Thursday, July 15, 2021

Fed's 'Transitory Inflation' could lead to a permanent increase for Social Security recipients

On July 14, Fed President Jay Powell doggedly pushed to members of the House of Representatives that his long-standing narrative that the inflation the US economy is experiencing was simply transitory (temporary) and NOT the fault of the central bank's monetary policies.  And ironically, very few in Congress believed him.

However this disbelief by elected officials will not stop the Fed from continuing their destructive programs of bond buying, yield curve manipulation, and near zero interest rates.  In fact the reality now is that the nation's monetary and financial systems are beyond the points of no return, and will continue to rush eagerly into that 'good night'.

For many Americans what is transpiring before them is not new, and may be a reminder of what happened 35 years ago when Stagflation raged throughout the economy.  Only back then the central bank had not gone Full Retard as it is doing today, and was able to stop the carnage with approximately 18 months of monetary pain and medicine.

Volcker took charge of the Fed in August 1979, when the U.S. economy was in the grip of runaway inflation. Consumer prices skyrocketed 13% in 1979 and then by the same pace again in 1980.

Working relentlessly to bring prices under control, Volcker raised the Fed’s benchmark interest rate from 11% to a record 20% by late 1980 to try to slow the economy’s growth and thereby shrink inflation. - Associated Press

Fast forward to today and that same said Stagflation is back with a vengeance.  But more importantly, the real rate of inflation as measured back during the time of Paul Volker is already above 13%... however the Fed Funds rate isn't at 11% like it was when the Fed Chief took it on 30 years ago, but instead it sits at a quarter point above zero.

Yet in all the negative consequences that rising inflation brings to consumer prices there is one interesting benefit awaiting a large portion of the populace beginning next year, and that is a potential record increase to their Social Security benefits as the Cost of Living Allowance is set to increase by the most in 30 years.

The Social Security cost-of-living adjustment for 2022 could be 6.1% due to inflation, according to a new estimate.

That would be the biggest increase since 1983, according to non-partisan advocacy group The Senior Citizens League, which calculated the figure. It’s also a bump up from last month’s estimate, when the increase for next year was expected to be 5.3%.

The new estimate comes as the Consumer Price Index in June increased 5.4% from a year earlier, the largest gain since August 2008. Higher food and energy prices were among the culprits that helped push the inflation measure higher. - CNBC

Alas, there are always consequences that occur when man in his arrogance seeks to mess with what nature manifests through balance.  And that Invisible Hand of the market will always in the end force fiscal and monetary policies to either bend to its will, or shatter themselves on the rocks with all the other failed economies in history.


Hi Kenneth! Thank you for your writings.

I was researching Trust vs. Faith, and came across this article. I am looking for documentation for an article. Did you write this, or was it sourced?

Also, my wife is from Missoula, Montana. Do you live in that area?


Morning Steve -

First, I do not reside in Missoula but I did go to high school there (Sentinel) from 1982 - 1986. My step-Father retired from the military and moved us up there where after graduation I left for college elsewhere and have only gone back for occasional visits.

As for Trust vs. Faith... I began my research on this by the fact that in the O.T. (Hebrew) the word faith only shows up 2 times, while trust shows up over 100 times. Then when the N.T. comes not only did the languages change when it was translated over 1700 years, but meanings of words also changed.

The original Greek word Pistis (Which was named for the mythological goddess in Greek lore), meant Trust, Reliance, and Good Faith (as in a business contract). However when the Roman Vulgate took it over, and exchanged the word Pistis for Fides, over the next 1000 years Fides CHANGED from trust and reliance to instead faith. (as in Sempre Fidelis - Always Faithful).

Most Christians will ignore this and simply blame 'semantics' but the Key difference between Trust and Faith is the requirement of evidence. ie... we have 'faith' that Jesus Christ existed and died/rose from the dead, but we today have never SEEN it with our own eyes. Trust meanwhile requires evidence to this in a tangible form we can see, feel, touch etc... This can be summed up in Heb 11:6 by replacing the word Trust for Faith. He REWARDS those who Trust (Rewards being the evidence for our trust).

As for the definitions etc... some I did my own research and some I found from others and it should be documented, especially where applicable in the books I have written regarding it.

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