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THIS WEEK’S EDITORIAL
MORE SUPPORT FOR PEAK US CPI INFLATION: Last week, more data was released indicating that the peak of CPI inflation in the United States is now in the past. The evidence presented was the release of US Core Consumer Prices which showed a rise of 5.7% from a year earlier, compared to a 6.0% rise in the prior month. Core Consumer Prices exclude volatile items such as food and energy.
As a result, BOOM’s hypothesis of falling CPI inflation as indicated by weak consumer demand inside the United States remains intact. Positive price action in the stock and bond markets continues to confirm the hypothesis as do other fundamental economic indicators.
In last week’s editorial, BOOM pointed out that US Natural Gas prices plunged by over 17% in the previous week of trading. That trend has continued with a further 7.84% fall this week. These are extraordinary price declines. Reuters has reported that excessive supply is the cause but BOOM suspects a dramatic drop in demand as well.
Consumer spending accounts for about two-thirds of domestic final spending in the US. It is the primary engine that drives future economic growth. Thus, it is critical to watch what the US consumer is doing.
The next data release for US personal spending for December will be released on 27th January by the US Bureau of Economic Analysis. BOOM has previously suggested marking that date in your diary.
Retail sales numbers for December MoM will be released next Wednesday on 18th January as will retail sales excluding automobiles. Retail sales Year-on-Year for end of December will also be released. Weak numbers for December will support BOOM’s hypothesis.
US HEALTH EMERGENCY RENEWED: Despite the good news on the CPI inflation front, a dark cloud has again descended upon the US. Last week, Xavier Becerra, the head of the US Department of Health and Human Services (HHS) again extended the Public Health Emergency for Coronavirus for yet another 90 days.
This “emergency” has now been in place for over 3 years — since 27th January 2020 — despite the fact that the President himself recently said on national television that “the pandemic is over”. In fact, his exact words were — “the pandemic is over. If you notice, no one’s wearing masks. Everybody seems to be in pretty good shape.”
However, it is now arguable that the President is no longer the Chief Executive of America. Xavier Becerra is in charge and is effectively a dictator because he and he alone has the sole power to continue this “emergency” every 90 days.
Let’s consider the facts. The data website, Worldometers, indicates that there are approximately 2 million “active cases” of Covid currently in existence in the US. Let’s be brutally frank, that does not mean that 2 million Americans are seriously sick with Covid. They have simply recorded a positive test result. Many, if not most, will have almost no symptoms. The current “case” number is just 0.6% of the total population of the United States with perhaps 0.1% being seriously ill.
BOOM must ask the question. How can 0.6% returning a positive test result and 0.1% being seriously ill be interpreted as a national “Public Health Emergency”? Ask Xavier Becerra.
Again according to Worldometers, over 100 Million Americans have had the SARS CoV2 Corona virus over the last 3 years and recovered fully, most without any active treatment. So where is the “Public Health Emergency”?
THE LAWYER KING: Xavier Becerra graduated in Law in 1984 and was admitted to the State Bar of California in 1985. For a short time, he worked in community legal aid. However, in 1986, he became a government employee as an administrative assistant for a Democrat California state senator. He was then appointed as the Deputy Attorney General of California while still below the age of 30 years.
In 1990, at the age 32 years, he became a politician. For 2 years, he was a member of the California State Assembly but then moved to the House of Representatives in Washington DC for the next 24 years. In 2017, he became the 33rd Attorney General for California. Four years later, in March 2021, he returned to Washington DC as the 25th Secretary of Health and Human Services, appointed by Joe Biden and taking over from Alex Azar.
BOOM has looked hard at Xavier Becerra’s career but cannot find any knowledge or experience in the areas of health or human services. So, it is clear that he was not appointed because of his expertise. However, he is now the effective health dictator of the United States.
Every 90 days, he gets to decide whether or not to extend the Coronavirus emergency or to institute another one from any other perceived health threat. For example, on November 2nd last year, he extended the Public Health Emergency concerning the “outbreak” of Monkeypox. That disease has caused a grand total of 21 deaths in the US since it began in June 2022. It was declared by Becerra for the first time on August 2, 2022.
BOOM doesn’t quite understand why it continues to be declared as the cause of a national health emergency when so far there have been just 80 deaths from the disease throughout the entire planet which contains 8,000 Million people. Hardly a cause for any great concern but the US national health “emergency” persists because Becerra perceives it so.
On December 22nd, last year, Becerra also extended the Public Health Emergency concerning the Opioid crisis in America. So there are three crises running concurrently in the US at present.
There is nothing to stop the declaration of further crises at the whim of the Secretary of the HHS. He could declare an emergency for the consequences of alcohol consumption, or for the consequences of obesity, or for the consequences of heart disease, or for the consequences of climate change. Whatever.
