There are a few stories circulating and all of them have merit. The latest was last week, President Biden announced ideas for tax increases. You had to know this is coming. They don't call the Democrats, "Tax and Spend" for nothing. We have had a series of spending bills with two more in the works. Now, the tough part of governing, how to pay for it?
With that said...
the other stories or predictions if you will, are showing the truth in the ink. Inflation.
In recent pieces we, at Evolution have pointed out the rising prices in commodities. However, inflation is roaring in what is referred to as second tier products. Examples: fuel and chemicals, steel and plastics all rose by 4%. This is twice the Fed inflation target. The cost for these products is 12.5% higher than last year. Then, there is the cost of shipping and if you recall, the screw-up at the Suez Canal? Anyway, here is a capsulation. *phosphates rose the most since 2011. *steel mill products rose the most since 1939. You better reread this date. *organic chemicals rose the most since 1974. *plywood rose to its second highest level since 2005. *plastic resins rose the most since 1974. *hardwood lumber rose the most since RECORDS began in 1947. Yeah, you can reread this line again.
You think this is a one time event like Jerome Powell claims? Yeah, that is what all those phonies claim like Bernanke who said the housing problem is contained in 2007 and like the shills said about the dot.com prices are only in a correction back in 2000. Tesla had to raise the price of its cars 4x (four times) this year. Going back to raw commodities, consider the continuous price rises since May 2020. *steel is up 182%. It is now $1354 per ton - an all-time high. *aluminum is up 58%. *copper is up 83%. *platinum is up 55% and palladium is up 45%.
So, what, you say. Well, the cost of lumber now adds $24,000 to the price of a new home. What I do not understand is why don't they allow loggers to thin the forest to create jobs, lower wood costs and stop wild fires?
6% Unemployment?
The figure makes me laugh and then, sickens my stomach. We have 17.4 million Americans receiving unemployment benefits. We also know that many jobs do not qualify for benefits or the amount is so small that it does not worth the effort. You have taxi drivers, real estate sales and almost all sales people, waitresses and self-employed personal. We have millions who have returned to their parents or grandparents home to live. How do you know this, you ask? The answer comes with the 2000 Census. In that year, the US had 217 million Americans in the working force. Today, Powell smiles as he says the US reached, "150 million" in labor participation. Do the math. As a nation we have more people in population than in 2000 and less working. Where did those 50 million go? (150m working less 17.4m collecting benefits=167.4 million) 50 million are uncounted for? By the way, Americans are getting through this period with their credit card. Household debt is at a record $14.6 trillion. They are learning from our government so-called leadership. The federal government deficits after just six months into the year is twice as high during the same period as last year. By the way, last year was the worst year on record.
Getting Hosed...
All the Amazon workers in Alabama will learn the hard way that unions are for workers to which is why Amazon preaches hatred for unions. You will experience the same crap as Boeing workers. Even though they were union, they believed the lies of management. As soon as they voted for Boeing's work proposal, the jobs got moved to a non-union state in the south. Mark my words, in less than five years, your jobs will be gone!
Speaking of lost jobs...
McDonald's is closing locations in Walmart stores. They formed a partnership and Walmart gave the Golden Arches a site in the front of their stores. The store count drops from 875 to 630 and falling...
Craziness of market...
A deli in New Jersey is valued at over $103 million. Get this! The store only had $35,000 in sales for the last two years and lost $756,000 during the same period. In addition, it has warrants which by the present price of the stock would value the store at over $1 billion. What was it the GUMP use to say? Oh, yeah, "Stupid is as stupid does." Thank you, Forrest. You can see this buying stupidity reflected in the Schiller CAPE which shows a price-to-earnings. It is now $37.49 or twice the historical S&P 500 average. Stupid is as stupid does - Peace.
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