(Bloomberg) -- Underlying US inflation probably rose in January by the most in a year, as tracked by the Federal Reserve’s preferred metric, highlighting the long and bumpy path to taming price pressures.
Headline Consumer Price Inflation printed hotter than expected in December, +0.3% MoM vs +0.2% exp and +0.1% prior, pushing the YoY headline CPI up to +3.4% (from +3.1% prior and hotter than the +3.2% exp)...
I've never moved for tax reasons, but I have refused to consider some destinations (and turned down jobs) because I didn't want to pay ruinous local rates or live under the intrusive laws that seem to go hand-in-hand with grabby tax regimes. Unsurprisingly, I'm not the only one who takes the sticky fingers of government into consideration when deciding where to live and work; crunching data from government and private sources, the Tax Foundation says that taxes play a significant role in where people choose to live.
Following two months of hotter than expected prints (driven by surging energy prices and healthcare methodology changes), the October CPI print was expected to slow materially from the previous month (from 3.7% to 3.3% on headline) even if core was expected to remain unchanged at 4.1%. What we got, however, was a whopper, with CPI missing across the board with both headline and core prints coming in below expectations on both a sequential and annual basis.
Billionaire Ken Griffin, head of the Miami-based hedge-fund manager Citadel, said higher baseline inflation may go on for decades, caused by structural changes that are pushing the world toward de-globalization.
The threat of hyperinflation has haunted fiat money economies throughout history. Although past empires crumbled under the weight of unrestrained money printing, modern bankers at the Federal Reserve assure us that today’s financial system is immune to such a fate. Austrian business cycle theory, however, reveals that current economic stimulation may be propelling us toward a crisis of catastrophic proportions: a crack-up boom that marks the dramatic end of this boom-and-bust cycle. When a central bank expands the money supply to reinflate bubbles, it destroys the currency’s purchasing power. This endgame, in which the monetary system crumbles beneath a weak economy, represents the ultimate failure of interventionism. Once the public expects prices to keep rising, hyperinflation becomes a self-fulfilling prophecy.
Perhaps one of the most bizarre recent developments in economic news has been the attempt by establishment media, on behalf of President Joe Biden, to declare U.S. inflation “defeated” despite all the facts to the contrary.
A large swath of American consumers are facing financial hardship as they grapple with elevated living costs, record-high credit card use, and two years of negative real wage growth. This perfect storm could decimate financially fragile households in the next downturn.