10% food inflation, Fed rallies on hope inflation is over and report on Orr a blame game of grandstanding
I’ve been arguing all year that food inflation would hit 10% by December.
That’s a lot for Adrian Orr to chew over as a lower than expected CPI rate came in from America which staged a staggering 1200point rally on Wall Street, which reeked of desperation rather than a true change in economic fortunes.
The Fed has made it clear they intend to smash inflation and pretending that a slightly lower CPI is the sudden spark of life investors have been waiting for seems vacant in its optimism.
The impact of importing inflation as ‘Just-in-time’ supply chains change into ‘Just-in-case’ supply chains is yet to be felt alongside the full economic troubles of China and the dire economic issues Europe will face this winter thanks to Putins dreadful war in the Ukraine.
Interest rates must continue to climb as food inflation continues to rob people of their ability to eat.
The report into the Reserve Bank is a blame game grandstanding to smear Orr.
The naked truth is that we were in a once in a century pandemic and they threw everything at it, should Orr have raised interest rates sooner? Sure, everyone should have, but the game of printing money and pretending there was no inflationary consequences of that was being played by every Reserve Bank Governor around the planet, pegging that all on Orr is stupid.
Orr has done as well as the situation allows, the question is has inflation peaked (as we have been told since March) or is it pausing before another explosion of inflation?
If it is just building for a new spike, we have to seriously start asking deeper questions about where capitalism is going.
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Given CPI NO LONGER genuinely measure inflation and massively understates it, and that the present fiddled-CPI allows for all sorts of manipulation, this ‘drop’ wil turn out to be an anomaly.
Go to Shadowstats.com, John Williams if you want to know more about such manipulation, fiddles etc etc and a more accurate idea of true inflation.
We are NOT comparing apples with apples, when looking at CPI, and haven’t done so for a LONG long time (20-30 years ish).
Wait until Biden stops using the USA’s ’emergency oil reserves’, to keep inflations lower than it should be, now that the mid-terms are over. Then let’s chat about the understated USA CPI figures.
CPI is a PURE fiction used by politicians to be able to lie even easier than normal.
The emperor/king has no clothes on.
This is correct. Once Biden can no longer run down the SPR to goose oil prices (and he’s getting very close to the minimum allowable reserve now), petrol/diesel prices will spike. Given that energy is behind every $ or GDP, you can expect inflation to resume (literally nothing can be manufactured/delivered/mined without energy which will continue to be fossil fuels for the foreseeable future because they are a fraction of the price of alternatives even if they double from here).
From shadowstats.com
Based on last month’s Third-Quarter 2022 CPI-W inflation, the 2022 Social Security Cost of Living Adjustment (COLA) headline increase was set at 8.7% for payments beginning January 2023; per the ShadowStats alternate inflation estimate, it would have been 17.0%, if the CPI-W calculations had not been redefined following the CPI Inflation and COLA spikes of 1980/ 1981.
…………..(my interpretation) ….In other words, if the Govt hadn’t fiddled the CPI figures and the way they were calculated back in 1980/81, inflation would be stated as being 17%….i.e. double.
NZ (and other western world USA-puppet states) will be doing similar, so CPI is most probably nearer to 20% than 10% AND RISING.
I can’t edit my post
typo correction………..’and instead’ used…..
Don’t worry we have plenty of 1 million dollar plus spec houses that workers working on NZ wages can’t afford.
Our wages are lower than OZ and Singapore while our interest rates are much higher. Rents are lower than other countries, but when people can come into NZ and also sponsor in visitor permits for partners and children based on a family income of NZD $43k a year, clearly there is a problem, Houston. https://www.immigration.govt.nz/new-zealand-visas/apply-for-a-visa/tools-and-information/work-and-employment/employment-skill-bands/employment-skill-bands-for-essential-skills-work-visas
Don’t worry apparently there is a cruise ship with 800 Covid cases about to disembark in OZ. Really???? Seems like there is not much sense or interest in protecting the economy these days from government Dimwits and Neolibs around the world. https://www.nzherald.co.nz/world/majestic-princess-cruise-ship-with-800-covid-cases-set-to-disembark-in-sydney/R4QFZFCNFJED7IVZ5DV635WXJA/
Start growing vegetables – between another outbreak of Covid, lower and lower wages and outrageous food prices, sounds like it is necessary.
“…we have to seriously start asking deeper questions about where capitalism is going.”
No Shit…really, is there a slight problem with monopoly capitalism or something?
The calculation of the CPI keeps changing. About a half a century ago after the Department of Statistics had been modifying the program as usual, it was found that there was an error in the calculation. The changing program was not well maintained so the error in the source program could not be traced. Special software had to be imported to de-construct the machine language program with synthetic block diagram. I think they managed to fix the problem before the politicians got to know about it.
Bernard Hickey sums this up beautifully and non partisanly on the Kaka today. Go there for a free to non subscribers in depth review.
Basically pros and cons but concludes the Govt and RB are hand in glove and that they are deaf to the needs of the country in any wider sense.
A failure of capitalism or a failure of government interventionism?
The current inflation is an own goal by governments that imposed largely pointless and oppressive lockdowns then had to print money to pay for it all.
It’s also a result of the Europeans allowing themselves to become reliant on Russian gas. How are those climate change policies working out for you Europeans? I hope you fucking freeze this winter because you deserve it!
modern food is an industrial system of inputs and outputs – it’s all diesel and phosphate. it’s all needles and plastic.