Iran's central bank chief resigns amid protests and currency turmoil

How Iran’s Economy is Quietly Collapsing due to high inflation, capital flight, low crude oil prices, more sanctions etc.

Recommendable! This video did not even mention the severe drought going on in Iran. Will the theocratic dictatorship collapse too and be replaced by democracy?

Has the Fed Fostered Fiscal Irresponsibility? Very likely, a purely rhetorical question!

Bad news, if confirmed! Clearly the Federal Reserve acted irresponsible accumulating so much federal debt since about the beginning of the millenium!

How much has the Fed contributed to price inflation in the US in recent years given its outlandish buying of government debt?

I selected these two instructive charts below, because they seem to illustrate what is wrong with federal government deficits and debt in the US. Unfortunately, the history goes only back to 1990, too short for my taste!

Indeed, it appears that the Federal Reserve has recklessly acquired/financed too much federal government debt with the beginning of the new millenium. Very bad, requires immediate correction by President Trump!

The analysis argues for a "fiscal policy that is not associated with automatic stabilizers (i.e., programs that automatically adjust tax or spending programs without changes in law or regulation to offset economic conditions)". This is certainly one of the accepted solutions presented in  textbooks of macroeconomics. Another technical term used in this analysis is "quantitative easing" in response to macroeconomic shocks by the central bank.

Caveat: I did not have the time to read this economic analysis.

Has the Fed Fostered Fiscal Irresponsibility? - EPIC for America "Evidence suggests that deficits are higher after economic shocks when the Federal Reserve buys government debt."

Unfortunately, the usefulness of this second chart is somewhat diminished, because it shows the percentage relative to public debt overall, but public debt holding increased dramatically as the first chart above shows. But make no mistake, a Fed holding of over 15% is way too much!

Thieves steal 100,000 eggs worth an estimated $40,000 in Pennsylvania

Is this a commercial or a crime or a scam to raise prices further? Why did the senile, demented and corrupt former 46th President cull millions of chickens because of bird flu? This mass culling was a very stupid overreaction!

Price inflation as measured by Costco Wholesale

 For many years, certain products at Costco Wholesale had a constant price:

1. The famous hot dog with soda costs now $1.5, it was $1 before
2. The 3 pound can of find ground Colombian coffee costs no about $13, it was $10 before
3. and so on

One exception: The 2 pound lean, thin cut cooked ham still costs about $10.

Ivory Coast Raises Cocoa Price By 50% As World Market Price Reaches Record High

Bad news! As a chocoholic I am not amused by these prospects!

Asia Combats Rice Inflation: Can India Come to The Rescue? with Palki Sharma

Recommendable! However, you have to subtract this nonsense about climate change!

Federal budget deficit reached whopping $1.7 trillion for fiscal year 2023

This is totally insane, unsustainable, irresponsible and reckless!

You wonder why there is high price and wage inflation in the U.S.! We urgently need again e.g. a balanced budget requirement etc.

"... The national debt is currently at a record $33.5 trillion [for comparison annual nominal GDP is about $24 trillion] , according to the latest U.S. Treasury data. ..."

Federal budget deficit reached whopping $1.7 trillion for fiscal year 2023: Watchdog | Just The News

Rice Price inflation

Bad news! Rice prices are seriously elevated!

"Prices of rice, a major staple for Asia, have soared over the past months due to floods, heat waves and other extreme weather conditions affecting the rice production, adding to the food inflation that has already hit households and businesses in the region. The world's top rice exporter, India's decision to ban exports of non-basmati white rice starting in July has also shocked the market." (Source)

FAO Rice Price Update | FAO | Food and Agriculture Organization of the United Nations

Image of the day

The sharp rise of U.S. government debt is unsustainable! It is dangerous and reckless! Money or taxpayer money does not grow on trees!

It is one of the main causes of the price and wage inflation combined with interest rate hikes we are experiencing! The governments of other countries also have lived beyond their means.

Source

Hyperinflation, inflation, and shrinkflation

Since the end of World War II, most major Western countries had hyperinflation pretty much under control.

Inflation still comes and goes. Often times due to bad government policies like the extremely low interest rate policies (cheap money reducing price sensitivity and chasing wasteful projects/investments etc.) since about early 2000s and the excessive government spending for many years that significantly contributed to the current inflation.

How was hyperinflation or a more severe inflation avoided this time? Think of e.g. shrinkflation or how businesses adopt to inflation!

Why Zimbabwe is Using Gold as a Currency with Palki Sharma

Recommendable!

Federal Reserve economists: Quantifying the Inflationary Impact of Fiscal Stimulus under Supply Constraints

The study confirms that behind most rampant price inflations in history is  excessive government spending! It is no different this time!

Massive trillion dollar deficit-financed fiscal transfers in the U.S. and other Western countries fueled price inflation! Plus, add to this the more than one decade of ultra low interest rates as a result of a colossal failure of monetary policy!

From the abstract:

"This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy to U.S. inflation over the December 2019-June 2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and that the fiscal stimulus contributed half or more of the total aggregate demand effect."

