I think Janet just pissed in her Depends. Someone let the BLS go rogue and report that inflation is SURGING, but just for energy, food, medical care and transportation. Who needs that shit in their daily lives. Even the cover-up committee at the BLS is reporting annualized inflation of 4.2% over the last two months. Even these reported numbers are a joke. The BLS drones show fuel oil and natural gas falling, when in the real world fuel oil is up 2% and natural gas is up 4.5% in the last month.With the government now reporting inflation in the 4% range, you know it is now exceeding 8%.

Now for the really good news. The oligarchs are still happy. Corporate profits are still high and stock prices are surging because REAL wages keep falling. Real or inflation-adjusted hourly wages fell 0.2% in May as the cost of consumer goods outraced the rise in worker earnings. Real wages have actually fallen 0.1% in the past 12 months. I’m sure this will lead to a surge in retail sales. I wonder how CNBC will spin the never ending decline in real wages with the never ending rise in living expenses. Maybe Steve Liesman can blather about how beneficial this will be for credit card debt. And we all know credit card debt is what leads to wealth and prosperity.

If you want to know about the future of inflation, ask yourself these questions:

Do you think our little problem in Iraq is going to make energy prices go down in the next few months?

Do you think the continued roll out of Obamacare is going to reduce medical costs over the next few years?

Do you think Obama’s student loan “solutions” are going to decrease tuition in the next few years?

Do you think Obama’s plan to kill coal are going to reduce electricity costs in the next decade?

With drought in California and the Midwest drought having devastated cattle herds, do you think food prices will be dropping?

With the Federal Reserve still pumping out billions of fiat dollars, do you see your lives improving?

They call it the American Dream because you’d have to be asleep to believe it.


What “Low-Flation”? Core CPI Jumps Most In 3 Years As Food Costs Push Higher

Tyler Durden's picture

The Fed is losing its reasons for printing, leaving it desperate to revive the meme that the US economy is in self-sustaining recovery mode. At 2.0% Core CPI has caught up with the hot-flation of PPI removing the crutch of low-flation easement the Fed has been relying on. While Ex-Food-and-Energy is surging (well above expectations), the food index rose 0.5% in May after increasing 0.4% in each of the three previous months; and the index for food at home increased 0.7%, its largest increase since July 2011. This is all happening against a backdrop of real hourly wages dropping 0.1% YoY.


Does this look like the Fed has inflation concerns under control?



  1. Ohhh shit they can’t hide it anymore! Or, some idiot tried to tell the truth and now looking for work? Inquiring minds want to know.

  2. The Myth Of Wage Inflation Comes Crashing Down: Real Hourly Earnings Slide To Lehman Bankruptcy Levels

    Submitted by Tyler Durden on 06/17/2014 09:46 -0400

    One of the more insidious lies spread by the recently flipflopping cadre of “suddenly” permabullish millionaire sellers of newsletters has been that wages – that most important component of any real, durable, self-sustaining economic recovery – are rising. Maybe they are rising for said millionaires, but not for the US population. Of course, this propaganda is perfectly explainable: if there are expectations of, and confidence in rising wages, Keynes 101 says that sooner or later employers will have no choice but to match expectations with reality. And sure enough, in nominal terms, after plunging to just a 1% increase in Y/Y terms, absolute wages paid to US workers have staged a tiny, if observable rebound, still well below historical levels.

    Of course, what said newsletter sellers always fail to mention is that nominal wages are meaningless in a world in which food and energy prices are soaring, and where, as even the BLS admitted earlier, food prices have surged the most since 2011. In other words, what matters are real, not nominal wages.

    Luckily, there is propaganda (“ignore the present focus on the future”… for 6 years now), and there are facts.

    The chart below shows that, as reported moments ago by the BLS, real average hourly earnings just posted their third sequential decline in a row, dropping from $10.33 in February, to $10.32 in March, to $10.30 in April, to $10.28 in May. Furthermore, this was the first year over year decline since October 2012.

    And to put today’s $10.28 real average hourly earnings number in context, this is the same real wage seen last in July 2013, July 2012, March 2011 and then, if one goes further back… the month after Lehman failed!

    In other words, while the S&P has nearly tripled since its lows real American wages are…. unchanged.

    But please keep believing the lies that wages are virtuously rising, any minutes now.

    Source: BLS

  3. Obama’s going to push college tuition up to about $75k per year (nominal) for average four year on-campus all-in cost. Unless you’re a “Dreamer”, of course. If food prices go any higher, I’m going to be serving those pig faces they sell at Mexican markets. “Aw dad – pig face AGAIN?”