You get the drift. And remember, those “emergencies” hand a great deal of power to the unelected head of the HHS to do almost whatever he wishes in the circumstances with no formal oversight.
Is this a functioning Democracy? Is Congress aware of this level of unelected executive power being in the hands of the head of the HHS Department? BOOM suspects not to both questions. If the US is no longer a Democracy, then what is it?
Becerra’s statement last week — Quote: “As a result of the continued consequences of the Coronavirus Disease 2019 (COVID-19) pandemic, on this date and after consultation with public health officials as necessary, I, Xavier Becerra, Secretary of Health and Human Services, pursuant to the authority vested in me under section 319 of the Public Health Service Act, do hereby renew, effective January 11, 2023, the January 31, 2020, determination by former Secretary Alex M. Azar II, that he previously renewed on April 21, 2020, July 23, 2020, October 2, 2020, and January 7, 2021, and that I renewed on April 15, 2021, July 19, 2021, October 15, 2021, January 14, 2022, April 12, 2022, July 15, 2022, and October 13, 2022, that a public health emergency exists and has existed since January 27, 2020, nationwide.”
SWISS CENTRAL BANK LOSS: The Swiss Central Bank, which is called the Swiss National Bank, is also commonly called the World’s largest Hedge Fund. It has bought a huge portfolio of stocks and bonds over the last few years in order to keep the Swiss Franc from rising. As a result, it has now registered a record loss of US$143 Billion on the value of its assets under management AUM.
This is the biggest loss ever in the bank’s 116 year history. The 2022 loss means the Swiss National Bank will not distribute any profits to its owners as dividends. The owners are the Federal government and regional Swiss Cantonal governments. It will be only the second time since its establishment in 1906 that it has not paid its usual dividend pay-out. Last year, it paid a dividend of US$6.5 Billion.
It looks like the SNB will go down in history as the least successful Hedge Fund in history. To make matters worse, there are reports that they are going to begin selling down their asset portfolio just as the US asset markets are set to recover. Perhaps they need to consult with BOOM about this?
ARGENTINA-CHINA CURRENCY SWAP: Argentina’s second largest trading partner is China. Last week, its central bank announced a large Currency Swap deal between the two nations. The deal will allow Argentinian importers and exporters to use or accept Chinese Yuan as payment to settle trades between the nations or, vice versa, for China to use the Argentinian currency likewise.
This is yet another small step towards a multi-polar currency world of trade settlements which will eventually avoid the use of the US Dollar as the dominant currency of settlement. From little things, big things grow. The swap is reported to be of the order of US$24 Billion equivalent.
CHINA-AUSTRALIA NEW RELATIONSHIP: China and Australia celebrated the 50th anniversary of the establishment of diplomatic ties last month. The relationship between the two nations had soured over the term of the last Australian government, led by Scott Morrison from 2018 to May 2022. However, with the election of a new government, where control has passed to the Australian Labor Party, things have become less antagonistic. This is a welcome change for both nations.
China’s ambassador to Australia, Xiao Qian said in Canberra last Tuesday that it had been a “positive, constructive and productive” period following the election of the Labor government. He said a “new consensus” was being built and indicated that trade discussions were proceeding “in a constructive manner”. Xiao Qian also said “This relationship is important for both sides and both sides should work together to improve, to uphold and to develop the relationship”. “There is such a strong complementarity between the two countries,” he said.
THE FORGOTTEN WAR: The forgotten war in Yemen is nearly 8 years old. Reports from the Eye for Humanity Centre for Rights and Development based in Yemen have stated that the Saudi Arabia-led international coalition destroyed over 14,300 homes, 12 hospitals, 64 schools, and 22 power stations in Yemen over the last year.
This carnage has sadly not been reported in the Western mainstream media who are obsessed only with the war in Ukraine and the “war” against Covid. The Saudi-led coalition has imposed a comprehensive land, sea and air blockade on Yemen since 2015 to prevent the supply of weapons. However, the blockade also prevents the inflow of essential supplies including food and medicines to Yemen, which is heavily dependent on imports.
The United Nations estimated at the end of 2021, that 70% of all the 260,000 casualties of the war were children under five years of age. According to UNICEF, two million children have dropped out of school in Yemen since the conflict began in March 2015. This tragedy rolls on unfortunately while the West’s eyes are drawn towards Ukraine and yet more fear-mongering about Covid.
In economics, things work until they don’t. Until next week. Make your own conclusions, do your own research. BOOM does not offer investment advice.
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BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how global banking systems really work.
AND Watch for 4 minutes, this Bank of England explanation: Money is essential to the workings of a modern economy, but its nature has varied substantially over time. This video describes what money is today.
Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models. EMAIL: gerry{at}boomfinanceandeconomics.com
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How statistics lie ( not directed at you Peter, I really like your posts)
Okay– just as an EXAMPLE.. let’s say inflation in Jan 2022 was 10% higher than in Jan 2021.. it gets reported as “10% higher CPI !”
Now if Jan 2023 is just 6.7% higher than Jan 2022 , the headlines read “inflation Drops over 3% YOY !” or
“Peak inflation is Past !”
Riddle me this. How is “peak inflation past” if prices continue to rise 5-7% annually? Is not every year a new, higher peak of cost/price for the same items? With this logic we could have million dollar cardboard boxes to live in in the year 2100 but as long as it increases slooooowly we can say 2022 had worse inflation.
One more example: we know how unemployment is absurdly calculated at just 3.5% or whatever- when the real labor force participation is only 60% and the true unemployed is around 20%.
However, did it ever occur to the wizards who make up the phony numbers, that using their system or definitions– we literally could have EVERY American quit their job, NOBODY working or looking for a job, and within 18 months when “benefits” run out, the US would have ZERO unemployment by Govt Definitions.
I rely on stats less and less and just look at the world. Drive through a city during the day or an apartment complex parking lot full of cars on a Tuesday at 11AM and see if 96.4% of the cars are gone.
Find an old grocery receipt and look for yourself– a can of corn was 3 for a dollar, now a can is a dollar each. Corn has not gotten rare or scarce, the Dollar is losing it’s buying power– aka inflation.
AP,
I think that javelin is spot on. While inflation may have peaked
for now (this stage of the cycle) the full effects of the ridiculously-named
“Inflation Reduction Act” (a commie-greenie-eco pack of pork) as well as
the billions of dollars being laundered through Corrupt
Country 404 will not show up for about 12 – 18 months.
Indeed DD and I concur as above. If inflation is falling, then it’s disinflation not deflation – I believe this will come later as we enter Great Depression 2. My Chapter 13, explains it as best I can: https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020
Inflation is running at about 25% a year with no let up.
The next two or three years are going to be brutal by today’s standards.
Nice adjective – I would add ‘savage’ and ‘ravaging’ for Joe Public.
Yes this is true for some people VOWG – we all have different levels so the average doesn’t make much sense and even measuring it is only theoretical and bears no relation to reality for individuals. This is nearer the mark: http://www.shadowstats.com/alternate_data/inflation-charts
And this is even more realistic – but still averages on a smaller scale:
and for fun, here’s the Big-Mac Index: https://www.statista.com/statistics/274326/big-mac-index-global-prices-for-a-big-mac/ which seems to be important to some who mess at the trough. 🙂
It’s all very confusing. I keep my bills and compare year-over-year for my own inflation stats – last year (ex-energy exceptional) I’m on 12% YoY but I’m a sad accountant with little else to do except chat to my readers!
Excellent analysis javelin, thank you. And of course you are right about lies & stats. They are a political weapon – ShadowStats has much better figures. BOOM always tries to be optimistic on the ‘trends’ because he is ‘market-orientated’ – thus looking forward. The regular stats are backward-looking and thus not much use, only as PsyOp which is everywhere now. Control relies on what people ‘believe’ and they do a good job of misdirecting the unthinking masses.
While there isn’t a Covid emergency I believe there is a definite health emergency emerging in the US and all of the highly jabbed countries. The deathvaxxx death and injuries are becoming hard to hide. There will be a collapse in medical care as healthcare workers are some of the most vaxxed. Their injuries take them out of the profession as the numbers of diseased and disabled needing medical care mount. A true crisis is at hand.
You got that right. It will be a great year if there are no deaths in the family. I am the youngest son at 64, and I have lots of older siblings and their wives. Births are down 60% in Australia. Seems triple vaccination is better than abortion. New saying will be abortion is so 20th century.
I share your close relative experiences AKJ. My wife’s daughter’s husband works in a bank in SA and has had two colleagues drop dead. I know of others locally and my own youngest son (45) had a heart attack in November (unVaxxed – 3 Covid infections) – but got away with it – a very close shave – now he has a stent and is in Rehab, doing OK.
Quite so Steve but I don’t think this is what the idiot means – they have to keep it going to justify the money printing – I read this book a while ago – very good appreciation of why they use these political tools:
“This book contends that since the financial collapse of 2008, populations in many countries have become restive in the face of extreme inequality and diminishing life chances. In a digital economy, one to two billion people will soon be superfluous, but they are not likely to remain sitting on their hands; in many parts of the world their resistance has begun. The Western capitalist elites have lost the capacity to engage their respective peoples in an equitable social contract and have resorted to stoking fear — from the terrorism scare and the Russian threat to the COVID infliction, with more variants coming on line — as a formula for curtailing protest and maintaining power.
