Inflation is Your Fault

[<SLV>]

Nice rant.

"Inflation Is Your Fault" And Other Self-Loathing Liberal Lies

The Atlantic sat by and watched the Fed print trillions of dollars then blamed the result of their actions on America's middle class. Even for a liberal rag, that's a new low.

quoththeraven.substack.com

Hell hath no fury like a New York City limousine liberal full of self-guilt, ready to submit to their overlords in the government and media, even if it means blaming themselves (and everybody else) for problems that have absolutely nothing to do with them.

But, rather than try to deal with the mindset of those malleable enough to walk around accepting blame for problems others have created, I wanted to write this article to go right to the source. This weekend, that source was The Atlantic. Yes, the same publication that got down on its hands and knees and begged us for Covid amnesty after being part and parcel with an authoritarian group of psychopaths, who were happy to abscond with the civil rights of everybody around them, unilaterally now wants to blame us – everyday Americans – for inflation.

How do I know this? They wrote a fucking article called “Inflation is Your Fault” and titled it in all capital letters, in the douchiest Serif font they could find....

 

[pmbug]

There was a good bit of stimulus funded consumer exuberance when the lockdowns ended. It didn't last that long though. There are numerous factors that contribute to the inflation problem. Consumer spending on discretionary items is not one of the primary factors.

Personal Consumption Expenditures

View data of PCE, an index that measures monthly changes in the price of consumer goods and services as a means of analyzing inflation.

fred.stlouisfed.org

 

[Casey Jones]

Garbage in, garbage out. Start with false facts, end up with failed results.

You can deny reality; but you cannot deny the results of denying reality.

I'm having a hard time giving a schitt. The problem right now is not inflation; the problem is the stupidity, venality, and hubris of the Ruling Class.

 

[Goldhedge]

Thing is, it never goes back down...

 

[pmbug]

British think tank says it's mostly corporations gouging people:

Many large international companies were able to comfortably increase prices during the global inflation period, protecting or even driving up their profit margins, while ordinary families saw their real incomes wither away, according to a new report from IPPR and Common Wealth.

Energy companies like ExxonMobil and Shell, mining firms such as Glencore and Rio Tinto, and food and commodities giants like Kraft Heinz, Archer-Daniels-Midland and Bunge all saw their profits far outpace inflation in the aftermath of Russia's invasion of Ukraine.

Because energy and food prices feed so significantly into costs across all sectors of the wider economy, this exacerbated the initial price shock – contributing to inflation peaking higher and lasting longer than had there been less market power, the report argues. Firms in other sectors such as tech, telecommunications and finance also saw high profit increases.

Such companies have been able to protect their profit margins or even increase them – setting prices higher than are socially and economically beneficial, and so generating ‘excess profits’ - through a combination of high market power and global market dynamics, the report says.

It builds on work by Isabella Weber, assistant professor at the University of Massachusetts, who has argued that profits in ‘systemic sectors’ can have an outsized impact on inflation across the wider economy. IPPR and Common Wealth researchers undertook the first multi-country analysis of corporate profits to explore this, analysing financial statements of 1,350 companies listed on the stock markets of the UK, US, Germany, Brazil and South Africa.

They discovered nominal profits averaged at least 30 per cent higher at the end of 2022 (Q4), compared to the end of 2019 (pre-pandemic).

Companies that were amongst those increasing their profits most after the pandemic include (all converted to £):

• ExxonMobil, whose average annualised profits rose from £15 billion to £53billion
• Shell, whose average annualised profits rose from £16 billion to £44 billion
• Glencore, whose average annualised profits rose from £1.9 billion to £14.8 billion
• Archer-Daniels-Midland, whose average annualised profits rose from £1.4
• Kraft Heinz, whose annualised profits rose from £265 million to £ 1.8 billion

A rise in nominal profits need not imply that firms have raised their profit margins, the report says; for many it is the result of passing on their higher costs to consumers, maintaining the same degree of profitability (as a percentage of nominal sales) - while squeezed wage earners across the economy took losses.

But there is evidence that some stock market-listed firms not only protected their margins but also increased them, not only passing inflation on but further amplifying it.

The market power held by a small number of companies can be a significant factor in profitability, the research found. In the UK, 90 per cent of nominal profit increases during this period occurred in only 11 per cent of publicly listed firms. Many other companies experienced a reduction in profits.

Researchers found that if companies accepted a hit to their profit margins – similar to that endured by wage earners – and stopped trying to fully pass on their higher costs to others - then ‘pass the parcel’ inflation would decrease. Such inflation accounted for about three-quarters of UK inflation at the end of 2022, according to Bank of England research.
...

Revealed: How powerful companies are amplifying inflation through their profit margins

The role of ‘excess profits’ by dominant companies in exacerbating inflation is revealed in new report Driven by a small number of firms, business profits rose by 30 per cent among UK …

www.ippr.org

 

[Casey Jones]

Bubbles in the think tank.

Hopefully, they don't really believe that - because if they do, they're too stupid to be out without a leash, much less occupying a chair at a "think tank." It's put out there to distract and deceive the gullible...one hopes. Because basic high-school-level understandings of economics would disabuse them.

What it DOES tell us, is that said Think Tank is in the stream of the gusher of seigniorage - benefitting from an unsustainable debasement of currency via money-printing and distribution to insiders - persons and groups.

 

[pmbug]

Overall corporate pre-tax profits (excluding the Federal Reserve Banks), jumped by 3.4% in Q3 from Q2, and by 5.5% year-over-year, to a record seasonally adjusted annual rate of $3.45 trillion, fueled by profit spikes in a number of industries whose figures the Bureau of Economic Analysis released today ...
...
During the surge of inflation in 2021 and 2022, price increases were outstripping cost increases by extraordinary margins, hence the spike in profits. Then there was a lull in Q1 and Q2 this year, and now it’s starting all over again:

Surging profitability during a period of big inflation is a sign that companies have leveraged inflation to their advantage, hiking prices much faster than their costs went up, and thereby doing their part in fueling inflationary momentum. And they’re able to do it because their customers are willing to pay those whatever-prices.
...

More:

Inflationary Aspects of Spiking Corporate Profits by Major Industry: Starting All Over Again, Good Lordy! | Wolf Street

 

[Goldhedge]