SEP 13 20 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics
COST OF LIVING FAR HIGHER THAN OFFICIAL INFLATION RATE, HARVARD PROFESSOR FINDS
"the Covid-19 Pandemic has led to changes in consumer expenditure patterns that can introduce significant bias in the measurement of inflation."
One of the biggest overhauls in monetary policy in recent years was the Fed's announcement at the end of August that the US central bank would target average inflation going forward (without however giving any specifics - what is the target inflation rate? what is the lookback period for calculating the "average" - 1 year, 5 years, 50?).
To many this was nothing more than a straw man designed to give the Fed leeway to not hike rates (which would hammer bond and stock prices) even if inflation runs away in the coming years (as a reminder the biggest debate in modern finance is what comes after the covid pandemic, inflation or deflation, with prominent financial gurus on either side of the debate).
Instead, as we have often written and as increasingly more mainstream commentators now agree, a far more necessary debate the Fed should hold is how inflation is measured for the simple reason that starting in the 1980s, the calculation of inflation as measured by either the CPI or PCE became political, and meant to give Congress the capacity to continue spending without a "budget constraint." For more see the following articles:
- The Politics Of Inflation
- The "Muzzle" On Inflation
- Lessons From the 1980 "Inflation" Virus: Transmission Chain Has To Be Broken For Successive Outcome
- The Fed's Policy Mistake: "Buying" More Inflation Will Lead To Financial Instability
- Earth To Fed: Inflation Mandate Has Been Met
- "Averaging" Inflation Does Not Eliminate The Flaws In The Fed’s Policy Approach, It Compounds Them
Now, none other than a Harvard Professor has emerged on our side of this debate, arguing that the true cost of living is far higher than the laughable official CPI print of 1.3% would have the public believe.
In an NBER paper titled "Inflation with Covid Consumption Baskets", professor Albert Cavallo calculates that the true inflation rate for Covid-connected purchases is 1.85%, more than 40% higher than the Consumer Price Index. Cavallo writes that "the Covid-19 Pandemic has led to changes in consumer expenditure patterns that can introduce significant bias in the measurement of inflation." Using data collected from credit and debit transactions in the US to update the official basket weights and estimate the impact on the Consumer Price Index, Cavallo finds that "the Covid inflation rate is higher than the official CPI in the US, for both headline and core indices. I also find similar results with Covid baskets in 10 out of 16 additional countries."
See Chart:
Price Distortion
https://www.zerohedge.com/s3/files/inline-images/real%20inflation.png?itok=Mr3yuzop
Not surprisingly, the Harvard professor also shows that low-income households are experiencing more inflation, compared to high-income households, simply because spending on non-core products which act more as a tax on consumers, and whose prices have been surging, represents a far greater percentage of the monthly paycheck low-income consumers take home each month.
See Chart:
As Cavallo concludes, the difference between the measured and reported inflation "is significant and growing over time, as social-distancing rules and behaviors are making consumers spend relatively more on food and other categories with rising inflation, and relatively less on transportation and other categories experiencing significant deflation."
One doesn't need to read Caravllo's work to know that inflation is already out of control in several "core" products: last week, distortions from the official CPI report could be seen in used-car pricing, which showed the biggest monthly jump in August since 1969, but are still far short of the increases seen by used-car auctioneer, Manheim, an Atlanta-based firm that sells roughly 7 million vehicles a year according to Bloomberg.
See Chart:
CPI Used Car Prices vs Mannheim Index
And while we doubt that the Fed - or Congress - will ever do anything to figure out what real inflation is for what little is left of the US middle class, we remind readers that according to must read report from Devonshire Research Group published in 2017...
See Table:
A bried history of Consumer Price Index (and its relative)
https://www.zerohedge.com/s3/files/inline-images/CPI%20history.jpg?itok=3ve_aWdF
… true inflation is approximately three times higher than officially reported.
See 2 Charts:
CPI closed to 8% annual inflation, not the postmodern accepted rate of 3%
https://www.zerohedge.com/s3/files/inline-images/contrarian%20cpi%205.jpg?itok=VHEFQu2I
https://www.zerohedge.com/s3/files/inline-images/contrarian%20cpi%203_0.jpg?itok=nVBKVdzC
Devonshire's summary observations were the following:
- US official CPI calculation is governed, and possibly distorted, by numerous and complex technical decisions
- Inflation reporting is less a measure of purchasing power (and therefore a financial tool), and increasingly a process of affecting macro-economic policies (and therefore a policy lever)
- Real gross domestic product (GDP) measures, yield curves, and treasury issued inflation protected securities (e.g. TIPS), government and union / minimum wages all rely on official US inflation indices that are subject to these distortions
- Most financial, wealth management models rely on a price stability assumption and default to 3% inflation input – what would happen to these models if the true value was closer to 7-11%?
- If we re-compute a purchasing power CPI, de-sensationalize contrarian reporting, and remain disinterested with modern economic policies, we arrive at a 7-9% practical CPI rate over the past decade
- This has profound implications on reported vs. actual standard of living, and might explain the rapid appreciation of American consumer debt, potential reduction in perceived vs. reported quality of life, not to mention unexpected political trends
- Post-1990 inflation of 7-9%, not 3% would also suggest near “bubble-like” conditions exist across many consumer sectors;
Their conclusion:
Expect low-cost consumer non-durable, consumables, food, housing, clothing, retail to continue to exhibit strong cost pressure and consolidation incentives – or a macro-recession causing a major “inflation adjustment black swan event”
Considering that the Fed would have to hike aggressively even under its new AIT mandate, don't expect anyone in authority to seriously discuss this all too critical subject for most Americans whose purchasing power is being destroyed with every passing day and not a single person in authority seems to care.
The full Devonshire Research report on true inflation is below:
To see it OPEN :
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
Bernie Sanders must lead the 3rd Option instead of playing the game ‘BAD vs. WORSE’
BERNIE WARNS BIDEN: DON'T FORGET MINORITIES & YOUNG PROGRESSIVES
Translation: pivot far-left or lose the election!
….
It is the REV that is going to defeat Trump, not the clown Biden. Once in power the chances for Trump governability = ZERO. Then the PACIFIC REVOLUTION with REFERENDUMS will create a parallel Power demanding his RESIGNATION or else. Trump chances of worse fascism than current one will be stopped with armed militias and the support from the same military that is now supporting him. They will prefer PEOPLE NATION REV instead of fascist dictatorship. It happens with FDR and it will happen again. Real democracy will defeat fascism. All that SANDERS has to do now is organize the PEOPLE FRONT for the coming REV, starting by registering the 3rd OPTION FRONT for coming elections.
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FROM 9/11 TO COVID-19: NINETEEN YEARS OF PERMANENT "EMERGENCY"
This is America in a state of permanent emergency. The justification for the regime's ever growing power changes over time. But the results are the same...
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TRUMP & THE GLOBAL GEOPOLITICAL 'GORDIAN KNOT'
...it is clear that the “Gordian knot of U.S. imperial entanglements” is under great strain.
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PAUL CRAIG ROBERTS: THE US & ITS CONSTITUTION HAVE 2 MONTHS LEFT
In America today, liars have more credibility than truth tellers
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DHS PROPOSES MASSIVE EXPANSION OF "BIOMETRIC MODALITY" COLLECTION
"There will be new biometrics modalities, including iris scans, palm prints, and voiceprints."
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Saint elections are going to create hell in America: How? More Corruption ++
"Is money being laundered through @ActBlue from straw donors or foreign governments to Democratic candidates, or is this legit?"
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
CHINESE GOVERNMENT COMBINES "TRACK & TRACE" COVID-SYSTEM WITH SOCIAL CREDIT SCORE
...coming to America soon!
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CHINA INJECTS $500 BILLION IN NEW MONTHLY CREDIT AS SURGE IN US REAL YIELDS LOOMS
Real yields are set to soar by 150bps
from their current -1% to approximately 50bps.
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PHYSICIST: THE ENTIRE UNIVERSE MIGHT BE A NEURAL NETWORK (NOT A 'SIMULATION')
"The idea is definitely crazy, but if it is crazy enough to be true? That remains to be seen."
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RUSSIA SENDS ELITE AIRBORNE TROOPS TO BELARUS FOR DRILLS AS PUTIN HOSTS EMBATTLED LUKASHENKO
Western media reported over the weekend Minsk saw the "biggest demonstrations yet" despite a fierce police crackdown...
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US JUDGE RULES SAUDI ROYALS MUST ANSWER 9/11 LAWSUIT QUESTIONS
Including a 'trusted' US adviser?
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars & danger of WW3
US School Teacher Accused of Brainwashing Kids Over BLM Cartoon Comparing Cops to Slave Owners, KKK
Turkey Condemns US-Cyprus Agreement on Building New Training Facility,
ByteDance Rejects Microsoft Bid For TikTok US Operations
Video of Police Officers Detaining Reporter Covering Protests Draws Backlash
Protest Underway in Israel's Ben Gurion Airport Ahead of Netanyahu's Departure to US
Edward Snowden Criticizes Amazon For Hiring Former Director of US National Security Agency
Attack on Venezuela Refineries a Playbook US Regime Change Scenario
-Greece to Buy French-Made Military Hardware Amid Ankara-Athens Tensions in East Mediterranean
- N Irish Firms Lose All Clarity With UK Government’s Controversial Bill,
- Gunman Critically Injures 2 Los Angeles County Deputies in Compton,
- Tory Peer Warns Not to Sell Food Production ‘Down the River’ as UK, US in Impasse Over Trade Deal
- Pompeo Says Concerned About Eastern Mediterranean Tensions, Turkey’s Actions
- Unemployment Forcing Ever More Indians to Commit Suicide
- Roger Stone Calls on Trump to Bring In Martial Law if POTUS Loses Election
- Bahrain Jumps on the UAE-Israeli Deal's Bandwagon While Saudis Still Test Waters
- At Least 5 Killed in Attack on Afghanistan's Shinwari Checkpoint
- ‘Russian Engines Can Increase Maneuverability of Turkish Fighters’
- Yuan May Become Third Global Currency
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes & terrorist imperial chaos
REBELION
-La desigual globalización capitalista Hedelberto López
- El juicio estalinista a Julian Assange John Pilger
- La vacunac racista de Trump solo busca votos, no una cura AG y DM
Chomsky: La amenaza de usar armas nucleares aumenta con Trump
COL: DE NUEVO A LA CALLE Aureliano Carbonell
Opin: El trabajo domést toca a su fin: perspect de clase Angela Davis
Perú: Diccionarios audiovisual rescata orgullo de pueblos indígenas
Honduras : «Orígenes del conflicto minero en el Bajo Aguán»
ARG: LA DEUDA ES CON EL PUEBLO Sergio Zeta
ARG: DESVIRTUALIZAR» LA EDUCACIÓN Andrés Pabón
ECOL: LA CRISIS DEL SIGLO Hocine Lamriben
Chile El rechazo neoliberal al Acuerdo de Escazú Andrés Kogan
Econ: Redistribuir gravando riqueza, y rentas altas. no hay altern RR
Econ: pongamos fin al informe Doing Business del B M Isabel Ortiz
FEM: Abolición de la prostit: consec positiva de covid-19? Alika K
Chile: RECUERDOS NEOLIBERALES Felipe Portales
Cuba: El río, las piedras y lo que no suena: ¿devaluac y deflac? PM
Opin: MESSI Julio García Camarero
Cuba: Verdader mereced del Premio Nobel de la Paz María y Daylis
Utopía : SÍ, HAY ESPERANZA Joan Pedro-Carañana
España: Bancos BANKIA: SILENCIOS QUE MATAN Juan Ruiz
Ecuad: Soberanía alimentaria: econ familiar indíg y campes B T
MX: MORENA, BUSCANDO SALIDAS Aldo Fabián Hernández
MX: Carta abierta al presid Manuel López Obrador Mario C
Mund: El “por qué no te callas” de Wang Yi Xulio Ríos
ONU: El CV puede agravar hambruna en cuatro países
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CROSS TALK https://www.rt.com/shows/crosstalk/
Max and Stacy discuss day traders begging Elon Musk to ‘do something’ about the stock price of Tesla. At least they haven’t asked the US central bank to intervene… yet. In the second half, Max interviews David Lawant of Bitwise Investments about monetary scaling issues and upcoming inflation.
SOURCE: https://www.rt.com/shows/keiser-report/500536-elon-musk-do-something-tesla-price/
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