Current Inflation Index Reports and Fed Policy/Actions

Markola said:
It’s an old play book.
Click to expand...
...
Markola said:
It’s how governments pay for excess spending above revenues, with no hard votes required. An invisible tax.

“We wouldn’t do that,” said every government In history with its own currency. To wit, when our grandparents were kids, the British Pound Stirling bought a pound of silver.
Click to expand...
This is why I have 10+% of my net worth in precious metals. While 2026 has been turbulent to say the least, I am still sitting with an average cost on physical gold about $1840 and physical silver around $26.

As the saying goes "Nothing stops this train. Nothing."
(The train in this instance is the printing of money and inflation in fiat currencies.)
 
copyright1997reloaded said:
...

This is why I have 10+% of my net worth in precious metals. While 2026 has been turbulent to say the least, I am still sitting with an average cost on physical gold about $1840 and physical silver around $26.
Click to expand...
Where do you keep it? Is it insured?

Just curious.
 
Chuckanut said:
Perhaps it has something to do with two Trillion dollar deficits with nobody in charge giving a hoot about it.

When more dollars chase goods and services, the price goes up. Trillion dollar government deficits do very little to increase productivity and thus our supply of goods/services. They do increase demand. Price is a function of Supply and Demand. Econ 101.
Click to expand...
Econ 101 looks at the entire economy, not just the public sector. The net deficit in the US economy is between what we produce and what we consume, otherwise known as the balance of trade. This is financed by the public deficit, but could just as easily be financed by consumer or business debt. As long as we consume more than we produce there will be debt somewhere. Math and accounting make it so, it cannot be otherwise.

The only way to make the deficit go away is some combination of produce more / consume less. So far there is no evidence of any effort or willingness to do so. If anything, this discussion on inflation shows just the opposite. Even a little shift in prices is rejected.
 
Since 2008, government policies enacted --- not always talked about --- have been aimed at bringing forward/borrowing consumption from the future....paid for with funds borrowed from the future. Beginning with "cash for clunkers" and hopefully culminating with the extraordinary Trump-Biden $5 trillion literal money giveaways (the check is in your mailbox, no RMDs this year, etc) excused by COVID. While it was easier to isolate/observe in data at the time, these money enemas were funded by Treasury borrowing ---- national/Treasury debt grew by a similar $5 trillion over the period. No surprise.

My only point here is that whether it's buying votes with giveaways or simply overspending on almost everything, the beneficiaries of this largess and waste ARE US. Folks who argue that the growing government deficit "must be addressed" typically fail to understand the depth of the problem. In recent years, DIRECT government spending has accounted for approximately 32% of GDP. Of course, the waterfall effect of governjent and non-government jobs created, their income spent, and on down might easily exceed 50% of GDP. Simply eliminating ANNUAL DEFICITS would likely trigger a very deep and prolonged recession or depression.

Bottom line: we've built a DANGEROUS house of cards that has supported economic growth and our American standard of living. Necessary reform that reduces the American standard of living will likely prove impossible. Probably only a depression in our kids' or grandkids' futures will do the trick.

For another day: In recent post-GFC years, our annual budget deficit has often equaled taxes due but not collected. But we children don't like paying taxes, and a VERY popular policy is to reduce the human and technological resources of the IRS. Just like robbing the grandkids' piggy banks and filling them with IOUs, weakening our tax collecting authorities is KIDS' STUFF.
Regards, Dick
 
FWIW, since 2018 the IRS budget is up 61% (28% inflation-adjusted) and staffing is up 29.5%.

www.irs.gov

IRS budget and workforce | Internal Revenue Service

IRS budget & workforce section page.
www.irs.gov www.irs.gov

There were continual cuts in the IRS workforce from the mid-1990s through mid-2010s, but one would expect the massive shift from paper to electronic filing in the period to result in a lot fewer literal paper-pushers.
 
USGrant1962 said:
FWIW, since 2018 the IRS budget is up 61% (28% inflation-adjusted) and staffing is up 29.5%.

www.irs.gov

IRS budget and workforce | Internal Revenue Service

IRS budget & workforce section page.
www.irs.gov www.irs.gov

There were continual cuts in the IRS workforce from the mid-1990s through mid-2010s, but one would expect the massive shift from paper to electronic filing in the period to result in a lot fewer literal paper-pushers.
Click to expand...
The change to electronic filing has no impact on tax evasion. How the numbers are delivered is irrelevant --- discovering, chasing, indicting and convicting evaders is what most IRS employees should be tasked with.
Aside: I'm surprised at your IRS budget numbers. It appears voters are simply being lied to by presidential candidates.
Regards, Dick
 
dickoncapecod said:
The change to electronic filing has no impact on tax evasion. How the numbers are delivered is irrelevant --- discovering, chasing, indicting and convicting evaders is what most IRS employees should be tasked with.
Aside: I'm surprised at your IRS budget numbers. It appears voters are simply being lied to by presidential candidates.
Regards, Dick
Click to expand...
it appears the lion's share of the budget is spend on administration.
 
Montecfo said:
Where do you keep it? Is it insured?

Just curious.
Click to expand...
I should have stated "precious metals and PM mining stocks". Most of it is in "paper form" PM's, e.g. GLD, SLV, PPLT. A good amount of GDX, GDXJ, SIL (pm mining ETFS). On the (smaller $) physical front, multiple safety deposit boxes with differening co-owners. A trivial amount (not nearly enough if access to safety deposit boxes are frozen/taken) in other places.

Yes, I am aware of the tradeoffs of the above. I am (I guess) banking on the system not failing or wealth being confiscated. If my perception changed, my strategy would change (obviously with different risks). I am also banking (for the moment) of not dropping dead quickly and the safety deposit boxes having to go through probate or that the banks involved get robbed.
 
Big drop in June CPI due to drop in energy costs.

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent on a seasonally adjusted basis in June after rising 0.5 percent in May, the U.S. Bureau of Labor Statistics reported today. This decline in the all items index was the largest 1-month decrease since April 2020 when it fell 0.8 percent. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.

The index for energy fell 5.7 percent in June after rising 3.9 percent in May, 3.8 percent in April, and 10.9 percent in March. The energy index was the largest contributor to the monthly all items decrease, more than offsetting increases in other indexes including those for shelter and food. The index for food increased 0.2 percent over the month, as did the index for food at home and the index for food away from home.
Click to expand...

IMG_9853.jpeg

IMG_9852.jpeg


From https://www.bls.gov/news.release/pdf/cpi.pdf
 
Last edited:
If I read the numbers correctly, the CPI-W drop from May to June is the largest May to June drop this century so far. If it remains flat the next 3 months, the Social Security and CSRS cost of living allowance will be about 3%, or less if it continues to reduce.
 
I heard energy prices are expected to spike back up after the brief dip.
 
You must log in or register to reply here.

Similar threads

Onda
Current University of Michigan Consumer Sentiment Index and Fed Policy/Actions
2
Montecfo
M
S
Buy TIPS now or wait (No Inflation Data)
2 3
Fermion
F
schrodingerscat
BDCs May 2025
dickoncapecod
dickoncapecod
imoldernu
Contingency Planning
robnplunder
robnplunder
N
San Francisco Fed Paper: Recession Odds Top 50% Read more: http://www.foxbusiness.co
haha
haha

Latest posts

Back
Top Bottom