  4. At the same time folks are raiding their 401K money,this is surging to new levels .People who used to use the equity in their homes to buy stuff no longer have that luxury. Now they are borrowing just to make ends meet.

  5. 2014-06-17 08:01 by Karl Denninger

    CPI: +0.4%

    About that Fed target….

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.1 percent before seasonal adjustment.

    The seasonally adjusted increase in the all items index, which was the largest since February 2013, was broad-based. The indexes for shelter, electricity, food, airline fares, and gasoline were among those that contributed. The food index posted its largest increase since August 2011, with the index for food at home rising 0.7 percent. The increases in the electricity and gasoline indexes led to a 0.9 percent rise in the energy index.

    No, you’re not imagining it.

    And since the CPI grossly (and intentionally) understates your actual cost of living, well, you’re really feeling it.

    Electricity was one of the big contributors this time around, up 4.1% on the month. And remember, Obama’s intent with shutting down coal-fired power plants is to make power more expensive. It’s already happening and his “executive” actions will (grossly) fuel this trend.

    Airline fares were also up an enormous 7.4% — on the month. Good thing I refuse to fly with The Sexual Assault.

    Meats in general were up big; bacon being a big contributor. That sucks; everyone should eat lots of carbs for breakfast and leave all the bacon for me! The only respite was in eggs, which were down on the month (but up huge annualized.)

    Thank Obama — especially on the electricity.

  6. Inflation, the silent tax. I guess printing trillions of dollars and diluting the currency wasn’t such a good idea. The government is still taxing us into oblivion, and Obamacare taxes are just getting started. I read an article yesterday saying 50% of millennials (that have jobs) are paying almost half their paycheck for debt service. Boomers are in massive debt, and people are using their homes as ATM’s again, not to mention all the dumbshits that bought Camry’s and SUV’s with government backed subprime loans. The debt will keep piling up until the dollar crashes, the banks are again insolvent, the stock market implodes, lending stops, and derivatives wipe out the financial system world-wide. Sooner or later, people are going to become desperate, as costs keep going up, incomes keep dropping, and they run out of borrowed money.

  7. AWD says : Sooner or later, people are going to become desperate, as costs keep going up, incomes keep dropping, and they run out of borrowed money.

    True AWD but I bet right along side of us will be the Gooberment…plotting their next round of confiscation. 401K’s are on the horizon for confiscation…Book it Dano !

  8. “I think Janet just pissed in her depends”, thanks for that Admin, had a swallow of coffee in my mouth while reading that line, cracked me up, coffee sprays out my nose and all over the keyboard. Keyboard is obviously still functioning so it’s all good.

    Was at the butcher shop on Sunday to buy a couple of nice steaks for fathers day barbeque, rib steaks and t-bones for $19.99/lb., say what? Settled for $3.29/lb pork chops, I’m afraid there will not be many steaks on the Q this summer.

  9. Beef Reaches U.S. Record as Rancher Sees More Gains

    By Megan Durisin – Jun 17, 2014

    For a guy who just sold some of his cattle at the highest price ever, Missouri rancher Ryan Sharrock is showing less enthusiasm for beef. He says the meat is just too expensive and that the cost probably will keep rising.

    While he got more than $1,000 each for 23 calves sold at auction a couple of weeks ago, the 33-year-old Sharrock says he’s cut back on steak dinners for his family of five in Patton, Missouri, to less than one a week from three. “It’s not so much a cheap family meal anymore,” he said.

    U.S. ground-beef prices are up 76 percent since 2009 to the highest on record, after a seven-year decline in the herd left the fewest cattle in at least six decades, government data show. Meat costs are rising faster than any other food group, eroding profit margins at Hormel Foods Corp. (HRL) and forcing Costco Wholesale Corp. and Chipotle Mexican Grill Inc. to raise prices.

    Supply probably will remain tight. It can take three years to expand the herd, and a prolonged drought in Texas, the top producer, parched pastures needed to raise young animals. The government says the U.S. will become a net beef importer in 2015. Cattle futures already up 22 percent in the past year in Chicago may rally 8.3 percent to $1.578 a pound by the end of December, a Bloomberg survey of five analysts showed.

    “Beef’s a staple at this point, so at many points, it’s inelastic on price,” said Jake Dollarhide, the chief executive officer of Longbow Asset Management Co. in Tulsa, Oklahoma, which oversees about $75 million. “I don’t see consumer habits changing at these price levels.”

