Janice Yellen is finally recognizing that the economy will be impacted by rapid inflation. This is before the additional trillion-dollar give-aways to Democrat friends will do to the already high rising inflation.
Only yesterday we reported that the Federal Reserve Chairman, Jerome Powell, was finally warning about inflation.
Today Janice Yellen joined the discussion.
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Treasury Secretary Janet Yellen acknowledged “rapid inflation” will persist for several more months after she repeatedly downplayed the risk of consumer price increases.
Americans can expect consumer prices to continue their rapid rise until returning to normal in the “medium term,” Yellen said Thursday in an interview with CNBC. But Yellen, along with top Federal Reserve officials, predicted inflation wouldn’t be a concern.
“We will have several more months of rapid inflation,” Yellen told CNBC. “So I’m not saying that this is a one-month phenomenon.”
“But I think over the medium term, we’ll see inflation decline back toward normal levels,” she said. “But, of course, we have to keep a careful eye on it.”
It’s really shocking that the leaders of America’s top financial entities are only now realizing that the US is having rapid inflation. We could see this coming a mile away after the massive spending bills the Democrats put in place and are planning.
Crypto: Senate Infrastructure Bill Targets Cryptocurrencies
Coindesk is reporting that the infrastructure bill pending in the US Senate has language that would redefine cryptocurrency brokers.
The language seems to expand the definition from large exchanges like Coinbase, Kraken, and Gemini, to include software and hardware wallet developers, multisig service providers, and possibly even crypto miners. This could impact anyone running a Bitcoin Lightning node since Lightning channels require multisig. Basically, if you open a Bitcoin Lightning channel, does that mean you’re a “multisig service provider”?
Bitcoin’s Lightning Network enables commerce for everyone by facilitating instantaneous transactions, so small businesses that take Bitcoin Lightning payments could be facing another tax and reporting hit from DC.
The bottom line is that legislators need to engage industry stakeholders to help craft better legislation or, better yet, leave the tax increases and onerous regulation out altogether.
Biden’s America: American Wages Drop by Nearly 2% as Inflation Spirals Out of Control
What a life. People sit at home, collect unemployment, relish their stimulus checks. It’s grand. But they have to know it can’t last.
One can ignore all the businesses screaming “Help wanted!” One can refuse to pay attention to the rumblings of another wave of coronavirus-related lockdowns and push away to abstraction the thought of the national debt. (Who can fathom all those zeros, anyway?)
But it can’t go on. That’s because there are laws of economics, and if you poke the economy beast enough, it will bite.
It’s now showing its teeth — and written on those teeth are the letters I-N-F-L-A-T-I-O-N. As prices increase, earning power, of course, drops.
It’s happening right now, and given the current administration in Washington, are you surprised?
Average hourly earnings technically increased from $29.35 in June 2020 to $30.40 last month, according to the U.S. Bureau of Labor Statistics.
But real average hourly earnings decreased by 1.7 percent over the same time period, thanks largely to the consumer price index — which measures the price of consumer items — rising 5.4 percent.
With the 1.7 percent real earnings drop, those earning $50,000 annually effectively lose $850 to inflation.
And it’s looking worse: While average hourly earnings rose by 0.3 percent from May to June of this year, according to the statistics bureau, the CPI also rose by 0.9 percent.
Mixing wages and inflation in its pot of economic numbers, the bureau spit out this sobering figure: Real average hourly earnings dropped by 0.5 percent in one month, between mid-May and mid-June.
Multiply that 0.5 percent by the number of months in a year, and you’ll see your paycheck evaporate at an annual rate of 6 percent.
You already know inflation is a problem if you’ve been to a gas pump lately or tried to rent a car or have been like the guy who works at a lumber yard and is referred to by a friend as “the lumber baron.”
And each tentacle of inflation can be traced back to some type of government action.
Car and truck rental prices are up 36 percent from a year ago. Stalled by the 2020 lockdowns, car rental companies sold a third of their fleets — 770,000 vehicles, according to New York magazine, which noted that now that demand is back, computer chip shortages mean there aren’t enough cars to be had.
The computer chip shortage developed because of the lockdowns, according to an analysis by the Detroit Free Press. Cars didn’t initially sell in lockdown, so auto manufacturers canceled orders for the chips that run vehicles and their accessories.
