What’s Greedflation?

Biden’s Bums are trying to shift the blame for high costs from the government to business. [The Rude Awakening] February 16, 2024 [WEBSITE]( | [UNSUBSCRIBE]( What’s Greedflation? [The Handshake] A politician taking home some goodies after the air show. [Sean Ring] SEAN RING In times of economic hardship, anxieties rise, and convenient scapegoats become tempting. Enter "greedflation," a recent buzzword gaining traction in public discourse. But before we join the chorus of outrage, let's pause and ask: Is greedflation real, or just another economic ghost story? Defining the Terms Before proceeding, I want to ensure we're starting from the same place. So let’s revisit each of the “-flation” terms. - Inflation: A sustained increase in the general price level of goods and services, leading to a decrease in the purchasing power of a currency. - Disinflation: A slowing down of the rate of inflation. - Deflation is a sustained decrease in the general price level, which increases a currency's purchasing power. - Agflation is a more significant increase in the price of food and crops compared to the general price rise in the non-agricultural sector. - Stagflation: A combination of high inflation and unemployment, usually seen in periods of economic shock. So what’s this “greedflation” nonsense? Greedflation suggests that businesses, motivated by insatiable greed, exploit inflationary circumstances to raise prices beyond costs, boosting profits at the expense of consumers. While the sentiment might resonate, particularly during periods of high inflation, the narrative lacks evidence and economic rigor. Why Greedflation Doesn't Hold Water Here are three reasons why “greedflation” really isn’t a thing. 1. Competition and Market Forces Imagine a grocery store excessively raising milk prices during an inflation spike. Customers would likely switch to competing stores offering lower prices, forcing the first store to re-evaluate its pricing strategy. Competition within and across industries is a constant pressure valve, pushing businesses to offer competitive prices while maintaining profitability. While isolated instances of price gouging might exist, sustained "greedflation" across an entire market is unlikely due to competitive dynamics. 2. Profit Margins vs. Inflation Consider the recent semiconductor shortage impacting various industries. While chipmakers saw initial profit surges due to limited supply and high demand, their margins have yet to skyrocket in the long run. Increased input costs (e.g., raw materials, equipment) and investments in expanding production capacity have eaten into those initial gains. Similarly, major oil companies might see temporary profit boosts during energy price spikes, but long-term margins are affected by volatile markets, exploration costs, and geopolitical factors. 3. Supply and Demand The recent surge in used car prices exemplifies the complex interplay of demand and supply. Pandemic-induced supply chain disruptions limited new car production, while consumer demand pushed prices up for used vehicles. Blaming this solely on dealerships ignores the wider context of limited supply and strong demand. Attributing inflation solely to corporate greed paints an incomplete picture, neglecting the broader economic forces. [WARNING: Do NOT “Buy the Dip”]( Jim Rickards warned the public that equities were dangerously overpriced in 2023... Well, it’s been just about a week into the new year… And it’s already looking like 2024 could be a bloodbath. Stocks are down… indexes are down… and even large caps have declined by as much as 15%. Some folks probably think it may be a good time to “buy the dip”… But according to Jim, that may be a HUGE mistake. [Click Here To Learn Why]( [Click Here To Learn More]( Alternative Explanations for Greedflation Monetary Policy The recent era of quantitative easing, in which central banks injected large amounts of money into the economy to stimulate growth, is often cited as a significant contributor to inflation. In fact, that’s what monetary inflation is. When that inflation seeps into the real economy, we get asset and consumer price inflation. During the 2009-2021 bull market, asset prices rose far earlier and faster than consumer prices. In 2022, consumer prices finally caught up, causing the highest inflation rate in 40 years. Supply Chain Disruptions The government-mandated private sector shutdown during the COVID-19 pandemic exposed the vulnerabilities of globalized supply chains. Shortages of key materials, transportation bottlenecks, and geopolitical tensions caused - and are still causing - disruptions and pushing prices up across various sectors. Addressing these challenges is crucial for mitigating inflationary pressures. Recently, the Houthi shutdown of the Bab al-Mandeb Strait, effectively closing the Suez Canal to any Israeli-allied vessels, created the same effect. Energy Prices Energy costs are fundamental inputs for goods and services. Fluctuations in oil and gas prices have ripple effects on inflation, as seen in the recent surge due to the Russia-Ukraine conflict. Diversifying energy sources and promoting renewable energy adoption helps mitigate the impact of volatile energy markets. We saw this