Administrations in the United States always release bad news late on Friday afternoons after most reporters have taken off work a little early and lined up at their local watering holes.
Apparently Saturday morning is the Chinese equivalent.
Today China announced that inflation in June his 6.4%, solidly above the 6.2% analysts had expected, clocking in at a 3-year high (according to Bloomberg).
This is one of Beijing’s big worries, and it contradicts recent comments from Premier Wen Jiabao that inflation in China had been whipped.
If the Chinese act quickly, they can probably get a good deal on a warehouse full of “Whip Inflation Now” buttons and bumper stickers left over from the Ford administration.
On the other hand, we might want to hold on to them because it’s pretty sure that we’re going to need them soon, too.
Dr. Marc Faber is known as Dr. Doom because, unfortunately, he’s a contrarian whose dark forecasts have been right on the money. He publishes a pithy monthly investment newsletter called The Gloom, Boom & Doom Report.
Here are five questions and answers we plucked from a recent interview with the Daily Bell:
Question #1:
Daily Bell: Do you still expect hyperinflation? Marc Faber: In my view, the debt level, especially in the US, if we include the unfunded liabilities of Medicare, Medicaid, Social Security and these entitlement programs, is beyond repair. And this will necessitate printing more money. Also, in my view, there is no real political will to address the issues, because who ever would cut entitlements, will not be re-elected. So we have a tyranny of the masses.
It was inevitable. It had to happen sooner or later. Consumer inflation has hit a three-year high with no evidence of economic strength to ameliorate it.
Reuters reports:
The Labor Department said on Wednesday its Consumer Price Index, excluding food and energy, increased 0.3 percent, the largest gain since July 2008, after rising 0.2 in April.
What caused the leap? Well, core inflation was impacted by jumps in motor vehicle and apparel prices. Of course, economists (the only people who do their jobs more poorly than meteorologists without getting fired) say they had expected the number to rise by just 0.2 percent last month. What the hell. They were only off by 50%, which is better that they usually do, so we say let’s cut ‘em some slack.
Over the course of the last twelve calendar months, consumer prices rose a worrisome 3.6%.
We fear that 3.6% will be a really attractive number in the years to come. We’ll long for the good ol’ days when we only had 3.6% inflation per year instead of per month.
Inflation is a ravenous monster that consumes everything – well, almost everything – in its path. And it’s coming your way. There are, however, some things you can do to confront it.
Think of yourself as an economic boy scout. Be prepared. The more prepared you are, the better the odds that you can survive, thrive and come out alive when the world descends into chaos.
Here are some common sense inflation survival tips:
We’re enveloped in a big, gooey cloud of euphoria whenever we hear “the experts” predict the future. It doesn’t seem to matter how many months in a row they’re wrong, they just keep making new predictions and the media just keeps reporting them.
Reuters actually reports the story with a straight face:
I get asked about what I think about our economic system. Why me? I read the Wall Street Journal a couple times a week and I guess that makes me an expert in some people’s minds. I accept this heavy burden that has been thrust upon me and willingly offer up opinions. Like this one:
I think we are in trouble. Maybe not Depression-era trouble, but serious trouble all the same.
Our money system is based upon trust. As long as people trust that a buck will buy $1 worth of stuff, you have no inflation. However, the actual supply of money bears no relation to that trust.
It’s a lot like banking. Suppose you decide to set up a bank. You rent a building, buy a nice safe and a burglar alarm, hire a few cheerleaders who can count and make change, and throw some money in the safe. You’re in business. Now, people come in, you lend them the money you have in the safe, but they don’t take it out of the bank. Nope, they write a *check*. So, while that money’s just sitting there, you can loan it out to somebody else. They also write a check, and so you can keep on loaning out the same money time and again.
Is that unethical? Well, it has been going on for a long time and is part of accepted banking practices, so, by that measure, it is not. It isn’t as risky as it used to be — way back, the banks had a lot of people who used savings accounts, and would want to be able to withdraw their money in actual silver or gold. If the customers all got scared, they could withdraw all their savings, clean out your safe, and your bank would go under since you didn’t actually have all that money on hand.
ChartBin.com put together an interesting world map that shows the current inflation rate in every country.
