Categories
Economy The Collapse

Inflation

While standing on the deck of a ship and it appears as though the level of the ocean is rising, this is an optical illusion. It is actually the ship that is sinking. Similarly, inflation isn’t an increase in prices. It’s a decrease in the value of your nation’s currency. For the US dollar, it’s value has decreased by 6.22 percent in the past 12 months.

Are you making 6 percent more than you were last year? I’m not. The problem is accelerating. In September 2021, the rate of inflation was 5.4 percent. In August, it was 5.3 percent.

If the rate of increase of inflation continues, and there is no reason to think that it won’t, November will see an inflation rate of 7.17 percent year over year. At this point, there is no sign that the rate of inflation stops in November.

The last time that the United States saw an inflation rate of more than 3.8 percent was in 1981, when the end of the Carter administration had the US suffering through 8.9 percent inflation. The year before, 1980, the rate was even higher- 12.5%. By that time, the Fed had increased the prime rate to a whopping 18%, to no avail.

At a 12.5% rate of inflation, prices double every 5 and a half years. The only thing that stopped the Carter caused inflation was a massive tax cut initiated by President Reagan. This tax cut reduced the highest marginal rate from 70 to 50 percent, then again to 28 percent. That isn’t going to happen any time soon, so…

The government will try to spin it. They will fudge the numbers by saying that increases in food and energy don’t count, as if no one is affected by paying $4.50 a gallon for gasoline. However, they won’t be able to hide the decline in purchasing power for much longer. If Biden’s the left’s stupid policies continue, the level of fuckery chicanery required for the Democrats to not get slaughtered in the midterms will be epic.

We are in for some very difficult times.

Categories
economics Economy

Retirees lose 1/4 buying power

For decades, the returns that one can expect from the stock and bond market have dictated how much a retired person can withdraw from their retirement savings without fear of running out later. That rule of thumb has been 4% per year. That is, a person with $400,000 in retirement savings could withdraw $16,000 per year and be comfortable knowing that their nest egg would last for the rest of your life (well, at least 30 years, which for most of us is the same thing).

Not anymore. The lower performance of the market has reduced that rule of thumb to 3.3%. This means that every retired person in the country just saw their retirement income drop by nearly 18%. That person with the $400,000 retirement fund can now only afford to withdraw $13,200.

Now couple that with inflation, officially at 6.22% for the 12 month period ending October 2021, and you see that the retired person with the $400,000 retirement savings now has seen the $16,000 they had to spend last October only able to buy $12,400 worth of stuff. That’s right, retired people have just lost a quarter of real purchasing power in just a year.

Categories
Economy

Not good news

President Biden looked at the September jobs report and called it a big success. Even though the number of jobs added in September was much lower than expected, he pointed to a decline in the unemployment rate and a boost in wages as evidence that the economic situation is improving.

He couldn’t be more wrong. The number of new jobs were low, unemployment decreased, but average wages increased. The only explanation that fits the facts is this:

Low wage jobs are disappearing. When people are out of work for six months or more, they are considered to be out of the work force. Once out of the work force, they are no longer part of the unemployment figures. Unemployment goes down.

Once the low wage earners are out of the market, the higher wage earners are the ones left. This raises the average income of the employed.

This is bad, bad news. At least I am out of the stock market.

Categories
Economy tyranny

Spending trillions costs nothing

According to this administration, spending $3.5 trillion doesn’t cost the American people a single dollar, because it is paid for.

That is pure spin. What they are really trying to say is that the money being spent won’t increase the deficit, because the cost will be offset by increased taxation. To say that increasing taxes on corporations and the wealthy means that this trillions in spending won’t cost anything is disingenuous at best. Aren’t rich Americans still Americans?

This is what governments do: They tax and spend.

Categories
Economy Uncategorized

Rumors

Here in the north side of Central Florida, we are experiencing shortage in frozen vegetables, along with beverages of sports drinks like Gatorade, along with canned soups being picked over. The last time I was at the store, a woman there told me that she and her husband had arrived from Pennsylvania several days before, and that area was having shortages in toilet paper and frozen vegetables. Meats were in good supply but expensive.

J KB is reporting shortages of various supplies in the Carolinas.

Things like shampoo, body wash, mouth wash, cleaning supplies, foot spray, OTC drugs, were low, especially the store brand generics.

Any other shortages in other areas of the country?

Today I went to Walmart at lunch and it took was low on a lot of non-food supplies.

Categories
economics Economy

Minimum Wage

Last November, the voters of Florida passed an amendment to the Florida state constitution that raised the minimum wage. As a result of that, the state minimum wage will be raised from $8.65 an hour to $10.00 an hour, effective at midnight tonight, October 1, 2021.

However, there is also a provision in that amendment restricting the amount of “credit” on the wages of tipped employees paid by employers who assume that some of their wages are paid in tips. The amendment sets that amount as what the FLSA allowed in 2003. In 2003, the allowable employer tip credit was $3.02 an hour.

