Category: Economics

Different Universe, Part 17

Economics

The usual snow job on the economy:

The CPI report shows that inflation rose four percent from last May, which is less than half of what it was at its peak in 2022, when it hit 9.1 percent year-over-year in June. Economic forecasts had predicted inflation would come in at 4.1 percent, meaning that the current economic climate is doing better than expected.

Uh huh.  Considering that our “expectations” were of the Four Riders genre, that doesn’t mean much.  And it gets worse:

However, core CPI – which excludes volatile food and energy prices – rose 5.3 percent from last May, which is a far less-rosy picture of the state of the economy.

Yeah, I’m so glad that the first inflation “estimate” just happens to exclude the two categories which affect ordinary people’s lives the most.  And for the record, I’m still of the mind that the “5.3 percent” inflation rate is only about a third of what I’m seeing at the grocery store — i.e. 15 percent would be closer to the mark, which is about how much my closely-budgeted grocery spend has gone up in the past three months.

By the way: has anyone priced tires recently?  Holy shit.

When the history of this era comes to be written, one of the most egregious falsehoods to be exposed will be the “official” inflation rate.

No Chance

Africa, Economics

A couple of people sent me this article, and I see that Insty referred to it as well:

South Africa’s power blackouts: Solutions lie in solar farms, battery storage at scale, and an end to state monopoly

Rolling blackouts are costing South Africa dearly. The electricity crisis is a barrier to growth, destroys investor confidence and handicaps almost every economic activity. It has raised input costs for producers and retailers, and has triggered a new round of inflation and interest rate increases.

Any solution will obviously incur cost because it will require the adoption of new technologies, such as large-scale grid-connected that are linked to battery energy storage. But these technologies are expensive.

…which means that none of this is going to happen.  South Africa has been plundered by the Usual Suspects until the coffers are pretty much empty, taxes are about has high as can be levied without causing collapse — what happens when only about 15% of the population is at all economically active, and only 0.5% of taxpayers contribute over 85% of tax revenues.

Even in a perfectly-ordered society (which South Africa isn’t even close to), the job of fixing its power woes would be be pretty much impossible.  As things are… not gonna happen.

And let’s not even think about foreign investment.  While the amounts are quite small, relatively speaking, one always has to factor in corruption — which takes anywhere from 40% to 60% off the top — and loans will never be repaid.  Not even China will countenance investment, given that their previous forays into Africa have been, so far, disastrous.  And South Africa is not Sri Lanka.  They can’t be bullied into compliance with the Belt & Road program because the distances are just too great and the population large and resistant.  (China could say, “Okay, you’ve defaulted on your loan;  give us all your platinum”, whereupon South Africa would just say, “We can’t get the ore to the port;  come and get it.”)

Even if South Africa were suddenly to discover vast resources of lithium (similar to its vast coal reserves), they’d never be able to get the stuff out of the ground.  One would think that in a country with huge gold mines all over the place, a few lithium mines would be no problem.  Alas, the gold mines are now producing only about 40% of what they used to produce under the eeeevil Apartheid Government.

Those giant solar farms the article talks about?  They’d be stripped for parts within a month of installation.  And yes, surround them with security guards — except that the guards would become the new entrepreneurs, flogging solar panels and batteries to householders desperate for electricity.

As with any African catastrophe, there is no workable solution, no possible way that any kind of fix will be either implemented or have any kind of longevity.  If even ESCOM, an established, one-time robust powerhouse [sic]  that once delivered South Africa’s excess electricity to all its neighbors can be mismanaged into complete collapse, why would some newfangled, sophisticated (and fragile) eco-friendly solar system fare any better?

To paraphrase some guy’s earlier words:  let (South) Africa sink.  They deserve no better.

Summing It Up

Economics

The problem with large numbers is that most people can’t comprehend them.  Here, for example, is a summary of our national economy by John Hawkins:

When it comes to the deficit, this year the federal government is expected to take in 3.86 trillion dollars in revenue (which is iffy) and is expected to AT LEAST have a 3 trillion dollar deficit (it will probably be much higher). That’s on top of our current debt which is at $28.7 trillion. If you count the unfunded liabilities the government has such as payments for Social Security and Medicare, estimates vary, but it may very well be closer to 135 trillion dollars.

The problem with millions is that few people will ever be in direct contact with that number (unless they’re looking at the odds against winning a lottery).  With billions, that distance (and therefore ignorance of the scale) increases exponentially.  Trillions?  Fuggeddabahdit.

