Wednesday, March 22, 2023

"Deflation? Inflation? All I Want Is A Good Steak"

"Deflation? Inflation? All I Want Is A Good Steak"
by John Wilder

"Welcome to the next step down. But how is this going to go? First, there are signs that this will lead to more inflation than a Kardashian’s butt experiences in an entire season of whatever crap they’re doing on TV. Here are some signs pointed towards inflation:

* It’s inflation season. That comes right after blowing up Russian pipeline season, duck season, rabbit season, duck season, rabbit season, and train derailment season.
* $2 trillion (a number no doubt made up because it sounded good to whatever political appointee approves these things) of newly printed cash has been allocated to “stabilize” the banking system.

When Bernie Madoff stole his investors money, the Fed® didn’t backstop the investors, even though they couldn’t keep up with the compounding interest of Madoff’s lies. That was deflationary. But backstopping all bank customers, everywhere? That’s more inflationary than Stormy Daniels, umm, attributes. I heard a rumor that half of Oprah’s money was in Silicon Valley Bank®. She got very upset when she thought that Elon Musk would be the only remaining African-American billionaire.

The latest announcement from the Fed® on their plans to stop inflation sounded desperate. I imagine that Janet Yellin would offer to learn pole dancing if she thought it would lower inflation. I think that might work, since never in the history of mankind have so many dollar bills jumped back into pockets than when Janet walks on stage.

What about things that indicate that deflation might be around the corner? During the implosion of Silicon Valley Bank™, it sounds like all of their bondholders and shareholders got vaporized. So, at least $15 billion and probably closer to $30 billion in cash was vaporized faster than a hoagie at Oprah’s house.

The stock market is down. When the market goes down, the money doesn’t power a secret spaceship, it just disappears like my biological father did when my biological mother got pregnant.

When interest rates go up, housing prices go down. Why? People buy houses based on borrowed money, and higher interest rates don’t increase the amount of money that they pay at (spins wheel) the PEZ™ factory. Nope, it just makes the house payment more expensive, unless the price of the house goes down. This is deflationary, because right now housing value is vaporizing like crack at Hunter’s place on a Saturday night.

Here's another, weird, example. While I was writing this, The Mrs. walked by my secluded writing spot in the sitting room, and asked me, “Hey, want a steak?” I had a scotch already, so, that’s perfect! “What answer do you expect me to give you?” She cooked the steak. This was a perfectly marbled ribeye, an inch and a half thick. She seared the sides, and it let out a gentle “moo” as I cut into it.

What did that ribeye cost? $12 a pound. Why? Well, there’s been a drought in prime cattle country. Cattle gotta drink. The Mrs. and her brother own the better part of a buttload of land. The year before they got $6,000 for the hay. They fertilized. After Russia invaded the Ukraine, fertilizer prices spiked. They decided to just grow whatever grew and not spend the $3,000 to fertilize it. They made $6,000 for the hay, same as the year before even though they had half the hay this year.

For cattle farmers, growers, leaders, ranchers prices went up, but what they got for a cattle didn’t. Therefore? In March of 2023, I can get a pound of the best ribeye ever to grace a cast iron skillet for $12, whereas two Double Quarter Pounders With Cheese™ would cost me . . . $12. This is not a hard choice.

In 2024 or 2025, though, I expect that same beef to cost double or more. I’ve been nagging my brother in law to get some cattle. Why? I like steak way more than the crap they serve at McDonald’s®. So, in some places, there is deflation right now.

Houses: I read today that there are several projects in Vegas that just received stop orders because the financing fell through. If a project is a good idea at 1% interest and 2% inflation, it may not be a good idea while skydiving with a bag of loose change as your parachute. Plans that don’t have financing. In an inflationary environment, a plan that doesn’t have financing is as useful as a waterproof towel.

There’s also been a rush towards our border of illegals that are desperate to come to a horribly awful and racist country. Is this inflationary, or deflationary? Inflationary. Illegals do take jobs that are low on the pay scale, so that strawberries are 0.03% cheaper. Is that deflationary? No. It’s inflationary. Illegals do make things like strawberries, lettuce, and cocaine cheaper, but they do actually cost about $10,000, each, for every year that they’re here for things like welfare, schools, roads, etc. So a family of five? Costs everyone at least $50,000 per year. Where does the cash come from? That’s the genius! We print it!

So, inflation or deflation? Yes. Our currency is going to zero, probably sooner than many might anticipate. What will go up? In 2023, not cows. But in 2025? Yeah, nearly certainly.

Some things will come down – I can’t predict them all. But the Fed™ will never stop printing. Their choice is this:

* Increase rates and blow up banks, the stock market, and house prices.
* Keep rates the same and blow up the currency.

The currency is toast. So is Biden’s chance at re-election. This time next year? I expect that we’ll see all of the above in full motion. I predicted in 2018 that 2025 we’d see a big breakdown, and I’m not betting against that now. Biden will likely go down as the single worst resident of the White House in history. I only hope that this complete economic and societal breakdown will finally rid us of the scourge of Kardashians. At least then it will be worth it."

No comments:

Post a Comment