Our item yesterday pronouncing that inflation seems to be taming sparked a lively and even heated response from some of our readers. There seems to be no consensus. Arthur Laffer - our CTUP cofounder and a monetary expert - believes the inflation threat is still very real. He points to the enormous and nearly unprecedented $6.5 trillion rise in the quantity of money (M1) during the pandemic - money that still not been drained from the economy. The trillions of dollars of excess liquidity are still sloshing around out there.
That chart from Laffer Associates is shown below.
But then our friend Scott Grannis - also a long-time financial expert - sends to us this chart on the RATE OF CHANGE in the supply of money. The monetary base is still sky-high, but it isn’t growing anymore.
Our view isn’t that the inflation bogeyman has gone away, only that the inflation RATE is slowing and will continue to do so in the months ahead. But Laffer is of course right that the Fed has created many trillions of dollars of money over the past 30 months and there is still a LONG way to go to get back to the Fed’s target CPI rate of 2%.
Not since Harry Truman has a president leased fewer acres of federal land or offshore rights to develop oil and gas resources. And under Truman, offshore drilling was just taking its first baby steps.
The Biden administration is purposefully strangling U.S. energy development at a time when the world faces an energy crisis and punishing prices for consumers.
Has there been any administration so derelict in its duties, so dismissive of American foreign policy/security objectives and so eager to deliver political leverage to our adversaries? No, we couldn't think of any other.
Remember this chart and send it to your liberal friends the next time you hear Biden say “I’m doing everything I can to bring down gas prices.”
Where is the last place you would expect mask mandates to end in America? If you guessed Washington, D.C., ding, ding, ding, you got the right answer.
The DC mayor's state of emergency and pubic transit mask mandate didn’t end until late April. Now nearly five months later, DC has finally ended its mask mandate in taxis and ubers.
Governor Gavin Newsom must have been envious at Joe Biden’s audacity in call his spending blowout bill The Inflation Reducation Act (sic). So Newsom has now gone one better in signing something called the Fast Food Recovery Act (sic), even though economists predict its mandated wage increases will raise consumer costs by up to 20% while driving marginal workers out of the labor market.
The new law creates a 10-member council appointed by the Governor and Democratic legislative leaders with the power to micromanage wages, benefits and working conditions at most fast-food restaurants. The council - none of whom are elected - would be able to raise the state’s minimum wage to as high as $22 an hour next year without any legislative action - a clear evasion of accountability.
The International Franchise Association call the bill “a fork in the eye to franchise owners and customers at a time when it hurts the most.” It would impose joint and several liability on franchisors such as McDonalds for alleged violations by individual franchise owners. Many are likely not to want to bear such liability, and are likely not to open new stores or even close some. Jobs will be lost. Low income families will pay higher prices. This isn’t “progressive” it is regressive.
5) …But Even California Now Admits it Needs Nuclear Power
California Governor Gavin Newsom will soon sign into law a slew of new climate change bills that will further damage the state’s electric grid and raise costs.
But Newsom did decide not to close down the state’s last remaining nuclear power plant, Diablo Canyon. The plant was given a five year extension.
It speaks volumes of how lunatic the enviro groups are that the National Resources Defense Council and others who lobbied to close the plant even though it provides about 10% of the state’s electricity – and it emits no greenhouse gases. These green groups aren’t for a cleaner environment. They are for deindustrialization. They are against prosperity.
Despite Diablo’s stay-of-execution, California will still struggle mightily to keep the lights on. Newsom wants a ban on fracking, has announced a ban on the sale of gas-powered cars by 2035 and has joined Oregon and Washington in opposing new gas pipelines.