It analyses the social forces driving this process: the US national security state and its intelligence apparatus, the IT giants spun off from it, and the large media conglomerates that have joined forces to create a comprehensive surveillance system of Orwellian dimensions ”
So … just what does the author think will happen to gas price speculation the next time a really, really cold wave hits the US?
As has happened multiple times in the EU and the UK in recent months, prices have at times skyrocketed — IIRC, some weeks by 40% or more …
Hard to imagine the speculators not sticking it to US if the opportunity arises …
Oh yes Anthony – it’s all fixed in the futures markets as you know. The cassino markets screw all of us…all the time…forever! My theme for this Saturday!
Two thousand years ago “John” wrote that people would have to have a Mark on their right hand or their forehead in order to buy or sell (Rev 13:17). On 9Mar2022, FJB signed EO 14067 legalizing survellance of all Citizens and control of all bank accounts. On 10Mar2022, FJB ordered the Fed Reserve, the Treasury, Justice and Homeland Security Depts to prepare a report on the CBDC (that was already a ten year old government topic). That report arrived about Sep2022 and directed: 1) Corporations to enroll key people in FedNow training to learn how to convert to FedCoin by Jul2023 2) For everyone to receive a FedCoin Card 3) Full implementation of FedCoin by Jul2024. All currencies, precious metal coins, barter, etc, will become illegal for trade. Everyone’s wealth will be converted to FedCoin and spendable like a Debit Card. The Vice Chairwoman of FedNow released about a 5 minute video explaining this at Cryptogrizz.com ; scroll down to a green screen with binary numbers and click on it. Also Ref: Alacriti.com “Connect to FedNow with our Early Adopter Program”, and: home.solari.com: “Best Evidence CBDC and the Fed’s Plan to Weaponize Money.” Several Target, Walmart, Whole Foods, etc, stores in California have already installed gates at the entry that require customers to display their QR Code (a 2D Bar Code) usually using their phone for entry. Their credit card is automatically charged at checkout. I suppose one day this QR Code will have to be printed on/in our right hand or foreheads (to buy or sell etc). What will happen to a person’s real property when all the FedCoins are spent? Will TPTB Sanction some people and take all their FedCoins? Food and fuel would soon become rationed (already being done in Australia). Special Social Taxes and any fines will automatically be deducted; so could our share of Racial Reparations, Social Utilities and Global Warming Redistributions, Trump Supporters and Extremest would probably be cut off. The current dollar system will undoubtedly have a planned crash (ie $=0) before Jul2024, and the FedCoin System will be Just in Time to save the economy from a fate like the Crash of 1929 and the Great Depression. Revelation implies this money system becomes seven years of Tyranny by an anti-Christ Beast and all who take the Mark of the Beast will go to Hell. I have not heard a peep about FedNow and FedCoin Cards etc from the MSM; Jews do not believe the NT (or even Zec 12-14) so key people don’t get it; but I don’t think even the dumbed down Secular public will buy this Fed Reserve Fox Plan to guard all the Hen’s Wealth. I encourage everyone (and for whatever England plans too) to contact their Representatives at every level and tell them to strongly oppose the FedNow Plan (forever). From States down to individuals, everyone should consider extreme measures to avoid the CBDC. States should open State Banks and issue State Currencies, at least create State available checking accounts ASAP. Individuals should form self-independent and survivable (and Christ Centered) communities as free from The NWO Beast System(s) as possible. Pray God destroy the USSA Oligarchs like He destroyed the USSR Oligarchs in 1989. Vaya con Dios. PS: TPTB are trying to sneak this in like they snook in the Federal Reserve and the IRS in 1913.
Thanks rhs jr for highlighting the cabal’s intentions. In-between the weasel words is this at Sec 5: “(A) potential uses of blockchain that could support monitoring or mitigating technologies to climate impacts, such as exchanging of liabilities for greenhouse gas emissions, water, and other natural or environmental assets; and (B) implications for energy policy, including as it relates to grid management and reliability, energy efficiency incentives and standards, and sources of energy supply.
Humm – looks like a total control grid. https://www.presidency.ucsb.edu/documents/executive-order-14067-ensuring-responsible-development-digital-assets The BIS has something to say about this, worth a read:
https://www.bis.org/publ/qtrpdf/r_qt1709f.pdf
“States should open State Banks and issue State Currencies, at least create State available checking accounts ASAP.” Exactly rhs jr and N. Dakota is a model. “North Dakota is the only state that has established a publicly owned bank” and they never suffered in the 2008/9 meltdown.
This is the way to go IMHO – local communities with local banks and currencies – the best defence is avoidance when the enemy is overwhelmingly powerful.