While the map is interesting, we’re not sure how accurate it is. If you’ve filled your car with gas or your shopping cart with groceries lately, you might dispute the fact that the Unites States’ official inflation rate is a mere 1.4%.
And common sense tells you that Zimbabwe’s stats are the result of even more government spin. After all, you don’t end up printing $100 trillion bills if your inflation rate is only 5%.
No matter how accurate the numbers are, we must say that we enjoy seeing that Venezuela has the world’s highest officially-reported rate of inflation at 29.8%. While we feel bad for the plight of the Venezuelan people, we shed no tears for Hugo Chavez, it’s elected leader.
Check out ChartBin.com’s scrollable interactive version here.
The New York Times calls out the sellers of packaged foods for the con game they are playing with consumers. If you are an astute shopper you’ve already noticed what’s going on at the market — companies are putting less and less food in packages, and keeping the prices the same (or raising them).
If you eat, and I think you do, it’s an interesting story on food inflation.
Chips are disappearing from bags, candy from boxes and vegetables from cans.George Boyle | Stockbyte | Getty ImagesAs an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages.With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.
Minyanville wrote a piece on Bill Lapp’s predictions for the price of food in 2015. Lapp is president of Advanced Economic Solutions, a consulting firm in Omaha, Nebraska, and the former chief economist for ConAgra Foods (CAG), on the future price of food.
In the last nine months, he says, the prices of corn and wheat have doubled; the price of corn alone (nearly $7 a bushel) is three times higher than the previous norm. Lapp estimates that the higher prices for these commodities — for the grains we eat and those used to feed livestock — amounts to some $40 billion in costs not yet passed on to the consumer. But the higher price tags are coming “sooner rather than later,” says Lapp. He calls it a “big liability in front of us.”
The article provides the details, but here is a summary of prices in 2015:
Loaf of bread: $2.16
Gallon of milk: $4.00
Ground Beef: $5 a pound
Boneless Chicken Breast: $4.37 a pound ($9.50 in New York)
Fruit: just 1-5% increase per year overall
Margarine: $1.50 a stick
Average 6-pack: $6.35 ($8.76 for Bud in New York).
While the Federal Reserve insists there is no inflation, the cost to create a dollar bill as risen 50% in the last three years, due to the rising cost of cotton and linen. Printing the dollar has become so expensive now, the government is considering switching the dollar from paper to coin. Listen to Peter Schiff tell the ironic story.
At the heart of the original uprisings in the Middle East is the cost of food. It had become so expensive that people rioted in the streets in protest. Now, inflation is firing up Americans as well. In this case, a 50% increase in the price of a Taco Bell Beefy Crunch Burrito was enough to drive a man insane.
Police say a San Antonio Taco Bell customer enraged that the seven burritos he ordered had gone up in price fired an air gun at an employee and later fired an assault rifle at officers before barricading himself into a hotel room.
San Antonio police Sgt. Chris Benavides says officers used tear gas Sunday night to force the man from the hotel room after a three-hour standoff. The man is charged with three counts of attempted capital murder. Authorities have not released his name.
Brian Tillerson, a manager at the Taco Bell/KFC restaurant, told the San Antonio Express-News that the man was angry the Beefy Crunch Burrito had gone from 99 cents to $1.49 each.
It’s a good thing he doesn’t shop for organic goods where my wife does.
On Wednesday’s two-year anniversary of the bull market, cycle watcher Charles Nenner is sticking with a forecast of Dow 5000 sometime over the next three years.
With over seven million views and growing financial media attention, Porter Stansberry’s “End of America” video has become a nationwide phenomenon. Yahoo Finance’s Tech Ticker video news series recently interviewed Porter about the predictions he’s made and how investors can protect themselves from this coming crisis.
WASHINGTON (AP) — World Bank President Robert Zoellick says global food prices have hit “dangerous levels” that could contribute to political instability, push millions of people into poverty and raise the cost of groceries.
The bank says in a new report that global food prices have jumped 29 percent in the past year, and are just 3 percent below the all-time peak hit in 2008. Zoellick says the rising prices have hit people hardest in the developing world because they spend as much as half their income on food.
The World Bank estimates higher prices for corn, wheat and oil have pushed 44 million people into extreme poverty since last June.
