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Monday, July 15, 2013

Economic Stories of Relevance in Today's World -- July 14, 2013

Inflation Is Too Low? Are You Kidding Us Bernanke? - The Economic Collapse Blog - Michael Snyder - July 11th, 2013 - Federal Reserve Chairman Ben Bernanke said this week that inflation in the United States needs to be higher.  Yes, he actually came right out and said that.  It almost seems as if Bernanke is trying to purposely hurt the middle class.  On Wednesday, Bernanke told the press that "both sides of our mandate are saying we need to be more accommodative".  Of course he was referring to the Fed's dual mandate to keep unemployment and inflation low, but Bernanke has a very unique interpretation of that mandate.  According to Bernanke, inflation in the U.S. is now "too low".  The official inflation rate is currently sitting at about 1 percent, and Bernanke insists that such a low rate of inflation is not good for the economy.  He would prefer that the rate of inflation be up around 2 percent, and he is hoping that more "monetary accommodation" will help push inflation up and the unemployment rate down.                       But what Bernanke will never admit is that the official inflation rate is a total sham.  The way that inflation is calculated has changed more than 20 times since 1978, and each time it has been changed the goal has been to make it appear to be lower than it actually is.                           If the rate of inflation was still calculated the way that it was back in 1980, it would be about 8 percent right now and everyone would be screaming about the fact that inflation is way too high.....                          Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row, and according to USA Today water bills have actually tripled over the past 12 years in some areas of the country.....                           
And over time, those increases really add up.  An article by Benny Johnson details how the prices of many of the things that we buy on a regular basis absolutely soared between 2002 and 2012.  Just check out these price increases...                Eggs: 73%                   Coffee: 90%                Peanut Butter: 40%                      Milk: 26%                   A Loaf Of White Bread: 39%                          Spaghetti And Macaroni: 44%                         Orange Juice: 46%                      Red Delicious Apples: 43%                          Beer: 25%                          Wine: 60%                     Electricity: 42%                  Margarine: 143%                      Tomatoes: 22%                      Turkey: 56%                        Ground Beef: 61%                          Chocolate Chip Cookies: 39%
(Comment from K on this article -       I assure you they are trying to hurt the middle class, and the poor as well. Step 1.Spy on everyone, until you know enough to be able to control many. 2. When gun controls does not work, control the flow of ammo, until most people give up even trying to find any.3.Make out of work people so reliant on the Government, they will not dare to raise a finger in protest. 4 Work the remaining workers to death. Squeeze them so hard they need 2 or 3 jobs to make ends meet. A totally exhausted citizen, is a compliant citizen. It is all about control, and the noose is getting tighter every day.)        

On The Economy: Inflation Accelerates; Fed Rumors Rise - - Mark Memmott - July 12, 2013 - Reuters the overall increase in wholesale prices was "more than expected" and may be a sign that the economy is picking up speed — which in turn could mean that the Federal Reserve will soon feel it can stop trying to give the economy a boost.                     — The Fed. that "former U.S. Treasury Secretary Lawrence Summers is indicating to President Barack Obama's Wall Street supporters that he wants to become Federal Reserve chairman, according to people familiar with the matter, as he keeps in touch with senators who would vote on the nomination."                 Summers was Treasury secretary in the later years of the Clinton administration, and was a top economic adviser to President Obama during his first term in office.                       Bernanke's second term as chairman expires Jan. 31, 2014. It's and that President Obama will be looking for a new person to lead the central bank.

A Temp Service Is America’s 2nd-Biggest Employer
- Conservative Musings - Ben Bullard - July 9, 2013 - It’s a great time to be a temporary or part-time employee in America. But it’s a terrible time to have a full-time job or a job that tasks you with making anything — except, maybe, burgers and tacos.                        That’s one takeaway from last week’s June jobs report from the U.S. Bureau of Labor Statistics, which revealed that Kelly Services, an international temporary staffing agency based in Michigan, is the Nation’s second-largest employer behind a company well known for its heavy dependence on part-time employees: Wal-Mart.                   Between temp firms like Kelly and volume retail/service companies like Wal-Mart, McDonald’s, Kroger and Target, about 85 percent of the jobs held by Americans are either temporary assignments or low-wage, part-time positions. The Administration of President Barack Obama hailed the jobs report as a signifier of successful White House economic policy, ignoring the fact that the net gain in jobs for the month of June represented a massive shift in the American labor force from full-time jobs (which fell dramatically) to part-time work.                   Writing for The Washington Examiner, Ashe Schow notes the June report isn’t a mere workforce aberration brought on by a glut of teenagers looking for summer work:
Temp jobs made up about 10 percent of the jobs lost during the Great Recession, but now make up a tenth of the jobs in the United States. In fact, nearly one-fifth of all jobs gained since the recession ended have been temporary.
It’s a sad state of affairs for our country. While part-time and temp jobs reached highs last month, full-time jobs decreased by another 240,000. The recovery, or lack thereof, is being fueled by a shift from full-time to part-time work.
Further buttressing the mounting evidence that the Obama-led “recovery” has only accelerated a gradual U.S. trend away from actually making tangible goods (i.e., heavy manufacturing) and toward an service-oriented marketplace where the value of everything’s ephemeral, The New York Times created an infographic last year showing that service industries make up nine of the top 10 biggest American employers in the 21st century, compared with the 1960s, when seven of the top 10 were manufacturers like GM, Ford, U.S. Steel and General Electric.                  Is it any coincidence that one-third of Americans — a number greater than the entire private sector workforce population in the United States — is now on food stamps?