What this means is that the minimum wage for tipped workers will increase from $5.44 to $6.98 an hour. Every restaurant in the state just saw their tipped labor costs rise by 28%. That will be passed on to the consumer, plus those workers will still expect tips.

Anyone not making minimum wage is probably just out of luck and won’t be getting a raise at all. I know I am not getting a raise.

So I recently had this discussion with some people while I explained my new tipping policy.

  • For bad service: 5%
  • For decent service: 10%
  • For great service: 15%

Next year, when the law gives you another 14% raise, to $7.98 an hour (plus tips) I will be cutting tips again. Probably to zero for bad service, 5% for decent, and 10% for great service. (Ask me what happens in 2023, when you get another 12.5% raise, to $8.98 an hour.)

The hate that I got back was legendary. I was told that if I can’t afford to tip, I shouldn’t eat out. It isn’t that I can’t afford it. It’s that I am receiving a service. Let’s list what service that is:

  1. The server writes down what food I want
  2. The server brings me a beverage and (sometimes) refills it. In the case of a cocktail, someone else who isn’t the server mixes that cocktail
  3. Someone else (not the server) provides the food and prepares it
  4. The server (sometimes, but other times it’s a food runner) carries that food to the table
  5. Someone (maybe the server, maybe the busser) cleans the table
  6. Someone else (not the server) washes the dishes

Anything else that is done is done (such as folding linens, setting the table, rolling silver) are done on the restaurant owner’s behalf, not mine. It’s a limited, minimum skill position.

Frankly, I am totally against tipping. I think restaurants should pay their own employees and not rely on customers to do it, but this is the system we are stuck with. So I get to decide what that service is worth, and to me it isn’t worth a quarter of the cost of my meal.

Here is the deal, skippy: You may have voted for a raise, but that law doesn’t apply to me. If your raise is causing me to pay more to dine out, then that additional cost will be deducted from your tips.

Categories
Economy

Welcome to the Kubuki Theater

Every couple of years, the Democrats and the Republicans engage in this stupid play. The plot is always the same: The country has borrowed to its supposed “debt ceiling,” and the Democrats want to raise it. The Republicans “refuse” to do so unless they get some concessions. The government gets “shut down” while they argue about it, until the Democrats eventually make some sort of deal, then the Republicans declare victory, raise the debt ceiling, and everyone pats themselves on the back.

Except the debt ceiling, concessions, the shut down, refusal, all of it, is fake. None of it actually exists, nor did anything actually change. It’s all theater.

Categories
Criminals economics Economy

Rats

The rats are fleeing the sinking ship that is the US economy. The regional Presidents of the Fed, who affect the economy far more than POTUS does, are busy dumping US dollar denominated securities ahead of the Fed’s expected decision to taper off on buying bonds and securities. This policy saw the Fed propping up Wall Street by purchasing stocks, bonds, and securities using dollars that they were creating out of thin air. Worse, they were purchasing those items from their own personal accounts.

This policy of using money created out of thin air has artificially propped up stock prices for years. It has also apparently been lucrative for the officials at the Fed. Now that this policy is coming to an end, the market will take a hit.

Now the officials at the Fed have decided to come clean and get out, coincidentally at the same time the Fed is to stop buying. I have a friend who is an executive at a large New York bank. He is prohibited from doing this, and his stock purchases are watched closely by the SEC to prevent insider trading to the point where he doesn’t bother because the bureaucratic hoops are too onerous. The people in the government are apparently exempt. (Yes, I know the Fed is an NGO, but that is smoke and mirrors)

I only have a few assets still in the market. A 401K, and a couple of stocks that pay dividends at the end of the quarter. I am waiting until the dividends pay out, then those stocks are gone as well. I’ve held them for over a year, so I only pay the long term capital gains rate on the profits.

Categories
Economy Military

We are the Taliban’s bitch

We are sending money to the Taliban. Let one more person try to tell me “We won all of the battles, so we technically didn’t lose to the Taliban.”

Categories
economics Economy The Collapse

Shortages

In a comment to a recent post on signs of the collapse, HomePlace asks:

When I see reports of shortages from what I believe are credible sources, I’ve been making sorties to see what I see locally. These trips in the last several weeks have been limited to grocery and home improvement stores. I haven’t seen evidence yet here in the midwest of shortages. Are shortages regional at this point? Thoughts, theories?

There are shortages, but they are being stealthy about it. My local grocery store isn’t doing anything so obvious as to leave shelves bare. A great example:
The canned soup section was most of one side of an entire aisle just before COVID began. Now the selection is much smaller, and the soup section has shrunk down to less than half the size that it was. The produce doesn’t look as good as it used to- more blemishes, more wilting on the leafy greens, that sort of thing. There are other signs, let’s take a look: