The TRUTH Behind the Hoopla Over the CPI Index Euphoria

The monthly inflation report was cheered for posting a 2.9% annualized rate, the details of the report showed a much different picture.

On a monthly basis, inflation is accelerating. Plus, if you strip out the temporary phenomenon of falling used car prices, the actual rate of inflation is closer to 5%.

Then yesterday, the retail sales report came out… and once again the experts cheered: the consumer is still strong! The soft landing is in sight!

Of course, this euphoria was equally misguided. The retail sales report showed that consumer spending is up 2.7% over the past twelve months. Sound fine… except the report explicitly states that they do not adjust the numbers for inflation.

So0000, wait just a darn minute-- if consumers are spending 2.7% more over the past twelve months, but inflation is up 2.9% over the same period, then, after adjusting for inflation, consumers are actually spending LESS.

This is not a sign of a healthy consumer economy. Data from corporate earnings back this up: everyone from McDonalds to Mercedes-Benz to Deere and even Apple have reported trouble… either slowing growth, or even outright sales declines.

Walmart reported strong growth… and the experts viewed this as yet more proof that the consumer is strong. But they’re missing the obvious: Walmart is the bottom of the retail ladder (I shop there too...this is no knock on W-Mart). So, the fact that more people are shopping at Walmart is a sign that consumers are struggling, i.e. willing to trade down to lower quality products to save money.

Yet, still, the headlines are all positive… and incredibly supportive of both Joe Biden and Kamala Harris.

Journalism is dead as I have noted many times as is reality.  Recall from my prior posts that the game was changed by replacing the Core CPI (which included oil and food prices and is MUCH higher than 2.9%) with the current CPI which is artificially optimistic. Softball questions are now the order of the day on certain candidates. This news will fuel an ill advised rate cut to boost a certain cackling candidate.

Another example of corrupt journalism is that the media is perfectly happy to go the rest of the campaign without asking Kamala a single tough question. They’re now trying to build her up as some kind of economic savant. Today, she announces programs that are pure dyed in the wool Communism that has always failed.

Case in point, today she plans on taking this newly conjured reputation for a test drive when she unveils a bunch of idiotic ideas that are supposed to pass for an economic platform.

Her signature piece is to “call for 3 million new housing units” targeted at low income and first-time home buyers. The media is already euphoric in its coverage.

These people seem to think Kamala has the ability to conjure new houses out of thin air, or to order them into existence, as if she’s ordering a pizza. It’s ludicrous.

Just look at Transportation Secretary Pete Buttigieg’s track record. This guy was given $7.5 billion to build 500,000 electric charging stations across the country. He built eight. I think a hamster could have done a better job than that, and probably still had plenty of money left over at the end.

Or just look at how much money the City of San Francisco, or the State of California, spend on the homeless: $24 billion over five years, which works out to $28,000 per homeless person per year. And they haven’t even come close to solving the problem.

So, I can only imagine how much money will be spent per house that Kamala dials up. The US government’s low-income starter homes will probably end up being the most expensive real estate in the world on a per square foot basis.

Not to completely ignore the private sector, Kamala also wants to create new tax incentives which will make it more attractive for real estate developers to build new low-income homes.

This is extraordinary. 

Yet a second major focus of Kamala’s economic platform is to raise taxes on businesses and successful individuals.

Hello, irony? This is Kamala. Seriously?  If low taxes are a good idea to boost production in the real estate sector, then why the heck aren’t low taxes a good idea for, you know, the rest of the economy?!?!

The lunacy doesn’t stop there… because the other signature piece of her new economic policy is to tackle the true root cause of inflation.

So, Kamala  is going to “monitor” corporations and somehow prevent price increases. No one understands what this possibly means. Again, the media s is already running with it, and experts are acclaiming that it will bring down the debt, end inflation, create jobs, and pretty much every rosy scenario imaginable.