ECONOMICS: Measuring the FED’s inflation over time

Saturday, February 3, 2024

https://schiffgold.com/commentaries/wildest-inflation-red-flag-vegas-table-limits/

Wildest Inflation Red Flag: Vegas Table Limits | SchiffGold

*** begin quote ***
 
Take the Las Vegas Strip. Casinos on the Strip, long known for trying to take the money of everyone from the highest high-rolling whale to the coupon-clipping low-roller camped out at Motel 6 or Excalibur Casino, are now finally admitting that some dollars aren’t worth the effort of taking. In August, the Wall Street Journal reported on the declining number of tables where you could play blackjack in Las Vegas while the amount of revenue earned from blackjack stayed high even as casinos offered worse rules to players, such as paying out 6:5 when a player receives a “blackjack” rather than the traditional 3:2. Strip casinos are also doing away with low table limits, meaning that players that want to risk $5 or $10 on a single hand of blackjack are struggling to find a game.
 
*** end quote ***
 
​Wow.  I remember 25¢ craps where I learned to play.  And 10¢ a way Keno on 15 lines.  Sigh.  I miss the cheap buffets, “free” rooms, and $1 per seat “shows”.  Progress?  I think not; INFLATION due to the FED and Gooferment spending.
 
#ENDTHEFED
 
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ECONOMICS: Are EVs the modern day Edsel?

Thursday, December 21, 2023

https://www.ericpetersautos.com/2023/12/17/one-third-as-far/

One Third as Far
By Eric – December 17, 2023

*** begin quote ***

But the answer – after much study – probably has to do with people not wanting to buy used devices that don’t go very far and take very long to get going again. Particularly because the batteries that power these devices are used. And used batteries hold less charge – on their way to holding none. Rendering the device incapable of going at all. And the cost of replacing that battery with a new one to power the inert device is not “rather competitive.”

Scientific Americans says “The impact of the used EV market can’t be understated.” And that’s certainly true – as used and unwanted and so unsellable battery powered devices with wilting batteries accumulate and languish on used car lots all around the country – alongside the brand-new EVs that are accumulating and languishing on dealership lots all around the country.

Scientific American says nothing about the potential “impact” of this on the car industry. Or on the economy – that is to say, on all the people whose livelihoods depend in one way or another on the manufacture and sale of cars – after the car industry collapses as a result of being pushed, Soviet-style, to build as many battery-powered devices as can be shipped (but not sold) as the factories can churn out.

*** end quote ***

Doesn’t make “economic” sense.  These “cars” are an ecological disaster when they are made, when they are used, and finally when they are junked.  I watch them on the road and they are “virtue signals” until they have to be plugged in.  Every once in a while, I see one with a dent and wonder when is it going to ignite.

Argh!

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ECONOMICS: Big deffered contract takes a big risk?

Thursday, December 14, 2023

https://www.dailymail.co.uk/sport/mlb/article-12853145/baseball-fans-slam-shohei-ohtani-deferred-contract.html

Baseball fans SLAM Shohei Ohtani’s ‘league-killing deal’ after it was revealed he will defer $680m of his eye-watering $700m contract… as rival supporters blast MLB’s ‘downright laughable’ decision to give green light | Daily Mail Online
By Jake Fenner For Dailymail.Com
Published: 23:39 EST, 11 December 2023 | Updated: 00:11 EST, 13 December 2023 

*** begin quote ***

  •     Ohtani’s deal will see the bulk of the contract paid out after it ends in 10 years 
  •     Baseball fans were irate at the structure and that it was allowed to happen 

*** end quote ***

The Dodgers must have channeled their inner Bill Belichick.  This will get everyone’s shorts in a knot.  Especially the politicians and bureaucrats in the Pepuls Republik of Kaliforkneeah.  That’s a lot of money they can’t steal.  And it’s a big risk to take on the financial stability of the Dodgers and the future value of the USD.  Wonder what kind of Futures Contract he’s buying to protect it.

While I understand the motivations behind “stretching the rules”, it’s NOT without some significant risks IMHO.

