Two weeks ago, we gave you our outlook on housing/shelter. We mentioned briefly in our Odds and Ends segment last week, the second leg in the relay of inflation - food. The three main components as we see, are housing, food and energy. The Federal Reserve gets away with the BS that these three are not considered in their matrix formula for inflation due to their high volatile nature. We have no one with the bravado to challenge their formula. Our basis is built into reality. Everyone needs those three to live. They are essential. We do not buy a computer every day, but that item is in their formula.
We can knock the Russians, the Chinese, blame the immigrants, but everything that is wrong begins with the Fed. They control the use of money. Lately, with inflation in the news, the Fed says it will act to fight inflation. Dear Reader, they are the cause of it. You cannot print dollars excessively without impunity. President Biden has the nerve to call our economy strong with record low unemployment. The only record that our government has achieved is record deficits. The president is ending tariffs which will guarantee a new record deficit. He is opening the borders. We will get more crime and gang warfare in our big cities. When we get a recession, we will begin to see record homelessness, our first proud school system reduced to third world status. Food banks will be our growing segment in society. Things are not looking good. Chris Rock won't be the only one slapped in the face. We all will feel the pain. It begins with the bureaucrats.
Unemployment at 3.6%?
Yes, according to government stats. However, if anyone looked deeper into the mechanism to determine unemployment, the labor participation rate tells us a different story. If one goes back to just 2002, the labor rolls showed 66.5% of us were employed. Today, it is down to 62.4%. Where did the 4.1% of us go? How many people is that? I can ballpark it for you. It takes about 150,000 to move one tick. This equates to roughly 6.1 million people out of work. Keep in mind that our population has grown in those 20-years. This means our estimate is on the low end of reality. These are just sample reasons why we at Evolution say that both of our political parties are corrupt. Anyway, we were going to get into food inflation.
First, I need a cup of coffee. Question? Is coffee food? To me, yes. The charts show coffee is consolidating on the high-end price range. I don't know about you, but I did not need the charts to tell me the price of coffee. My supermarket never puts it on sale. It constantly cost more. I took to the dollar store to escape inflation. They had Spanish coffee in small package of 6-ounces. I did the math. It would be cheaper to buy 4 of these packages and get 24-ounces than buy my larger brand at the supermarket. However, inflation just killed my alternative.
Dollar Tree Store...
is no more. The store sold itself by claiming that anything it sold, it would only cost a dollar or less. No more! It should now be called the $1.25 Store. They raised all their prices by 25%. This is the clearest picture that you can get on food inflation. Even some of the Federal Reserve Governors are coming out to say that they see inflation for March coming in at 9%. They will BS about a half-point interest rate increase. People, you can get a better yield on the 3-year T-Bill than on the 30-Year note. This is revealing to you the truth on inflation. It is only in the early stages, but again, no one has the bravado to tell it like it is. The Fed Chairman, Powell will try to manipulate the market and media by declaring that inflation is peaking. We predict this will be his follow-up to the "transitory" remark on inflation that he gave. We told you before that the CEOs of food companies will be raising their prices this spring. Since the bottlenecks in the supply chain have not receded, we see higher prices across the board. Here is another insight to view inflation in food prices. Yesterday, the top thirty traded stocks were all down. They are selling everything. Now, I mentioned a food fund (DBA) in last week's piece. In the down day of yesterday, it was up. Next week, we will look at the third leg in the relay of inflation - oil. Peace.