Why underemployment may be worse than it looks - USA Today - Jeff Cox, - July 14, 2013 - The level of underemployed workers looks bad on its face but even worse when it's not the government doing the counting.                      When the Labor Department released its monthly non-farm jobs report Friday, it was all sunshine and roses except for one glaring weakness: A big jump in the unemployment rate that includes those who have quit working as well as those who have had to take part-time jobs even though they'd rather work full time.                     That rate, which economists call the U-6, jumped from 13.8% in May to 14.3% in June—a 3.6% increase and indicative that the 195,000 new jobs created in the month weren't exactly of the highest caliber.
But what often doesn't get as much attention is the monthly labor count that the experts at Gallup conduct.                          According to the pollster's results, the underemployment situation is even worse.                        Gallup reports that 17.2% of the workforce is underemployed, a startling number compounded by its divergence from the government's count. While the rate is down from the 20.3% peak in March 2010, it has remained maddeningly high over the past three years even as economists tout the strength of the U.S. economic recovery.                   From a broader perspective, the Gallup measure actually has increased from its 15.9% multi-year low in October 2012....

U.S. June budget surplus $117 billion: Treasury - MarketWatch - Robert Schroeder - July 11, 2011 - The U.S. federal government ran a budget surplus of $117 billion in June, the Treasury Department reported Thursday, as receipts rose and spending fell compared to the same month a year ago. For the fiscal year to date, the deficit is $510 billion, 44% less than the shortfall recorded in the same period last year, thanks mostly to increased revenue . The government's receipts totaled $287 billion in June, and spending was $170 billion. In June last year, the government posted a deficit of $60 billion. The government's fiscal year runs from October to September.

Drivers, get ready for a gas price spike - CNN Money - Aaron Smith - July 11, 2013 - Prices of oil and gasoline futures have increased sharply in July, according to chief oil analyst Tom Kloza. And these prices will inevitably be passed on to consumers in the coming weeks.                    The price of unleaded gasoline could jump by at least 25 cents per gallon in August, said oil trader Dan Dicker, author of "Oil's Endless Bid."                      In the last two weeks, gas futures jumped to $3.01 per gallon, an increase of more than 10%. And oil prices have surged more than 10% over the last month.

Kroger to buy Harris Teeter for about $2.44B - expand store base while reducing costs - Associated Press through Yahoo - Bree Fowler - July 9, 2013 - Kroger, the country's largest traditional supermarket operator, said Tuesday that it has agreed to buy Harris Teeter Supermarkets Inc. for about $2.44 billion in cash, boosting its presence in key southeastern and mid-Atlantic markets.                       Under the terms of the agreement, Cincinnati-based Kroger will pay $49.38 for each of the supermarket chain's shares. The price represents a 2 percent increase over the company's Monday closing stock price.                     "This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.                       The deal has been approved by both companies' boards, but remains subject to Harris Teeter shareholder approval. Harris Teeter announced in February that it was exploring strategic alternatives, including a possible sale.
Harris Teeter operates 212 stores in eight southeastern and mid-Atlantic states and Washington D.C., along with a pair of distribution centers and a dairy facility in North Carolina. Its fiscal 2012 revenue totaled about $4.5 billion.                  In comparison, Kroger operates 2,419 stores in 31 states. In addition to its flagship brand of supermarkets, it also owns Ralphs, Fry's, Food 4 Less and other brands. The acquisition adds another three states to its store footprint.

Karl Denninger ~ Setting Up for a Financial Collapse Worse than 1929

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