Zoellick said he expects food prices to continue to rise, and that export bans and weather disruptions are partly to blame.
R. Arthur Beckles: Barack Obama is President of all Americans, not just of African-Americans! It’s difficult for all working class Americans – black, white, brown, etc. African-Americans who don’t want to vote for Obama, can feel free to do so. But do they think that their lot...
keith: wow. Whos got the bigger stick, My @!(k is bigger than yours, your country my country, my countries poor is richer than yours. the truth of it is that in the end the civilians are going to feel the brunt of this economic downfall. i live in the U.S. and there are over 200 multi...
Anonymous: I agree with many of the above. I know people from both the US and Europe that are on disability because of health problems and the one person in Europe is receiving much more help than are the US citizens.
Sunday: BTW, before you ask why two adults only received $240 a week for unemployment, just remember that you can only receive unemployment if you were laid off. If you were fired or quit, you cannot receive unemployment. In my case, I got ill, and FMLA only applies to people who have worked at a...
EriktheRed: I like how it’s “fortunate that the crisis is confined to the E.U.”- what’s unemployment in the U.S. right now? How about the millions of foreclosures you’ve had already? Tent cities, anyone? Deficit spending at $3.5 bn a DAY? HMM!
David, Self Defense Retailer: Really? Why in the world are they doing that for Gitmo detainees? A whole soccer field? Outrageous! Maybe the EU really won’t last.
David, Stun Gun Supplier: It’s the next bubble. I wonder what Romney has to say about this. Obama’s made himself clear in his typical way. It’ll probably be worse than housing when it does.
See I told you: Who didn’t see this coming . Put a communist organizer in the White house and just wait. To bad the American populace lacks true intellect or is it just that the dummies out number the smart 20 to 1. Probably the latter. Obvious who controlls the vote with those kind of...
James: After a seriously obese person has had fat removal procedures, his/her flesh sags where excess fat used to be. World population should never have risen this high. It will be reduced. Through lower birth rates; or by more traditional means: war, disease, famine, cannabalism. I’m not a...
JoAnn: I have a real problem with Obama borrowing money to send to Greece when so many people in this country who have lost long term jobs,lost homes,living on the street, little or no food. I vote to take Obama and his family if they want to go and DROP them on a desert island some where just so...
Arkansas Slim: Update. Oil hit 105 per barrel yesterday, 2 20 12. Gas US Avg => 3.50 per gallon. Cloward Piven Theory of Economics: Tipping point of US Electorate => 51%. Nevada odds for Obama RE Election 6/10 on thier sport boards. EU/Greece set to collapse, dominos arranged. Socialistic...
kkl: America is now turning mediocre no more fun no more trips or vacations 100 bucks to fill gas tank and pasta and ramen noodles for life for usa there is no more hope no more fun just work go home work go home fill up gas tank eat shit and work no more fun thanks for nothing nobama i hope you...
Chris Marshall: Hi Janice, I just wanted to know, how would you be able to get a good investment out of the Whole Life Insurance if it costs really high? The projections usually given out by “Financial Advisors” that 12% is the usual earnings specially if it is invested in TSX or NYX...
Agent: Walt Disney funded Disney World by using the cash value in his whole life policy. You can’t say that was a mistake. Buy term for a specific need/period and buy whole for a permanent need or if you need your life insurance past age 65.
Forex Agent: As a financial advisor what I tell clients is that the main purpose of a life insurance policy is to provide a death benefit. Whether term, some sort of permanent life insurance, or a combination of the two is most appropriate depends on a number of factors including the...
Cindy: Before long they will, if not already, invade and keep track of everything you do including the privacy of your own home exploiting you and demanding that you worship them. You will be powerless to control it so you will have two choices…… ;kiss butt or commit suicide.
Space Cadet: don’t be rediculous. Glass Steagall is a red hearing. This problem is much farther reaching, from before the Nixon Administration. He took the US off the gold standard which was the pillar of the US dollar, and the reason it is the world currancy. He did that because the US...
Hervy: Very good advice, same as I give when talking to people. Clark Howard and Dave Ramsey are both good sources of information that is inline with what is written here at EC. Another good website that i tell people to go to in order to get an easy calculation of how much insurance to buy is...
