Categories
Biden administration Corn destruction of the middle class disposable income eating economic Economy Federal Reserve food bills food prices food shortages Headline News hiding inflation hyperinflation Intelwars Jimmy Carter plandemic Prepare Preparedness processed foods scamdemic wake up

Yikes! Corn Prices Are Up Roughly 50% In 2021 As Americans Brace For Years Of Horrific Food Inflation

This article was originally published by Michael Snyder at The Economic Collapse Blog. 

PREPPING FOR THE UPCOMING GOVERNMENT-INDUCED FOOD SHORTAGES

It sure didn’t take long for the Joe Biden era to start resembling the Jimmy Carter era.  Prices are going up so fast that even the mainstream media can’t stop talking about it.  This has already become a major national crisis, and it should be exceedingly obvious to everyone that it is only going to get worse.

The Biden administration wants to borrow and spend trillions of more dollars on top of all the absurd spending that has already happened, and the Federal Reserve is going to continue to pump gigantic piles of fresh cash into the financial system.  Collectively, our leaders are literally committing economic malpractice, and if most Americans truly understood what was going on they would be out in the streets protesting against it.

Already, a lot of people out there are becoming extremely alarmed that their food bills are so high.  One of the things that is driving this is the price of corn.  Most Americans don’t eat a lot of canned corn or corn on the cob, but corn has become a key ingredient in literally thousands of other products in our grocery stores.  If you doubt this, just wander through a grocery store sometime and look for products with these ingredients

  • Corn flour, cornmeal. corn gluten, cornflakes, etc.
  • Cornstarch, also listed on labels as starch or vegetable starch
  • Corn oil
  • Corn syrup or high fructose corn syrup
  • Dextrins
  • Maltodextrins
  • Dextrose
  • Fructose or crystalline fructose
  • Hydrol, treacle
  • Ethanol
  • Free fatty acids
  • Maize
  • Zein
  • Sorbitol

When you know what to look for, pretty soon you start realizing that corn is in the majority of our processed foods.  They put it in bread, they put it in soda, they put it in baby formula, and food manufacturers are constantly coming up with new ways to stick it into even more products.

Needless to say, this is absolutely horrible for our health, but that is a topic for another article.

In this article, the point I am trying to make is that the price of corn is going to affect the price of most of the things that the average American buys at the grocery store, and at this point, the price of corn is up “roughly 50%” so far in 2021…

America’s biggest cash crop has rarely been more expensive. Corn prices have risen roughly 50% in 2021 and a bushel costs more than twice what it did a year ago.

Corn has been one of the sharpest risers in the broad rally in raw materials that is prompting companies to boost prices for goods and fueling concern among investors that inflation could hobble the post-pandemic economic recovery.

Here in the United States, most Americans will be able to absorb the price increases that are coming, but in other parts of the globe, a price shift of this magnitude could mean that millions of families will no longer have enough money to buy the food they need.

Of course, it isn’t just the price of corn that is going crazy.  As that same Wall Street Journal article noted, we are seeing wild inflation in many areas of the U.S. economy right now…

Lumber prices have shot to more than four times what is typical, pushing up home prices and obliterating renovation budgets. Copper, a cog of industry found throughout the home and in electronics, hit record prices Friday. Crude oil hasn’t cost so much since 2018 and soybeans are trading at their loftiest level since 2012.

Day after day, inflation is making headlines, and this is going to cause a lot of fear.  As a result, hordes of people will be rushing out to their local retail stores “to stock up”, and this will do a couple of things.

First of all, it will make inflation even worse.  When demand rises relative to supply, that pushes prices in an upward direction, and that is just basic economics.

Secondly, it will intensify our ongoing shortages.  As I detailed the other day, the shortages that we are experiencing now are worse than anything that we went through in 2020, and there will be more shortages in the months ahead.

And as if we weren’t already facing enough problems, one of the most important fuel pipelines in the U.S. was just shut down by a very sophisticated ransomware attack

One of the largest US fuel pipelines remained largely paralyzed Monday after a ransomware cyberattack forced the temporary shutdown of all operations late last week — an incident that laid bare vulnerabilities in the country’s aging energy infrastructure.

The victim of the attack, Colonial Pipeline is a company that transports more than 100 million gallons of gasoline and other fuel daily from Houston to the New York Harbor.

It is very interesting to note that some in the mainstream media are trying to link this attack to Russia.  Whether that is true or not, we all know where all of this is eventually heading.

