Business Confidence, Shattered

Bad times are here, my friends, and it is going to get much worse. [Gilder's Daily Prophecy] December 14, 2021 [UNSUBSCRIBE]( | [ARCHIVES]( URGENT: Your New Crypto Book Is Awaiting Shipment you’ve kicked yourself for not investing in cryptocurrency… Watching Bitcoin go from $61… To $1,000… To over $60,000… Then pay close attention. Famous crypto millionaire James Altucher just released a brand-new book on crypto… [And he’s releasing a limited number of books to folks who click here now](. We have a copy reserved in your name, and we just need to hear back from you. [Click here now to see how to claim your copy](. Business Confidence, Shattered [Jeffrey Tucker]Dear Daily Prophecy Reader, In retrospect, all economic events seem inevitable. The cause and effect become obvious. You can look back and easily see the policy disasters. It is always easy to predict backwards in time. But there are certain things you can know in advance. For example, if you shut down an economy by force, you will wreck investor confidence in the future. We’ll get to that in a moment. For now, let’s talk about today’s big news: wholesale prices. (It’s not news to you since I’ve been talking about this for 6 weeks.) A law of economics says: All else equal, with no change in velocity and productivity, more money pumped into the economy will lead to higher prices. Real world conditions can vary, but when monetary aggregates of every sort show hockey-stick-like patterns, you can be pretty sure the inflation is going to rock up at some point. We’ve known this for the better part of a hundred of years. And we’ve known for a year and a half that we would likely see inflation in this country without precedent in our lifetimes. No reader of this letter is shocked by the wholesale price index touching double digits. I’ve been reporting on component parts rising 40% to 200% over the last six months. These extreme cases get filtered out in the indexing process, making it all seem less severe. From the individual producer point of view, we are dealing with near-emergency situations. These price increases in components and materials can be absorbed for a few months but not over the long haul. They devour profitability like a fast-moving cancer. Combine that with labor shortages and you have major problems. Wages keep being bid up, faster and faster, but still not in a way that increases the purchasing power of the money workers receive. That’s because consumer prices are chasing the producer prices very closely behind. The trajectory here is striking. This is not a stable rate of high increase. It is an increasing rate of high increase. Forecast this out over six months, compounded, and you are looking at something truly horrific. Already these are the largest increases in wholesale prices on record. But keep in mind that this is getting worse. Worried yet? If not, let’s take another look. Consider the 106 year chart, which is built of very reliable data. Set the 1982 dollar at 0 and consider the year-to-year percentage change in the wholesale price index. Sit down. Be prepared to cover your eyes. [chart] This is the on-the-ground reality. Correction: the on-the-ground reality is worse because the data seen in this chart is all dated. In a fast-moving inflation like this one, it is not possible for the data collectors to stay up to date. That The Fed has been completely dopey about this is a complete scandal. They unleashed this hell and now they are saying that they will fix it. America’s top futurist: Don’t buy bitcoin – buy THIS instead of America’s best connected tech forecasters recently revealed the name and ticker symbol of one of his top stock ideas for the next decade. It’s part of an new, trillion-dollar opportunity that he believes is much more important – and potentially more lucrative than bitcoin (or any cryptocurrency). [Get the details here](. The Fed Fix It is about as likely that The Fed can fix inflation as it is that the CDC will fix a virus. Whatever they do will cause even more harm. So let’s ask the question: what can they actually do? Raise rates thus tanking the economy quickly into a depression, in times of inflation. Inflationary depression: it’s already here and worse than the 1970’s. They can stop their bond purchases, which throws all this grotesque debt to the private sector. The banks will likely bail if they begin to doubt the presence of The Fed as the last-resort buyer. This will do nothing to curb present inflationary pressure; that only addresses the problem in the future. I simply do not believe that there is any taste in D.C. now for doing what Reagan did in 1981: tolerate a downturn on the promise of a future upturn. Loss of Confidence As bad as all this news is, and as grim as the trends look, there are even worse things happening right now. Business investment has taken a downturn not only in the US, but in all OECD countries. The data mavens cannot figure out why. They look at the world opening post-pandemic and cannot fathom why companies large and small are unwilling to commit to capital investment over the long term. The blindness on this point speaks to the problem with digging through numbers alone to provide the answers. The real reason is, for lack of a better term, psychological. The belief in the stability of institutions has been shattered due to lockdown. Governments all over the world have for two years given a big “F Y”ou to the private sector. They have shut them down, masked their workers, jabbed them silly, and otherwise abused private property for their own ruling-class fantasies. After all of this, is there really any wonder why there is reluctance to invest? There is regime uncertainty out there today. No one knows what is next. Long-term capital investment requires a stable legal environment, not an arbitrary bio-fascist dictatorship. One is exclusive of the other. I suspect it could take 10 or 50 years to repair the economic damage of the last two years. That media prognosticators look at this trend with confusion speaks volumes. Another striking point that this makes: there has been a huge decoupling taking place between real business investment and the stock market. I am going to assume that stocks will perform well throughout this inflationary period. When I say, “perform well” I mean that they will keep track with inflation, not rise much in real terms. That says nothing about the long-term hopes for a restoration of prosperity. Bad times are here, my friends, and it is going to get much worse. Will we learn? It’s happening, but too slowly to find a reliable fix. The ruling class is unwilling even to admit what they have done much less fix it anytime soon. Regards, [Jeffrey Tucker] Jeffrey Tucker P.S. A Special Message from James Altucher Crypto for the Holidays - An Invitation from James My wife Robyn and I would like to invite you to virtually join us in our home this Wednesday at 2:00 ET. I normally don’t care much about the holidays. But I know for most people things are a little crazier than normal this time of year. That is true of the crypto markets right now, too... Which is why I am hosting a virtual crypto Q&A from my home. And as a loyal reader I want you to come. There’s a lot to cover including a new crypto opportunity I’ve identified that I’d like to introduce you to. It’s going to be great. And I’ll answer as many questions about cryptos as I can. So here’s what you should do. [Click this link to submit your question](. And then mark your calendar for Wednesday at 2PM ET. That’s when we’ll start LIVE from my home. And if we have time I’ll even take you on a quick virtual tour of my new home. Of course, Robyn will need to be there since I only know where my office is. I hope to see you there. -James Senior Tesla Battery Engineer QUITS… of Tesla’s senior battery engineers recently QUIT and started his own battery company… And [now he’s filed the patent paperwork for the KEY manufacturing process]( that could revolutionize the entire industry. [Click here for the details about this new tech – it’s all covered under patent application No. 3069168.]( [Three founders Publishing]( To end your Gilder's Daily Prophecy e-mail subscription and associated external offers sent from Gilder's Daily Prophecy, feel free to [click here](. If you are having trouble receiving your Gilder's Daily Prophecy subscription, you can ensure its arrival in your mailbox by [whitelisting Gilder's Daily Prophecy](. Gilder's Daily Prophecy is committed to protecting and respecting your privacy. Please read [our Privacy Statement.]( For any further comments or concerns please email us at GildersDailyProphecy@threefounderspublishing.com. 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