Talking Points

Joey's Angels Do the Propaganda

Almost exactly one year ago to the day, I wrote a piece entitled “Inflation Is Coming! Inflation Is Coming!”. In it, I stated how the powers that be would soon begin to claim that inflation had become an issue and that they just didn’t see it coming.

While I was right about the inflation part (which didn’t take a rocket scientist to predict), I was wrong about how creative the excuses for it would be. First, we had the likes of the intelligentsia’s favorite Keynesian economist, Paul Krugman, blaming it on the supply chain shock (click through the Tweet thread below to read more).

Paul Krugman @paulkrugman

Trying to clarify my own thoughts on inflation. I got inflation wrong; I didn't see the current surge coming. But why? I didn't think the fiscal stimulus early this year would boost demand as much as Summers et al predicted ... and, in fact, so far it hasn't 1/

While there’s likely some truth that inflation increased due to supply chain shock, pretending that printing trillions upon trillions of dollars played no role in it is laughable. Even my therapist - someone to whom I frequently rant about financial matters - said to me last year, “So, we just got this free money from the government. How are we getting screwed?” Here’s how:

Luke Rudkowski @Lukewearechange

What did you think was going to happen when the government started to give out “FREE” money!?

But before the new narratives around inflation were set in motion, we had MSM claiming that inflation is actually good for everyday Americans. MSNBC got trolled so hard for Tweeting out an article that made a similar point that it actually deleted the Tweet.

Then, inflation was “transitory”…until it wasn’t.

Bloomberg @business

It's time to retire the word transitory on describing inflation, says Fed Chair Jerome Powell during Senate testimony on the economy trib.al/9wZc0wo

Then, it was the big bad corporations (which is admittedly probably another small part of the problem.)

Elizabeth Warren @SenWarren

One clear explanation for higher inflation? Giant corporations are exploiting their market power to further raise prices. And corporate executives are bragging about their higher profits. We need to boost competition and break up these monopolies to bring down prices.

But now, Uncle Joey has resurrected America’s favorite enemy, the “Evil Empire” and has proclaimed this conflict between Russia and Ukraine to be the cause of inflation. But we don’t really see too much of Uncle Joey saying this directly to the public; he likes to send his angels out with their talking points.

Here’s Nance blaming inflation on Putin:

Hedgeye @Hedgeye

“It’s important to dispel some of those who say, well it's the government spending. No, it isn't. The government spending is doing the exact reverse, reducing the national debt. It is not inflationary." -Nancy Pelosi vomiting complete nonsense

“Yellen: War Is Exacerbating Inflation Issue”

Breaking911 @Breaking911

US Treasury Secretary Janet Yellen: “We’re likely to see another year in which 12-month inflation numbers remain very uncomfortably high.”

And then we have Thin Lizzy…

Elizabeth Warren @ewarren

Let’s talk about what’s hurting people’s pocketbooks. There’s the pandemic—so let’s get more vaccines & tests out. There’s price gouging—so let’s enforce antitrust laws. There’s child care & health care costs—so let’s lower those. Democrats have plans. Republicans point fingers.

Wait, she’s still stuck on last month’s “big bad corporations” talking point. C’mon, girl. Keep up!

Granted, inflation has been heightened by this conflict in Ukraine, yet the quote below often comes to mind when I hear the talking points above:

Source

Oddly enough, Solzhenitsyn was a Russian author who warned about the dangers of centralized power in his masterpiece, The Gulag Archipelago.

Here’s what I truly don’t get, though… I recently wrote a piece (I’m - like - a real writer now) about how Biden’s DoJ has been cracking down on proposed mergers and acquisitions, because it believes that stopping mergers and acquisitions from happening means fostering more competition between companies, which means lower prices for consumers. And so my question is: WHY NOT RUN WITH THIS NARRATIVE??!?!?!??! Why don’t we see MSM outlets reporting on this? This is real, sensible action that the administration is taking to fight inflation (at least to some small degree), and the MSM has been virtually silent about it.

My guess is that Biden likes using the conflict between Russia and Ukraine as a scapegoat. I would go as far as staying he has even done his part in instigating it. In a previous edition of the newsletter, I claimed that the fault in this conflict falls squarely on Putin’s shoulders, but as I’ve dug deeper, I’ve learned that the situation isn’t so simple. I’m still hesitant to weigh in on what I believe the root causes of this conflict to be, mostly because I am far from an expert on international relations, but I did find the interview below to be particularly enlightening…

Here’s a quote from it:

“You hear this all the time: Well how come Ukraine doesn’t have the right to join whatever military alliance they want? Every day; all day. And just think about that? Is that really true? Does anyone think for a minute that Canada and Mexico have the right to join into a military alliance with Russia and China? Or is that absolutely preposterous?” -Scott Horton

Horton goes on to discuss how the U.S. would take military action against Canada or Mexico instantaneously if they did such a thing, and he’s right. Yet, Biden has pushed to expand NATO right up to Russia’s border for decades. Any leader would push back simply in the name of self preservation. I recommend listening to the entire interview.

While I don’t think Biden wants WWIII, I also don’t think he has much of an issue with using this conflict as something to help rationalize both the inflation that’s already here, and the potentially higher inflation that’s yet to come.

And so the question remains… Is it better to hold dollars or commodities or equities or bitcoin if even greater inflation is on the way? My answer remains “I don’t know”.

Jared Dillian @dailydirtnap

Stocks down, bonds down, commodities down, dollar down. Interesting day.

There are far too many variables at play for anyone to really know. Plus, I’m not a financial advisor.

With that said, in the long run, it’s always better to store wealth in hard assets. However, the volatility that we will likely see in markets over the course of the next few months may simply be too much for many to stomach. So, whatever you choose to do with your money, please be careful. Think for yourself, and trust your gut.

Best,

Frank

Twitter: @frankcorva

Girolamo Carlo Casio @INArteCarloDoss

Let’s cut the bullshit for a second. This inflation shock was voluntarily engineered. Who is the single largest debtor in the world? US Government. What does an inflation shock do? Rubs the nominal creditor to benefit nominal debtor. Biggest inflation shock in 40 years. 1/4