affect Europe much more than the United States. Fiscal Policy Government spending and taxation policies significantly impact aggregate demand, fueling inflation if not managed carefully. Striking a balance between supporting economic growth and maintaining fiscal responsibility is key. My friend and colleague Ray Blanco reminded me that Joe Biden sent out a third and biggest round of fiscal stimulus when the economy was already recovering. It was an act of lunacy. And Biden still hasn’t stopped spending, with the 2024 deficit looking to top $2 trillion. Moving Beyond The Greedflation Narrative Understanding the valid drivers of inflation is crucial for crafting effective solutions. Here are some potential policy directions beyond the simpleton’s narrative of greedflation. Targeted Monetary Policy Instead of blunt interest rate hikes, central banks could explore quantitative tightening measures that target specific sectors contributing to inflationary pressures. This could help control prices without stifling overall economic growth. Investing in Infrastructure Addressing America’s third-world infrastructure and inefficiencies in transportation, logistics, and energy infrastructure improves supply chain efficiency and reduces costs, ultimately contributing to price stability. Promoting Competition Antitrust policies that foster competition within and across industries incentivize businesses to offer lower prices and innovate, benefiting consumers by driving down prices. Wrap Up While economic anxieties are understandable, scapegoating businesses with unsubstantiated claims of "greedflation" doesn't serve the country well. People don’t want to believe their government or central bank is actively hurting them. But they are. It’s much easier and lazier to believe businesses are ripping them off. Sure, businesses raise prices as their input costs rise. But they can only pass on the costs to a certain point. After that point, people stop buying, and eventually, that company goes out of business. But the government has no worries. You can’t escape them unless you pick up your entire life and move it. Most don’t. As Rothbard once said, “The State is a gang of thieves, writ large.” Place the blame where it belongs. Then, make your next move. Have a lovely weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Out of Order at Biden’s Border [Sean Ring] SEAN RING If you thought Biden Bucks were bad, try Biden’s Border. You don’t need tanks to overcome it, nor planes to fly over it. Not even a fake horse full of Greeks is required. Hell, you don’t even have to say, “Open Sesame!” Thanks to the cartels, there are thousands of miles of tunnels underground that illegal aliens can just walk through. And no, I’m not referring to Mexicans, who aren’t even the most prominent group invading the United States. No, this was planned long ago, with a certain former vice president, the then-director of Citizenship and Immigration Services (USCIS), and the deputy homeland security secretary. Of course, they’ve both been promoted since this little video was taken in 2015. [Biden] Credit: [InqvisitorMagnvs]( via YouTube Here’s the transcript: Not only our Muslim communities but African communities, Asian communities, Hispanic communities. And the wave still continues. It's not going to stop nor should we want it to stop. As a matter of fact, it's one of the things I think we can be most proud of. There's a second thing in that black box. An unrelenting stream of immigration. Non-stop. Non-stop. Folks like me who are Caucasian of European descent for the first time in 2017 will be an absolute minority in the United States of America. Absolute minority. Fewer than 50 percent of the people in America from then on will be White European stock. That's not a bad thing. That's a source of our strength. Three months ago, I wrote a piece titled “[The Terrorist Attacks of 2025]( In it, I postulated that we’ve got massive problems with Biden’s Border. Still, terrorist attacks resulting from it won’t happen until 2025, you know, when the Once and Future President returns to the Oval Office. I’ve never felt stronger about that assertion than I do today. [James Altucher: THIS is my top AI investment pick]( I’ve been called a “genius investor” by my fans… And an “eccentric millionaire” by some others. I think it’s because I make big predictions that [tend to come true.]( Today, I’m making my boldest prediction ever. Revealing the AI stocks I believe… Could turn as little as $10,000… Into $1 MILLION over the next few years. To show you I’m serious about helping you get in on this opportunity, I’m giving away one of my top 5 AI 2.0 stock picks – free. [See my top 5 pick here now.]