, so big moves here are magnified. For some perspective, gasoline is 5% and food is 14% of the CPI calculation. The good news is that consumers, with locked-in mortgages,...

[snip]The lowflation of being consistently below an already low target is bad in itself; the deflation it could easy lead to is even worse. There are several reasons. The belief that money made tomorrow will be worth less than money today stymies investment; the belief that goods bought tomorrow will be cheaper than goods bought today chokes consumption. Central bankers can no longer set real (that is, inflation-adjusted) interest rates low enough to restore demand. Wages, incomes and tax revenue all stall, undermining the ability of households, businesses and governments to pay their debts—debts which, in real terms, will grow...

In early 2008, candidate Obama told the San Francisco Chronicle that "under my plan ... electricity rates would necessarily skyrocket." Obama was referring to his plan to cap greenhouse-gas emissions, which would, among other things, effectively choke off coal as an energy source. He was just as fond of high gasoline prices, telling CNBC in June 2008 — as gas prices shot up to $4 a gallon — that he "would have preferred a gradual adjustment." Six years later, and Obama has succeeded.

Mac Slavo October 20th, 2014 To say that the U.S. economy is in trouble would be an understatement. According to Shadow Stats economist John Williams, we may be on the very cusp of a crisis so severe that it promises to re-write the entire paradigm. Debt is out of control and foreign holders of U.S. Treasury bonds are getting antsy. Nowhere is this more obvious than in China and Russia, where leaders of the globe’s other super powers are feverishly working to distance themselves from the U.S. dollar by establishing new monetary relationships that completely bypass the world’s reserve currency....

You work hard. You pay what you think is more than enough in taxes. The economy hasn’t really felt good since 2008, but you managed to get by. If you’ve got a 401(k), it’s grown in the past few years – but the real estate bubble burned you, and the dot-com bubble burned you before that. You know that nice sum in your 401(k) could plummet without warning. What you would really like is a nice better job, so you could feel better about the amount of income coming in every month. You’re trying to play all of your roles...

Myles UdlandOctober 9, 2014Uber-bear Albert Edwards, a strategist at Societe Generale, is out with a new note to clients about market tops and expensive baskets. Edwards highlights the following comment from this weekend's Financial Times that said the following: Sir: The next financial apocalypse is imminent. I know this to be true because the (FT Weekend) House and Home section is now assuming the epic proportions last seen before the great crash. Twenty four pages chock full of adverts for mansions and wicker tea trays for $1,000. You’re all mad. Sell everything and run for your lives.(snip)

Tyler Durden 10/05/2014 Submitted by Patrick Barron via Mises Canada I have started reading a new book about the collapse of the Zimbabwean dollar–When Money Destroys Nations, by Philip Haslam and Russell Lamberti. One of the main causes of the hyperinflation was the decision of the Zimbabwean government to give army veterans of its recent wars a big bonus. The promise was too much for the Zimbabwean economy to manage, so the government printed money... and lots of it. Why is this relevant? Well, look at America. We have been fighting wars around the world for twenty-five years and recently...

Stardust got in their eyes. In the spring a group of astronomers who go by the name of BICEP announced they had detected ripples in the sky, gravitational waves that were the opening notes of the Big Bang. The finding was heralded as potentially the greatest discovery of the admittedly young century, but some outside astronomers said the group had underestimated the extent to which interstellar dust could have contaminated the results - a possibility that the group conceded in its official report in June. Now a long-awaited report by astronomers using data from the European Space Agency’s Planck satellite...

For folks who are trying to ignite inflation, this sure isn’t working out very well. It’s been hoped by the country’s central bankers that the massive quantitative easing program along with near-zero interest rates will touch off a wave of inflation that if not exactly the same thing as boom times, will at least give the appearance of a strengthening economy. However, month after month inflation in the goods that the Fed cares about seems muted. Now this month we had the horrid news that official inflation numbers are falling not rising.

Although the overall Consumer Price Index dropped by 0.2 percent in August, the price index for food rose 0.2 percent, with the average price for a pound of ground beef rising to $4.013 per pound--the first time it has ever topped $4 per pound. In July, according to the Bureau of Labor Statistics, the average price for a pound of ground beef had been $3.884 per pound—which was the record price up to that point. From July to August, the average price jumped 12.9 cents, an increase of 3.3 percent in one month.

Tyler Durden09/11/2014 Bidet sales across Venezuela are set to soar as just months after running out of toilet paper, AP reports that Venezuela's oldest newspaper is shutting down due to falling advertising, mounting inflation and a lack of basic materials. In addition, at least nine Venezuelan regional newspapers have stopped circulation because of the shortages. Of course, this is likely great news for President Maduro who can now manage his people's minds direct from his Twitter feed... welcome to socialist utopia. As AP reports, Venezuela's oldest newspaper is shutting down because of a lack of newsprint and a difficult economic...

A credit-based financial economy (as opposed to pure cash) depends on an ever-expanding outstanding level of credit for its survival. Without additional credit, interest on previously issued liabilities cannot be paid absent the sale of existing assets, which in turn would lead to a vicious cycle of debt deflation, recession and ultimately depression. It is this expansion of private and public market credit which the Fed and the BOE have successfully engineered over the past five years, while their contemporaries (the ECB and BOJ) have until now failed, at least in terms of stimulating economic growth.