But when demand recovered, there weren’t enough chips for automobiles.
Meanwhile, retail gasoline prices are up about 96 cents since July 2020, according to the U.S. Energy Information Administration. Increased demand and higher crude oil costs have caused the price increase, according to AAA.
Whether valid or not, it’s hard to avoid the image of higher gas prices after the Biden administration canceled the Keystone pipeline immediately upon taking office in January, especially in the wake of the energy independence attained by the Trump administration.
At least there seems to be some relief when it comes to lumber prices, which have fallen 68 percent from late May, when the going rate was more than triple the pre-pandemic average price, according to Fortune.
Lumber price increases came about because of all those do-it-yourself projects people on lockdown initiated, according to Forbes. Lowered interest rates prompted more home building, and there were sawmill labor shortages (including those caused by stimulus checks).
Inflation is coming from two sources, Brian Jackson, an economist and accounting professor at Oklahoma’s Northeastern State University, told The Western Journal.
“The government is borrowing, selling treasury certificates to the Federal Reserve, and the Federal Reserve is having to pump dollars into the economy, of course, so by the quantity theory of money, inflation is going to follow,” Jackson said.
“Also, I think, really, all these stimulus checks that are going out — at least [to] the non-skilled labor force — is disincentivizing work, and so I hear stories all over the place of employers having a hard time finding people to work, so as wage inflation from that creeps into the supply chains at various points, you’re going to see product prices continue to increase.”
He also said the hardest hit in inflationary times are those on fixed incomes.
However, last month, Jerome Powell, chair of the Federal Reserve, predicted inflation would be short-lived, according to The Associated Press.
But no matter the rate of inflation or how long it continues to rise, so many of the problems can be traced to government policies, especially the lockdowns.
Some might argue the initial action to flatten the curve in 2020 was prudent because there were so many unknowns. But as evidence grew of the overwhelming survival rate of most people sick with COVID, suspending economic activity was irresponsible.
And yet, even now, there is talk of further restrictions, despite the ongoing business disruptions and growing inflation.
It’s a time requiring leadership, and given the Gallup assessment of the current administration, growing numbers of people aren’t finding it.
This article appeared originally on The Western Journal.
JUST IN: Senators Reach Agreement on $1.2 Trillion Hard Infrastructure Bill
A group of bipartisan senators on Wednesday reached an agreement on the $1.2 trillion hard infrastructure bill after Republicans stalled the measure last week.
Bipartisan = the American people are getting screwed
Senate Majority Leader Chuck Schumer said the senate could vote as early as Wednesday evening to advance the measure.
The motion to invoke cloture on the motion to proceed was not agreed to last week because Republicans said there was no money to pay for the package.
“Senators continue to make good progress on both on both tracks of legislation. Senators should be prepared to vote again on cloture on the motion to proceed to the bipartisan infrastructure bill as early as tonight,” Schumer said.
Republican Senators Portman, Collins, Romney and Cassidy met with Mitch McConnell Wednesday morning to work out the major issues.
The Hill reported:
Senators say they have reached a deal on the “major issues” in their bipartisan infrastructure talks, and expect to start debate as soon as Wednesday.
“We now have an agreement on the major issues. We are prepared to move forward,” said Sen. Rob Portman (R-Ohio), who led the negotiations for the Republicans.
Speaking to reporters with the five GOP negotiators after a meeting with Senate Republican Leader Mitch McConnell (R-Ky.), Portman touted the deal and described McConnell as being open to it.
Asked if they would finalize their agreement on Wednesday, Sen. Lisa Murkowski (R-Alaska) told reporters: “Yep.”
To start debate, Schumer will need the support of 10 GOP senators in addition to all 50 of his members.
If the bipartisan group is able to finalize its agreement, Schumer has warned that they will work through the weekend.
“To my friends in the press, I would cancel your weekend plans and then cancel all your dinner plans for the foreseeable future,” he said on Wednesday morning.
There in an additional $3.5 trillion budget resolution on top of this infrastructure measure that the senate is trying to pass before the August recess.
When asked about inflation and rising consumer prices during last week’s CNN town hall dumpster fire, Biden said the multi-trillion dollar spending bills “will reduce inflation, reduce inflation, reduce inflation.”
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