Quantifying the Inflationary Impact of Fiscal Stimulus under Supply Constraints by Julian di Giovanni, Sebnem Kalemli-Ozcan, Alvaro Silva, Muhammed Ali Yildirim :: SSRN

Credits: Breitbart Business Digest

High egg prices lead homeowners to start raising backyard chickens

Not a bad idea! Necessity is the mother of invention! 😊🐔

High egg prices lead homeowners to start raising backyard chickens - AZ Big Media High egg prices have led homeowners to start their own backyard chicken coops and hatcheries and caused stores to see an increase in their sales of chicken feed and baby chicks.

How OECD countries live beyond their means by running government budget deficits year after year

Most of the member countries of the OECD show lots of red ink  for most of the years since 2020.

Just take the U.S. as an example from 2008-2021, the government deficit was on average over -8% of GDP per year. This is totally unsustainable!!!

Balanced government budgets or government deficit reduction are largely ignored by our elected representatives! 

You wonder why there is now high price inflation in many countries! Don't just blame the Covid-19 pandemic or Russia's war of aggression against the Ukraine!

It is high time that our lifetime career politicians change their priorities as far as government spending is concerned! More frugality and more focus on priorities please!

Source: General government deficit Total, % of GDP, 2000 – 2021

Rolls-Royce car workers win record pay package worth up to 17.6%. Fuel for more price inflation!

Just an example, how the wage-price spiral is going up! If other companies and public sector follow, you can bet that price inflation will be with us well into 2023!

Rolls-Royce is surely not the only company raising wages significantly hoping they can pass on the cost increase to their customers!

"About 1,200 workers at the firm's plant in West Sussex will receive a 10% pay rise and one-off bonus of £2,000."

Rolls-Royce car workers win record pay package worth up to 17.6% - BBC News

Rolls-Royce Motor Cars: Inspiring Greatness and price inflation!

The U.S. Debt Limit: A Lever to Change Autopilot Spending by the U.S. Congress

Recommendable! How often and how hard have the elected representatives wrestled to starve the beast (the ever growing federal government and its expenditures)!

What happened to the justified demands for a balanced budget requirement? Like term limits for all members of the U.S. Congress, the elected representative have shirked their responsibility for many years towards We the people!  

Let's remember: Often price inflation is triggered and/or fueled by way too much government spending and rising indebtedness. This time is no different! Most economists know about this, but remain silent or even support more government spending and debt! What a wretched group of professionals! 😊

"... The Budget Control Act of 2011 increased the debt limit. It also required Congress to vote on a constitutional balanced budget amendment, which failed to pass. ..."

The Debt Limit: A Lever to Change Autopilot Spending | Cato at Liberty Blog

Hans-Werner Sinn: Inflation zerstört unseren Wohlstand - ausgelöst durch Staatsschulden

Die Sendung könnte empfehlenswert sein! Der bekannte Ökonom mit dem Ziegenbart packt aus!

Mir war Prof. Sinn in 2015 als etwas naiv etc. aufgefallen, siehe hier.

"„In der Inflation gewinnt der Staat – und der Sparer verliert“, sagt Professor Hans-Werner Sinn, Deutschlands wichtigster Ökonom. In den vergangenen Jahren haben sich die Euro-Staaten massiv verschuldet. Das führt nun zu einer massiven Inflation – eine Inflation, die durch Corona-Pandemie und Energiepreise nur noch weiter verstärkt wird. Denn nur ein Drittel der Inflation wird durch steigende Energiepreise verursacht.

Die Inflation liegt bei 11 Prozent. Doch sie wird noch weiter steigen, so Sinn. Die Lohn-Preis-Spirale kommt in die Gänge. Bei den Energiepreisen ist keine echte Entspannung in Sicht. Die Bundesregierung möchte die Bürger entlasten – doch die Gaspreisbremse wird die Preissteigerungen nur verstärken. ..."

Tichys Einblick Talk - Hans-Werner Sinn: Inflation zerstört unseren Wohlstand - ausgelöst durch Staatsschulden Deutschlands führender Ökonom Professor Hans-Werner Sinn nennt die „Sondervermögen“ der Bundesregierung eine unzulässige Umgehung der Schuldenbremse. Die Inflation werde damit nur weiter beschleunigt. Die Ursachen der Inflation liegen hauptsächlich in der massiven Staatsverschuldung.

The Fed balance sheet Is In the Red. Here's Why

Very recommendable! For at least 15 years or so Western central banks (incl. the Fed) inflated their balance sheets to buy e.g. government bonds and they maintained ultra low interest rates over that period. Both have been reckless and irresponsible!
Cheap combined with too much money often are a major cause of price inflation! Essentially all economists know that, but few have voiced their criticism!

Chemie-Beschäftigte erhalten 6,5 Prozent mehr Gehalt und 3000 Euro Inflationsgeld

Die gefährliche Lohn-Preis Spirale kommt anscheinend in Gang in der Bananenrepublik D.! Mal sehn wo das hinführt! Die berüchtigte Kluncker Runde der 1970er kommt in Erinnerung!

Runter mit den zu hohen Staatsausgaben, um die Preisinflation in den Griff zu bekommen!

Chemie-Beschäftigte erhalten 6,5 Prozent mehr Gehalt und Inflationsgeld