Say It: Double Digit!

Even MSNBC today is using the phrase “rampant inflation.” Yikes [Gilder's Daily Prophecy] January 28, 2022 [UNSUBSCRIBE]( | [ARCHIVES]( === [$512 Credit Offer Activated] === Hi there Reader, Congrats! A $512 credit is waiting to be applied to your account for this research. [Please click here]( learn how to claim it.]( It’s come to our attention that you might be missing out on extra benefits exclusively for Gilder's Daily Prophecy subscribers. Check out our website where you can find archives, updates, and everything else included in your subscription. You can access it by [clicking here now](. Say It: Double Digit! [Jeffrey Tucker]Dear Daily Prophecy Reader, The phrase double digits strikes terror in the heart of any central banker. Throughout the developed, democratic world the phrase seems to symbolize and codify failure. It’s the point at which people are fed up and blame the people in power. It’s the turning point, and it’s been this way for many decades. Double digit is foreshadowing of dramatic change. I’m like many econ-nerds in that I spent a lot of time digging through and playing with the data available on the website of the Federal Reserve of St. Louis. There are many ways that one can examine price trends, so many options to gain a sense of what is happening out there. It’s not just the CPI, PPI, or those pretty heat maps that have become fashionable, and so on. The Fed’s preferred method of assessing inflation is the implicit price deflator, which can be generated in a number of different ways. I’m grateful to my friend David Stockman for noticing something really telling. He has sleuthed out the Durable Goods implicit price deflator percent change from a year ago. This is about the prices that people pay for things that last and are not immediately consumed, such as washing machines, sports equipment, ovens and so on. He has discovered the highest rate of price increases in this sector since 1975. The rate clocks in at 9.6%. Yikes! [chart] Keep in mind that this data is always 30-days old at least. So what you are seeing right now on the street is probably already worse than this. If you want to look at tremendously grim data, you can head over and look at the conventional producer price index and observe year-over-year percentage changes that are hovering around 40%. To be sure, this reflects to some degree, a correction in the deflation that occurred during lockdowns. But that doesn’t account for the whole of it. Here’s what I find fascinating. So far, the media has been relatively quiet about all of this. Some organs are actually trying to pass off the latest data on wage gains as good news. Hey, hey, workers, you got a 4.5% raise! Yeah right. Some good that does you when the things you buy with your wages are 10% more expensive. That’s called a wage cut! My own theory is that the media is not making much of a deal out of this for three reasons: 1) they want to protect Biden, 2) they don’t want the Fed to act for fear that doing so would tip the economy into recession and collapse financial markets, and 3) people are mad enough at the establishment as it is! Even so, if you dig down deep enough in the business pages, you do find the first mentions of a growing problem. Even MSNBC today is using the phrase “rampant inflation.” Yikes again! Breaking: Ex-Pentagon Insider’s Disturbing Message for America He warned about the 2008 financial crisis a full two years in advance. He’s predicted everything from the coronavirus crash, the election of Donald Trump, Brexit, and more. And he just went live with a disturbing new warning for America. One that could have devastating consequences for anyone that’s still holding stocks, cryptocurrencies, or cash on [2/10](. If you have money in the markets, or you are worried about America’s financial future… You need to [heed his message]( now… because once this crisis hits it will already be too late. [Click here to learn more]( Down in the Dumps The truth is that inflation right now, while tremendously worrisome, is not among the top problems afflicting economic life. The good shortages at the stores are even more alarming. It’s one thing for there to be products on the shelves that are overpriced. It’s another thing entirely for them not to be there at all. Whenever I shop and run into a manager or owner I always ask about these issues. They tell harrowing stories of delays, of huge shipping costs, and a complete lack of confidence that they will be able to get this or that. They take what they can get and sell it as best as they can. A major problem afflicting all sectors of economic life today is what is called “worker discouragement.” We’ve seen very low progress in bringing back labor participation. There are still well more than 2 million people who have gone missing from the labor force. How to get them back? There are no easy answers. Conventional unemployment measures should be called lies at this point. If you calculate the unemployment rate in a way that includes those people who just have no interest in working, it approaches levels of 15%, and it is much higher in red states than blue ones. Perhaps 1 in 10 workers in this country have just dropped out completely. Measures of job satisfaction today are alarmingly low as well. No Recovery Yet All of this is stopping recovery, not to mention hope for the future. But wait just a minute! Didn’t the latest GDP data show that the economy is roaring along in ways that should make us all jump up and down? Yeah, right. There is a reason that no one really believes. Buried in the business pages of the New York Times we find a fascinating chart of pre and post-lockdown GDP numbers, which generally serve as a proxy for economic growth. The journalist provided a different look at GDP in real terms. What he finds is that the economy still hasn’t recovered from lockdowns. [chart] We are still not back where we were two years ago. But the truth is even worse. WE LOST TWO YEARS OF ECONOMIC GROWTH. My apologies for the large capital letters there but this frustrates me. Frederic Bastait told us two and a half centuries ago that the great cost of economic controls is not fully about what we see. It is about what we do not see. It’s the art that was not created, the goods that were not produced, the services we will never get because they do not exist. He calls this the difference between the visible and the invisible. The true costs of intervention is something that we can only imagine in the abstract. This is what devastates me most about our times. They shut down civilization like a light switch on the assumption that turning that switch back on would be easy peasy. It is still not on. But even worse, we drained the forces of progress of 22 months of what otherwise might have been progress. What’s more, there is still no official honesty about this ghastly occurrence. Even today, the Washington Post has attributed all the suffering to the “pandemic” and none of it to pandemic policies. I put that word pandemic in quotes not because I think it is a fake. I’m not of that school of thought. My point is that the virus came and did what the virus was going to do. Everything else that happened around it was the doing of bureaucrats and governments. They spent trillions. They smashed businesses. They crushed dreams. They printed vast amounts of money. And now they are plotting to fire as many of the noncompliant as they can get away with. The whole policy was sadistic. The price must be paid. And we are paying it now. We’ll still be paying it in ten years. The suffering is nowhere near over. This isn’t only about economics and finance. It’s about the quality of life and even the will to live. Regards, [Jeffrey Tucker] Jeffrey Tucker P.S. And now a note from our Publisher… Just want to make sure you saw this: [We want to add a credit of $512 to your account for this offer.]( And I wanted to make sure you took advantage of it. [Click here to learn more]( If you already claimed this credit, then please ignore this message. But if you haven’t… Then please act fast. We are giving you the chance to claim a $512 credit by this Monday. A little thank you from me to you. Don't miss out on this opportunity, click the link below for details. 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