It violates my favorite heuristic (rule of thumb; “common sense”; pov) that one should always “take the money and run”.  

It’s not beyond the imagination to conceive of the politicians and bureaucrats of the Pepuls Republik of Kaliforkneeah creating a special income tax rule for “deferred compensation”.  Watch for it!

AND, inflation AKA dollar depreciation is for SURE to erode that deferred wealth.

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ECONOMICS: The “rich” can move to avoid taxes; what about the “little” people

Tuesday, November 14, 2023

https://jeffjacoby.com/27330/jeff-bezos-moves-to-florida-leaving-washington

Jeff Bezos moves to Florida, leaving Washington — and its rising tax burden — behind
by Jeff Jacoby  — The Boston Globe  — November 8, 2023

*** begin quote ***

But as the Tax Foundation’s lead researcher, Jared Walczak, immediately observed, Bezos is almost certainly going to save money — a lot of money — once he is no longer subject to Washington’s tax laws.

To begin with, Washington has a new capital gains tax, which was upheld by the state’s highest court in March. The tax takes a 7 percent bite of all investment gains above $250,000. In 2020 and 2021, when Bezos sold several million shares of Amazon stock, the proceeds totaled $15.7 billion. Assuming he disposed of stock he had owned since Amazon went public in 1997, Walczak calculated, Bezos “saved nearly $1.1 billion in taxes by selling those shares before the new state capital gains tax went into effect.” By relocating to Florida, he ensures that future stock sales will likewise remain untouched by Washington’s new capital gains levy.

That’s not all.

Washington had no estate tax during the years when Bezos was building Amazon into a commercial giant, but that changed after 2005. Now Washington has the steepest death tax in the nation, with a top rate of 20 percent on estates worth more than $9 million. Florida, on the other hand, has no estate tax at all. For a man with a personal fortune of more than $160 billion, the move from Washington to Florida could be worth $30 billion or more to his heirs.

*** end quote ***

The “rich” can move to avoid taxes; what about the “little” people … …

… … who can’t afford to move.  Don’t think that the taxes are only on the “rich”.  Inflation ensures that everyone is hit.  Maybe not equally, but enough to hurt.  And, they have no choice but to stand and take it.

Argh!

—30—

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ECONOMICS: Companies shouldnt’t change the Customer’s experience without very careful consideration

Friday, October 27, 2023

https://nypost.com/2023/10/18/delta-air-lines-backtracks-changes-to-its-skymiles-program-after-customer-revolt/

Delta Air Lines backtracks changes to its SkyMiles program after customer revolt
By Associated Press 
Published Oct. 18, 2023, 6:36 p.m. ET    

*** begin quote ***

Henry Harteveldt, a travel analyst at Atmosphere Research Group, said some SkyMiles members will still be unhappy about Delta moving to an entirely spending-based program, and will view even the reduced requirements as too rich.

“I don’t think these concessions are going to go far enough to placate the disgruntled Medallions,” he said. “Given the mercenary mindset that many travelers have, they will fly other airlines and not look back.”

Less than two weeks after Delta announced the SkyMiles overhaul, Bastian announced that the Atlanta-based airline was taking another look at the matter. He said Delta “probably went too far” with the proposed changes.

*** end quote ***

File this under “If it’s not broke, don’t fix it”.

You’d think that a CEO, or more likely the CFO, would have an eagle’s eye focus on <synonym for the act of procreation> with the Customer experience!

Was anyone watching Bud Light’s self-inflicted suicide?

Customer reactions are in vogue now. People are saying ‘I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’ 

Don’t do anything to disturb that nice steady cash flow.

# – # – # – # – # 

‘I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’ I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell – ‘I’m as mad as hell and I’m not going to take this anymore!’ Things have got to change. But first, you’ve gotta get mad!… You’ve got to say, ‘I’m as mad as hell, and I’m not going to take this anymore!’ Then we’ll figure out what to do about the depression and the inflation and the oil crisis. But first get up out of your chairs, open the window, stick your head out, and yell, and say it: [screaming at the top of his lungs] “I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!” — the character Howard Beale played by Peter Finch in the movie Network (1976) 

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ECONOMICS: Bitcoin is the perfect vehicle for retirement?

