Inflation Inferno Mercilessly Burns up the Fed's Backside
As Maui's town of "the merciless sun" is laid to waste, the fires of inflation rise again, too.
“Ooops. We were only off by $200-billion in our last upward revision of the US deficit.”The Congressional Budget Office’s new estimate of the Biden shortfalls climbs again, this time to an annual deficit of a mere $1.7-trillion. But, hey, at least not paying for anything as we do it is creating a boon in green-energy development and manufacturing. It is amazing what economic “strength” you can build when you suck it all out of your grandchildren’s pockets!
It turns out tax revenues have fallen off a cliff, even though the last GDP report from the Biden government claimed gross domestic product was rising yet again. One has to wonder how the populace and corporations can be making so much less money this year when GDP is rising. Doesn’t add up. The huge discrepancy coming in from what tax revenues are showing was one of three major key factors I laid out in a recent “Deeper Dive,” explaining why GDP should not be trusted at all because other equally important macro measures say we are already in a recession. GDP is lying.
Meanwhile, the labor market is also continuing to do exactly what I said in other “Deeper Dives” we should expect during this recession, which is sure to keep the Fed tightening longer into recession than the economy can bear, “soft landing” fantasy not withstanding. While new unemployment applications did tick up a hair in today’s news, the rise was far too insignificant to mean anything to the Fed in terms of whether it stays focused on its inflation mandate or switches to becoming concerned about its labor mandate.
For now, the broken labor gauge still gives no leeway for the Fed to back down from fighting inflation, which rose again in today’s news. While the inflation uptick was no more than expected (and by one metric a touch less), it was a move in the wrong direction all the same. Stocks rose because the increase in inflation was one notch less than expected, but the overall story is that the accomplishments of the Fed’s inflation fight have stalled as inflation has started to rise again. Most notably, as far as the Fed is concerned, the Fed’s primary core inflation gauge rose (in both services and goods) for the first time since the Fed’s initial battle successes:
This directional change, which I explained in an earlier “Deeper Dive” as something we could anticipate because of a reversal in the “base effect” from last year, leaves the Fed little room to back down from battling the blazes out of the inflation inferno it originally fueled and ignited. We pay the price of the Fed and feds inflation and we pay the price of battling it in the form of the economic ruin and asset losses we will all bear because of that fight. (Of course, we are mostly losing the “value” of assets that were artificially pumped up in the first place.)
Speaking of battling blazes, Maui’s most charming town was almost completely destroyed at its core in the fire that started the night before last. Of course, some of the mainstream media made sure to insert the now ubiquitous narrative in every bad-weather story that the fires were due to a drought, which was, in turn, caused by human climate change.
I hate to see the loss of Lahaina, one of my favorite friendly Hawaiian towns, which I have visited often; but the idea that it took human-caused climate change to bring a drought like this to Lahaina is just a lie. The town’s name is Hawaiian for “the cruel sun” or “the merciless sun” for a reason: it is always scorching hot to the point of crispy in that leeward part of Maui in the summertime. Coloquially, some say “Lahaina” is Hawaiian for “furnace” or “oven.” That is because there is NO summer when it is not hot enough to cook you in Lahaina or dry enough for a fire like this to break out.
We don’t even know, yet, if this was a wildfire that started in brush or how it started . Yet, even though the story says the cause of the fire is unknown, the writers of one of the stories pretend to know that the CAUSE OF THE CAUSE was human-caused climate change.
What made the difference between this year and any other for the fate of Lahaina was hurricane-caused winds from Dora — that much we do know — hundreds of miles offshore, pushing the blazes along at 60 mph while also making aerial fighting nearly impossible, combined with the fact that the fire broke out in the night. It became widespread before the call went out, and all fire equipment was all already being used on other wildfires in the dry, leeward side and in the uplands.
Is this year worse than normal for droughts? Sure, in many areas like Arizona and Texas and probably Hawaii; but there a lot of lies being spread, too. Whenever you read the same refrain in every story about bad weather, and the writers now just assume as a given it is due to “human-caused climate change,” you know the media is being used (willingly) to push a narrative.
Our own Governor Inslee in my state has claimed climate change is causing an emergency drought in my county, while I provided photographic proof that we are FAR from being in a significant drought. Yes, rains were down in June, but now they are back. The whole county remained as green as ever in June and July, and the river was actually running a little high in late July, not low as the governor lied and claimed. Now, in the middle of August, its sandbars are finally starting to show — something that ALWAYS happens by the middle of August and usually to a visibly greater extent.
While I know first-hand that particular “human-caused climate change” story is an outright lie by our liberal governor in order to seize ecological control over more water rights, something he has been doing for years, I know the stories of extreme drought in AZ and Texas are true. We have family visiting from AZ right now. One of them is in his fifties and has lived in AZ all of his life and is NOT a believer in climate change, and even he says he’s never experience a period so hot or that lasted so long in Mesa/Phoenix where he lives. Trees are dying. The limbs are falling off aguaro cacti. It’s horrible.
It may be climate change and it may even be somewhat caused by humans (or NOT), BUT, with nearly every story pushing the climate-change refrain as a presumed fact even when no evidence of that cause exists (such as in “Oven,” Hawaii) then you have plenty of reason to question what is being shoved at you.
As a note of good news, the famous banyan tree in Lahaina, which is one of the largest in the world, spreading over almost two acres and a quarter-mile in circumference, will likely survive the scorching it took as a sign of hope and life for the future. And hope in the face of an inferno is about all Lahaina has left right now.
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