    Shrinking Herd

    After years of high feed costs and drought, the domestic herd on Jan. 1 slid to 87.7 million head, the fewest to start a year since 1951 and the seventh straight decline, U.S. Department of Agriculture data show.

    Beef demand peaks at this time of year as warm weather encourages outdoor grilling. At grocery stores, ground beef jumped 16 percent in the 12 months through May to a record $3.856 a pound on average, the Bureau of Labor Statistics said today. The USDA said May 23 that beef and veal prices will rise 5.5 percent to 6.5 percent this year, more than any food group.

    The cost of beef for Denver-based Chipotle (CMG) rose 25 percent in April from the fourth quarter of 2013, a “pretty dramatic” increase, Chief Financial Officer Jack Hartung said at a conference on June 11. The restaurant chain is increasing menu prices, with steak items fetching 70 cents to 80 cents more than chicken, up from a 35-cent premium.

    Slow Expansion

    Expanding the cattle herd to boost beef output is a slow process. The gestation for calves is nine months and animals take as long as 22 months to reach slaughter weight. Feedlots buy calves weighing 500 to 800 pounds raised mostly on pastures and then feed them a diet of mostly corn until they reach 1,200 pounds (544 kilograms) and can be sold to beef plants.

    Cattle futures for August delivery, which track animals ready for slaughter, are up 14 percent this year on the Chicago Mercantile Exchange, and touched $1.4775 a pound today, an all-time high for a most-active contract. Feeder cattle rose 24 percent, touching a record $2.103 a pound today. The Standard & Poor’s GSCI Spot Index of 24 commodities gained 4.7 percent since December, while the MSCI All-Country World Index of equities rose 4.1 percent. The Bloomberg Treasury Bond Index added 2.8 percent.

    The cattle rally is boosting costs for some ranchers. Sharrock began the year buying more than 80 cows at $1,400 to $1,500 each to expand the number of calves he can sell to feedlots. After prices surged to as much as $2,100 at the end of May, he stopped buying cows because they were too expensive.

    To supplement his income, Sharrock also buys for other ranchers. At the Greenville Livestock Auction in Illinois, about 50 miles (80 kilometers) east of St. Louis, he bought 41 head on May 28 at about twice the price of two years ago.

    Demand Destruction

    High prices may undermine the rally. With beef supply down, per-capita consumption will drop in 2015 as chicken rises and pork remains steady, the USDA said. Expanded output of cheaper meat would keep prices in check, said Christopher Narayanan at Societe Generale in New York.

    “If we’re going to see another rally in live-cattle prices, we’d have to see continued strength in beef prices, but a lot of that would depend on the pork industry and the poultry industry,” Narayanan, the head of agricultural commodities research, said in a May 12 interview.

    The 18 percent drop in corn prices from a year ago also is creating an incentive for ranchers to expand, with the USDA predicting a record domestic harvest later this year.

    Fewer Heifers

    Even a move to expand the herd may keep supplies limited through next year as ranchers hold more cows for breeding rather than slaughter. Purchases by feedlots in March and April fell below year-earlier levels after starting the year higher and are expected to remain limited into 2015, USDA data show. As of April 1, feedlots had 6 percent fewer heifers than a year earlier, while steers rose 2 percent.

    “The stars continue to line-up for a lasting, record-high, feeder-cattle market with sound fundamental supply and demand data supporting the surge,” Corbitt Wall, the officer in charge of the St. Joseph, Missouri, branch of the USDA’s Livestock Market News, said in a June 6 report.

    Persistent drought also limits expansion by damaging pastures. In Texas, 69 percent of the state is in moderate to exceptional drought as of June 10, the fourth straight year of dry weather for this time of year, according to U.S. Drought Monitor data. The USDA on June 11 trimmed its expectations for 2014 beef output by 0.6 percent to 24.5 billion pounds.

    “The ever-tightening supply of cattle on the ground and the amount of beef we’re able to bring the consumer, that’s not going to change any time soon,” said Altin Kalo, an economist with Steiner Consulting Group in Manchester, New Hampshire. “It’ll be three years down the road to even start to make a dent.”

  10. Tolls on the Pennsylvania Turnpike are going up for the seventh straight year.

    The turnpike commission Tuesday approved a 5 percent increase that will take effect in January.

  11. “The government says the U.S. will become a net beef importer in 2015.”
    —-from an article posted by Admin in the thread above

    Absolutely unbelievable. Are corn and wheat next?

    “If the US government owned the Sahara Desert, there would be a shortage of sand in 5 years.”
    —-Milton Friedman


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