Monday, August 7, 2023

https://bitcoinmagazine.com/business/bitcoin-is-the-new-retirement-strategy?utm_source=Bitcoin%20Magazine

Bitcoin Is The New Retirement Strategy

  • Secure in custody and monetary policy, Bitcoin is the retirement asset capable of withstanding the challenges of the future.

Robert Hall  —   Aug 17, 2022

*** begin quote ***

Bitcoin is the perfect vehicle for retirement for a variety of reasons. The first is that it is designed to appreciate into perpetuity. There are only 21 million coins that will ever be produced. This is called an inelastic supply. This means that as demand for bitcoin goes up, the price of bitcoin will also go up due to the scarcity of the supply. Did you know that there have been an estimated three million coins lost, so the total supply will be closer to 18 million by the time the last coin is produced in the year 2140?

The inelastic supply of Bitcoin is exactly what you want to see in a retirement fund asset. Investing your retirement savings in Bitcoin will secure your future retirement needs to the point where you can live comfortably.

Bitcoin is the perfect retirement vehicle because you are in control of your assets and not the bank or some assets manager. Believe it or not, neither of these actors have your financial interests at heart. Banks and asset managers are in the business of making money for their business and themselves. This means there are a bunch of hidden fees that you have to pay them to manage your money. This hides the actual cost of saving your money with a bank, and they will go to great lengths to ensure you don’t fully understand all the fees. These entities want to take your money and for you to shut up.

*** end quote ***

At risk of being annoying, I’d suggest you take the time to read this short article.

Now with the Gooferment inflating the currency by more than 2% per year, the purchasing power of your savings diminishes proportionally. 

I can remember penny candy, nickel cigars, and 30¢ a gallon gass. What has changed since the 1960’s? It is the value of a dollar. AKA the purchasing power of a dollar.

In the days before FDR took the USA off the gold standard, prices always declined. After that, because the Gooferment printed more money, prices always went up.

Before FDR, folks could save cash money (i.e., gold and silver coins) for their old age. After FDR, hold “cash” was a losing proposition.

This article recommends that you youngsters save some of your wealth in bitcoins. He even goes so far as to fore go putting that wealth into an IRA to keep it away from Gooferment rules — now and in the future.

I’ve always been a fan of “averaging into any investment” unless there was a strong reason not to. For my generation, IRAs and 401ks made perfect sense. But then, there were a lot of strategies that were good for “us” that I wouldn’t recommend (i.e., go to work for the Gooferment or a big company and stay there for 50 years to draw a pension). 

No one can tell you what is right for you. Even me. Our advice is based on our experience. Like a buggy whip maker telling his children that the family buggy whip business has a great future.

All I am suggesting is to read this article and lots of other ones. Then place your bets on what’s best for you. 

If you want to chat, fine. If you want to just ignore this, that’s fine too.

As always YMMV,
Crazy Old Ferd

# – # – # – # – # 

When I wrote this in August of 2022, I was convinced that the economy was going down due to the “value of the dollar”.  Nothing has changed my mind about the trajectory.  When the world “de-dollarizes”, then inflation will rocket up on steroids.

“For those looking for security, be forewarned that there’s nothing more insecure than a political promise.” – Harry Browne

Remember when Social Security was to be tax-free?  The Heritage Foundation found that many workers paying into the program end up with a negative annual rate of return, somewhere between minus –0.04 and –14.53 percent depending on one’s age. Younger workers with the most years to pay into the system and groups with below-average lifespans are the ones who have the poorest returns, a Heritage Foundation official says.

Your “investment” in Social Security may well return ZERO!