( [Click Here To Learn More]( The Axios Exclusive Alex Thompson and Stef W. Kight over at Axios published an exclusive titled “[How Biden botched the border]( I don’t agree with much of it. For instance, they stuck in this nugget: Reality check: Much of the current crisis is rooted in factors Biden's team has had little control over — including unprecedented global calamities that have pushed millions of migrants to the U.S., decades of congressional inaction, and the state of key agencies after the Trump administration. That’s complete bullshit. Biden could have done this if he intended to - or thought it’d hurt his re-election chances earlier. But let’s get to the meat. The President blew up at his team on Air Force One when they couldn’t recite obscure immigration data immediately. Journalist Bill Melugin has summarized the best parts via [Zero Hedge]( - Susan Rice called Health and Human Services Secretary Xavier Becerra a “bitch ass” and “idiot.” - VP Harris’s team made it clear her responsibilities “began and ended” with root causes in just the three Northern Triangle countries and Mexico. A former Biden administration official said Harris has been “at best, ineffective.” - Mayorkas disagreed with Biden’s 100-day halt on deportations. - Homeland Security adviser Liz Sherwood-Randall displayed inexperience. She asked for a memo explaining the difference between refugees and asylum seekers. - Biden admin has listened to “vocal immigration advocates outside the administration.” - “The White House generally didn't want to talk publicly about immigration or the border for much of Biden's first three years, feeling it would draw attention to a political vulnerability.” - “Publicly, the White House also initially downplayed jumps in illegal border crossings as normal "ebbs and flows" — even as some internally pushed to acknowledge that the problem was significant.” Extended Version As pork is “the other white meat,” Susan Rice is “the other black woman” who could’ve been Veep. But Biden chose Kamala, and Rice has been salty ever since. Kamala Harris and her team were only concerned about her narrow assignment of monitoring the Northern Triangle countries. There are three Central American nations: Guatemala, Honduras, and El Salvador. These countries are often referred to collectively due to their geographical proximity, shared historical and cultural background, and similar challenges, such as poverty, gang violence, and political instability. These factors are also linked to significant migration flows from the Northern Triangle towards the United States, making the region a major point of focus in US immigration policy. In short, these countries are staging points for illegal immigrants journeying through Mexico to the United States. Homeland Security adviser Liz Sherwood-Randall should know that an asylum seeker is seeking status, while a refugee has been granted status. Asylum seekers are in a waiting period, while refugees have gone through the official recognition process. Not all asylum seekers will be granted refugee status. Their claim needs to meet specific criteria. Of course, the Biden White House knew the border was a much larger problem than they let on, and they are now scrambling to fix it. They won’t, partly because of incompetence and partly because they don’t want to stop all those new Democrat voters from entering the country. But a huge problem has emerged. The Mayorkas Impeachment On February 13, 2024, the House of Representatives impeached Alejandro Mayorkas, the United States Secretary of Homeland Security, on two charges: abuse of power and obstruction of Congress. The charges related to Mayorkas's handling of the ongoing border crisis at the U.S.-Mexico border. The impeachment vote was mainly along party lines, with all but three Republicans voting in favor of impeachment and all Democrats voting against it. After weeks of debate and hearings in the House of Representatives, the House held the vote, in which Mayorkas defended his record and denied any wrongdoing. The articles of impeachment against Mayorkas allege that he abused his power by "willfully and systematically" failing to enforce federal immigration laws at the border. They also allege that he obstructed Congress by refusing to comply with subpoenas and making false statements to Congress about the border situation. Mayorkas has denied all of the charges against him, calling the impeachment a "partisan attack" and a "sham." He has argued that he follows the Biden administration's law and policies. The Senate now has the power to decide whether to hold a trial on Mayorkas's impeachment and, if so, whether to convict him and remove him from office. The trial is expected to begin in March 2024. The impeachment of Mayorkas is a highly partisan affair, with Republicans mainly in favor of it and Democrats largely opposed to it. The impeachment is likely to divide the country along political lines further. The impeachment of Mayorkas is also likely to impact the upcoming presidential election. Immigration is a major concern for many voters, and the impeachment could help energize voters on both sides of the issue. Wrap Up Whether it’s New York City Mayor Eric Adams whining about migrants or Illinois Governor J.B. Pritzker, even the left realizes what a colossal screw-up this problem is. America can’t afford these migrants, and the “sanctuary cities” are bailing out. We’ll be left with 10,000,000 potentially angry and unwelcome people inside our borders. Even if only 0.5% are pissed off, that’s 50,000 potential felons you’re dealing with. But don’t worry, like good Democrats, the attacks won’t start until 2025. In the meantime, the market rebounded yesterday, and all’s well. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting Rude Awakening.](