Fortunately, Hawkins comes to the rescue in his very next sentence:

To put this in terms that are easier to understand, imagine your Uncle Sam is making $100,000 per year, spending $200,000 per year, is already more than $700,000 in the hole, and has another $3,000,000+ that he’s promised to people.

Now that’s perfectly understandable.  And to make things worse, there’s the attitude of our beloved Gummint towards this looming catastrophe:

When you ask him about it, your uncle tells you that he’s rich and so he has no plans to EVER dramatically cut his spending as long as people will keep loaning him money.

So the Day of Reckoning approaches.

I wish I could offer some kind of solution or hope, but I can’t.  I can only suggest that we stock up on food and ammo.  Lots of both, but especially ammo.

Note:  Hawkins’s larger point in his post is that bankruptcy is a catalyst for revolution — and it may even be a larger catalyst than political differences.  He’s right.

Juxtaposition

Economics, Mocking Furriners

Here are three headlines:

…and it is:

…but wait!

U.S. Govt spin:  “See?  We’re ten times better than the Euros!”

Ordinary Americans:  “In so many ways.  Now shuddup and fix our economy — or better yet, get out of the fucking way and let us fix it ourselves.”

We’re going to need 3-4% quarterly growth just to catch up with the Trump years, and there’s no way we’re going to achieve that under the current Administration.

Parallel Universe

Bad News, Economics

And in yet another flight of fantasy:

Consumer inflation the past 12 months has increased 6.0 percent, down from 6.4 percent a month ago—a 0.8 percent increase from Feb. 2022 just fell off the 12-month chart reading—according to the latest data compiled by the Bureau of Labor Statistics as the Federal Reserve continues to eye further rate hikes in order to tame what has been persistent inflation.

Uh huh.  Six percent, hey?

A 2 percent decrease in gasoline and a 13.6 percent decrease in used cars and trucks was offset by a 9.2 percent increase in fuel oil and a 5.8 percent increase in new vehicles. There was a whopping 12.9 percent increase in electricity and a 14.3 percent increase in utility (piped) gas service, indicating continued high demand for energy services. There was a 9.5 percent increase in food, plus an 8.1 percent increase in shelter and a 14.6 percent increase in transportation services, plus a 3.3 percent increase in apparel, a 3.2 percent increase in medical care commodities and a 2.1 percent increase in medical care services.

Let’s not get blinded by these carefully-constructed lies, here.  Gas prices went down for about two weeks, and then shot up again.  Supermarkets have published reports about 30-, 40- and 50 percent increases in commodity items,

True inflation is running well into the double digits (high teens or more), and we consumers are being bent over the government’s desk and shafted without lube.

Enjoy your day.

 

Incremental Costs

Business, Economics

Soft-headed Lefties are always going on about the evils of cheap labor, using children as workers, and paying “fair wages”.  Then there’s the use of agricultural pesticides to improve yields, which is doubleplusungood.  Of course, they still expect to pay low prices for, say, their fruits and vegetables, as these neo-Marxists don’t have the first clue about how an economy actually works.

So we come to this breathless headline:

Jeremy Clarkson’s Diddly Farm Squat Shop is over 200% more expensive for essential items than the nearest supermarket.

Well, yes.  He pays his staff (“workers”) well, doesn’t use pesticides, and charges prices that will yield his business a profit so that he can afford the costs of complying with government regulations.  (He does not pay himself or his shop manager / girlfriend Lisa a salary, for obvious reasons, although technically speaking he should.)

All that said, the quality of the farm shop’s products is beyond reproach — fresh milk, vegetables and fruits, homemade honey from his own bees — and all those things that the high-end Waitrose chain, for example, have traded on for years.

And so his prices are higher than those of the local supermarket (Aldi, a “budget” operation if ever there was one) only six miles away, leading one to ask that if his prices are indeed that unbearably high, why are there long lines of people queuing up to buy the stuff? (Answer:  because it’s the Diddly Squat brand.)

One would question why the “researchers” chose to use EDLP (everyday low price) Aldi rather than pricey Waitrose — answer:  because the price disparity might not be that great, if there was any disparity at all… oops.

And let’s not forget that The Greatest Living Englishman is a frequent target for The Envious Set, because he’s wealthy and successful — just not as a result of farming.

Journalists… those who talk about everything, but know absolutely nothing.