—30—

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ECONOMICS: Time for everyone to realize that they were defrauded by Social Security

Friday, July 7, 2023

https://www.americanthinker.com/articles/2023/06/the_worlds_largest_ponzi_scheme.html

July 2, 2023
The World’s Largest Ponzi Scheme
By David D. Schein 

*** begin quote ***

Americans are just beginning to see the tip of the iceberg of their own trillion-dollar Ponzi scheme, Social Security (“SSA”). Signed into law in 1935 by FDR during the heart of the Great Depression, workers were told that Social Security was intended to provide a safety net parallel to retirement systems that existed in Europe. The retirement age was set at 65. Americans were required to pay into the fund through payroll deductions their employers collected. Most Americans were “covered” by the system, and it was later expanded to cover household workers and others who were excluded initially. The system is structured to be a regressive income tax covering most workers’ wages up to $160,200 per year, with no limit on the parallel Medicare withholding.

When FDR was garnering praise for helping the working class, the average life expectancy in the United States was only 60.7 years. So, while most workers would pay into the system, few would live long enough to collect benefits.

In contrast, by 2020, the average American life expectancy had surged to 78.81 years. This is just one of the problems with the SSA’s structure that has brought America to the current financial cliff. Obviously, if most of the alleged beneficiaries would not live long enough to collect, it was a near-perfect scheme for its operator. The “baby boomer” generation, by expanding the system’s benefits and living longer, is tanking the system.

*** end quote ***

A private individual (Made-off) or a corporation (Enron) would be severely sanctioned but the Gooferment politicians and bureaucrats can retire on their Gooferment pension with complete immunity.

When will “We, The Sheeple” realize that they have been robbed?

Anyone who fails to plan for zero social security in their old age, will find SPAM a delicious luxury.

Pitchforks and torches anyone?

—30—

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ECONOMICS: Numbers don’t show that the inflation rate is progressive; how much more expensive things are getting over time

Sunday, April 16, 2023

https://tippinsights.com/bidenflation-rises-to-14-8-hurting-americans/

Economy — Opinion
Bidenflation Rises To 14.8%, Hurting Americans

  • Americans’ struggle with high prices continues in 2023.

tippinsights Editorial Board
April 14, 2023 . 10:48 AM

*** begin quote ***

But few media outlets provided context, partly because doing so would shed the Biden administration in a terrible light. So, we are happy to oblige and fill in the gaps.

The CPI inflation rate measures how much more expensive things are getting over time. The government calculates the increase in the CPI rate over 12 months, so the base for March 2023 is March 2022, and for February 2023 is February 2022.

In March 2023, the CPI index was 301.836, 5.0% higher than its base of 287.504 for March 2022. And in February 2023, the CPI index was 300.840, 6.0% higher than its base of 283.716 for February 2022.

Between February 2022 and March 2022, the base increased sharply by 3.788 points or 1.34%. Even though the CPI index increased by 0.33% between February and March 2023, the headline CPI rate dropped from 6.0% to 5.0% because of the “base effect.”

In other words, the rate seemed lower than it actually was because the base was higher in March 2022. Things were getting more expensive but more expensive at a slower rate than the previous year. Only in Washington is this good news.

*** end quote ***

Just go back in my blog and search for “penny candy”, “three silver dimes”, and the “twenty dollar gold piece that was an ounce of gold”.

Inflation makes each other dollar worth less.  Since the 60’s, the dollar has lost 90+% of its purchasing power. My sainted father in law put a fifty dollar bill in his wallet when he got married and was secure that he could pay his rent and feed his family for a month with that.  Sure, now it might buy two movie tickets and some popcorn but not much else.

How stupid are “We, The Sheeple” that we don’t see the Gooferment politicians and bureaucrats robbing us blind like the parasites that they are?

—30—

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ECONOMICS: 70 Everyday Scams — I’m not sure I agree with #64

Friday, April 7, 2023

https://www.boredpanda.com/scams-that-became-a-part-of-culture/

Social Issues
70 Everyday Scams That Are Likely To Stick Around Forever, As Shared By People Online Interview

Jonas Grinevičius and Ieva Pečiulytė

*** begin quote ***

The sign of a ‘good’ scam is that someone manages to weasel away your hard-earned cash from your wallet and you’re left devastated. The sign of a great scam, however, is when the victim doesn’t even realize they’ve been swindled. Instead, they sit there with huge smiles on their faces, marveling at what a great deal they just got. All the while, someone’s laughing behind their backs.

