Posted on 01/12/2022 5:55:52 AM PST by Browns Ultra Fan
This is like the Samuel Beckett play “Waiting For Godot.” Except we are waiting for Jerome Powell and The Federal Reserve to do something.
December’s consumer price index (CPI) is out and its a doozy, though expected. The CPI year-over-year (YoY) rose 7% in December.
If we exclude food and energy, CPI rose by 5.5% YoY.
Thanks to Biden’s assault on the energy sector, energy prices are up nearly 50% YoY.
REAL average hourly earnings YoY? It has crashed to -2.32%.
And with 7% inflation, the Taylor Rule model suggests a Fed Funds Target rate of … 17.84%. Bear in mind that the current target rate is 0.25%.
Meanwhile, we are waiting for Godot Powell to start taking action instead of jawboning.
(Excerpt) Read more at confoundedinterest.net ...
Correct. Debt service costs will soar.
The Taylor Rule? LOL.
That’s some artificial construct designed to get “Taylor” his 15 minutes of fame.
Among the many casualties from this report should be the “Taylor rule” formula.
And Republicans. Many, many Republicans including Congressman and Presidents.
$600 to fill my oil tank.
Biden and the socialist dems are destroying this country faster than I could have imagined.
“The Democrats have done irreparable, lasting damage to the country.”
Yes, and in less than a year. Excellent planning. John Podesta and China are happy.
“The Democrats have done irreparable, lasting damage to the country.”
Yes, and in less than a year. Excellent planning. John Podesta and China are happy.
And the Dow is up over 100 right now.
Check out this table: Figure 2. All-worker labor share, employee-only labor share, and proprietors’ total income share, first quarter 1947 through third quarter 2016 (in percent
On this web page: https://www.bls.gov/opub/mlr/2017/article/estimating-the-us-labor-share.htm
The all-labor component of total cost has dropped from approx. 66% to 56% over the past 70 years.
I agree with you that labor has been somewhat screwed on average, but that varies by sector—and there is room for an approximately 20% increase, maybe a bit more, but not 100%.
It's always a good idea to exclude food and energy. Not everyone uses them.
I uses 100% as an upper limit. Even a 50% increase would not increase inflation that much.
It takes $2,500 to fill my 1,000 gal propane tank to 90%.
They will be hard pressed to make one increase of a quarter point. Havoc will ensue and then they will have to lower.
I agree. At the very least they have been accomplices.
That’s why not much will change if R’s take back congress.
Its all a big con game.
Just do the math with the chart I posted: that would be an immediate 25%+ increase in cost.
Given that the real inflation rate has been well above 7% for the past year-plus, labor is losing out by the quarter right now, however, so they need a substantial boost just to break even. And of course such a substantial boost increases the inflation that their wages would be chasing after to rise even more. Such is the dog-chasing-tail cycle of inflation.
It’s always a good idea to exclude food and energy. Not everyone uses them.
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Yeah, discretionary items. ;)
I am not going to blame the nations economic woes on the working class. I am a big tent Republican when it comes to that. I don’t hate people that work for a living unlike most GOPers that only love small business and farmers.
The interest on a Federal debt of $20 trillion would $3.4 trillion per year, just about what the Federal government earns in tax revenues. That's the real reason they cannot raise interest rates: it would bankrupt the Federal government and many state and local governments.
I certainly don’t either. What gives you the idea I do?
As I said, they have been screwed in recent generations. That’s not universal insofar as we had auto workers, for example, killing off the competitiveness of their industry with their unions in the 70s, but mostly it has been corporate rapaciousness and low-skill/illegal immigration that has slammed the working class in the US.
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