BenP: This is part of the cannon fodder that will be used against Obama in 2012 and his administration. It’s not that he is horrible (he is) or worse than any other President (about the same), its that examples like these can be used to show the devil you know has got to be worse than the...
Lauren: Personally I think you sound like an idiot. The NIH spent 55,000 to promote a vacine that does not exist and, one of which, they would not fund to discover in the first place(yes, it’s ture look it up). If someone lives in an area with a lot of storms they already understand the...
Matt USA: I know I’m a little late to this discussion, but I think that the economic collapse scenario has changed somewhat in recent weeks. It appears that Europe will go first, followed by the United States who has gambled and lost on a TARP style European bailout. The real question for...
Kim: Marcy, Rep. Alan Grayson said in the attached youtube video in 2010 that Fannie Mae and Freddie Mac both own stock in MERS. How much stock and when did they own it? Would this explain their current actions? Did they move loans out of MERS and into Fannie Mae for the tax payers to bail out?...
China: @Serban Enache , You Are Wrong We are In Lot Of Trouble and you Know This , Starting In 2012 We will have Many Many Different Problems , We The Government Is Paying For All This Building , We Know Our Own Citizens Can’t Afford This Type Of Live Style , but we are building it Any way...
City On a Shining Hill: “The problem with socialism, i.e., the failed economic system being adopted by so many nations in the world today, is that in funding entitlement programs voters want in their politicians and having governments fund retirement, health care, education, etc, is that...
Rider I: How the US has historically used mineral rushes to get it out of Deficits and stop foreign economic take over. In the US’s historical past the Druids have used and impressed upon the US leadership to use mineral resources to stop economic warfare, along with military take over....
Financial Collapse: Everyone needs to get this correct… (REPOST ON TWITTER, FACEBOOK) America is controlled by the 3 privately owned states (district of columbia, the city of london, and the vatican.) Each has it’s own flag, pays no taxes and has it’s own laws. All 3 are part of...
Tm Newman: I graduated with my B.A. in psych/soc a year ago. Interned teaching math and English to fourth and seventh graders. The school shut down due to lack of funding. All the kids got shipped off to public school. I can’t find a position in my field, and there are no teaching jobs in...
hefsmaster: Been a slow couple weeks since the downgrade. News wise that is. But it gave me more time to coin a phrase. You’re a true libertarian when you piss everybody off. Which explains why everybody thinks were nuts and relegated to being a third wheel in politics. Well call me and...
PeacefulPatriot: The worst is yet to come in the realm of austere measures to keep up appearances on the global markets. The truth though is quite obvious to the sane members of society, we have reached a break point and it is the Systemic collapse of the post-industrial globalization bubble. All...
Serban Enache: Pearl Harbos was orchestrated as an operation years before WW2, by the British empire in conjunction with Imperial Japan. The japanese elite didn’t surrender even when they did not have any hope of wining, let alone after Hiroshima, though I don’t agree with the two...
hefsmaster: No, despite these guys obvious failings. He is exactly right. You think japan would have attacked us without any allies. Pearl harbor is an effect from a cause. Without hitler, point is mute. By the way lee, you haven’t copied anything in a while. You a congressman?
Serban Enache: This Larry Summers has some nerve. Is he trying to say that Hitler attacked Pearl Harbor?
Gordon Shumway: Two questions: 1. Why is it a felony for an individual to print money, but evidence of a keen insight into the arcane world of macroeconomics when a bankster does the same thing, only on a vastly greater scale? 2. Since those who are running the Fed and Treasury are supposed to be...
tim: i for one will not pay a single dr bill my sickness is caused by our government let’s take it back already raped and brusied lady liberty is not what she stood for so many years lets scrap the statue that means so little any more freedom is prison in america try being disabled for 20...
tim: well about time someone in power noticed what wool us seniors have to face daily after food shopping go to my drug store same tricks and and cost is up 25 percent then dr co-pays up another 20 % what will we do when money social security doesnt go far enough to keep us healthy
Space Cadet: Does it matter how we got here? The people in charge ‘think’ they are so smart that they will finesse our way out, while staying in power and making a ton of money for their pals. We will be left to pick up the tab and clean up the mess, as usual. My neighbors just got...