Meanwhile, some things have become so ingrained into society that some folks don’t even stop to think whether their money would better be spent elsewhere. Redditor u/efd71f03 sparked an interesting thread after asking the internet about what people “refuse to view” as scams because they’ve been a part of the culture for so long. From engagement rings to Ticketmaster fees, scroll down to check out their most interesting insights. Bored Panda reached out to the author of the thread, u/efd71f03, and they were kind enough to share their thoughts on culturally-embedded scams with us. Read on to see what they had to say.

*** and ***

#64

Buying life insurance when you’re not married and don’t have dependents. Stupidest decision you can make as a 20 year old early on life. What a waste of money and payments going down the drain year old early on life. What a waste of money and payments going down the drain

*** end quote ***

Not so sure I agree with that:  (1) a healthy 20 year old is insurable; an unhealthy 21 year old can be uninsurable; (2) There is a concept about buying while life insurance and using it like your personal bank; if I did it when I was younger, it would have made sense. (3) health and life insurance are transferring risk for catastrophic expenses; risks can be taken if done intelligently.

Not on the list but my personal favorite Ponzi scam is “social security”.

“Social Security Insurance”, (note the word insurance — even though it bears no resemblance to real world insurance), is a de jure Ponzi scheme paying current takers from current workers. What could go wrong with that (i.e., scope creep; aging population; longevity discoveries; political corruption; moral hazard). And, de facto, a wealth transfer from poor minority men to rich white women. All set up, by the D’s to create another permanent class of dependent voters (i.e., the third rail of politics). Also, it’s a “political axiom” that one someone gets a “benefit” it can never be taken away. Argh! What a load of “barbara streisand” aka <synonym for excrement>! Argh! Argh!

ihmo

—30— 

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ECONOMICS: illiquid assets should be “marked to market” of zero!

Saturday, April 1, 2023

https://www.zerohedge.com/markets/caution-better-part-valor-again

Caution Is The Better Part Of Valor… Again
by Tyler Durden
Friday, Mar 24, 2023 – 02:25 PM

Authored by Peter Tchir via Academy Securities

*** begin quote ***

I did not like what happened on Wednesday and reiterated that view as stocks were popping yesterday morning. Today, a relatively calm overnight session got spooked as European bank CDS (particularly contracts linked to sub debt) spiked. That continued into the U.S. session until headlines that Treasury Secretary Yellen had convened a FSOC meeting. Maybe something comes out of that meeting, but here are issues that I think resurface once that meeting is done, unless something surprisingly aggressive is done (I don’t expect that).

*** and ***

The “Unrealized” Mark to Market Losses

I remain dumbfounded by some of the duration risk that was obviously taken at, at least, one bank. The sense that I get, from talking to people is more time is being spent on what other issues could be out there?

*** end quote ***

One of the Managing Directors, that I respected from my days on Wall Street, was a real hard ass as a risk manager. I remember hearing many profound and LOUD screaming matches with traders and portfolio managers about “mark to market”.  As an IT guy I had heard the term, but didn’t grok (gestalt) it, until I heard some of his rants. (It was hard NOT to hear them screaming.)

His rule was, if someone said something was worth X and he didn’t think so  — especially if it was illiquid or had no active market, then he’d offer to put it in their personal portfolio at that value.  Otherwise, it was “marked to market” at ZERO.  (I really had to laugh when the eventually ended with “why would I want that junk in my personal portfolio?” Followed by the final nail in the coffin: “Why would the Firm want it in theirs at that price?”  I think those disagreements could have had tickets to watch that rival WWE matches.)

So, everyone should “market to market” all their assets as if you were a risk manager.  And, don’t think that your job is a risk-free asset. 

—30—

Note: A good post for April Fool’s Day!

# – # – # – # – # 

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