These are such troubled times, but most Americans still don’t realize what we are facing.

Sending out big government checks made everyone feel good for a little while, but it came at a great cost.  Creating trillions of dollars out of thin air is absolutely destroying the value of our currency, and once the U.S. dollar is dead there will be no going back.

To me, we just hit a milestone that is extremely telling.  If you can believe it, the total value of all cryptocurrencies is now greater than the value of all U.S. currency currently in circulation

Cryptocurrency has hit a significant milestone: It’s now worth more than all US dollars currently in circulation.

Cryptocurrencies hit a valuation of $2 trillion on April 29, according to The Wall Street Journal. That’s about the same valuation as all US dollars in circulation. However, it has since hit as high as $2.25 trillion — and in the process actually exceeding dollars in circulation.

This is utter madness!

But this is what can happen when the Federal Reserve electronically pumps trillions upon trillions of new dollars into the financial system.

An inflationary collapse is in the process of unfolding right in front of our eyes, and I am certainly not the only one loudly warning about this.  Earlier today, I came across a piece that was authored by Dr. Don Boys

I am yelling fire because fire is raging. Mixing metaphors, the storm is not coming; it’s already here. America’s financial house of cards will fall, taking other nations with her. Thoughtful Conservatives must inform people of imminent danger because families will be disrupted, businesses will fail, couples will be divorced, and children will suffer immeasurably.

The economy has faltered, is failing, and will fall.

I see no way out of the coming collapse. Sometimes politicians make such a mess of things that there is no way to correct or solve the mess. It’s almost like being in a small boat on a raging sea, unsure how far you are from the coast you left and the distance to where you hope to dock. You keep going hoping to stay afloat; however, our “boat” is overwhelmed with accelerating debt.

For years we have been marching toward this sort of a disaster, but now that march has evolved into a full-on sprint.

Everything that the “economic alarmists” have been warning about is starting to happen, but this is just the beginning.

Much worse is still to come, and the fall of the U.S. economy is going to absolutely shock the entire globe.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on FacebookTwitter, and Parler, and anyway that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

The post Yikes! Corn Prices Are Up Roughly 50% In 2021 As Americans Brace For Years Of Horrific Food Inflation first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

Share
Categories
Americans central banking Corn COVID-19 disposable income economic collapse Food food prices Headline News Hunger Income inflation Intelwars money prices surge Statistics

What Will You Do When Inflation Forces U.S. Households To Spend 40 Percent Of Their Incomes On Food?

This article was originally published by Michael Snyder at The Economic Collapse Blog. 

Did you know that the price of corn has risen 142 percent in the last 12 months?  Of course, corn is used in hundreds of different products we buy at the grocery store, and so everyone is going to feel the pain of this price increase.  But it isn’t just the price of corn that is going crazy.

We are seeing food prices shoot up dramatically all across the industry, and experts are warning that this is just the very beginning.  So if you think that food prices are bad now, just wait, because they are going to get a whole lot worse.

Typically, Americans spend approximately 10 percent of their disposable personal incomes on food.  The following comes directly from the USDA website

In 2019, Americans spent an average of 9.5 percent of their disposable personal incomes on food—divided between food at home (4.9 percent) and food away from home (4.6 percent). Between 1960 and 1998, the average share of disposable personal income spent on total food by Americans, on average, fell from 17.0 to 10.1 percent, driven by a declining share of income spent on food at home.

Needless to say, the poorest Americans spend more of their incomes on food than the richest Americans.

According to the USDA, the poorest households spent an average of 36 percent of their disposable personal incomes on food in 2019…

As their incomes rise, households spend more money on food, but it represents a smaller overall budget share. In 2019, households in the lowest income quintile spent an average of $4,400 on food (representing 36.0 percent of income), while households in the highest income quintile spent an average of $13,987 on food (representing 8.0 percent of income).

Needless to say, the final numbers for 2020 will be quite a bit higher, and many believe that eventually the percentage of disposable personal income that the average U.S. household spends on food will reach 40 percent.

That would mean that many poor households would end up spending well over 50 percent of their personal disposable incomes just on food.

At one time that would have been unimaginable, but now everything is changing.  As I noted above, the price of corn his increased 142 percent since this time last year…

Corn prices have jumped roughly 142% over the past year to $7.56 per bushel, the highest price seen in eight years for the crop.

A drought in Brazil and increased demand in China have put pressure on global suppliers.

In other areas we are seeing more moderate inflation, but overall we just witnessed the largest increase in food inflation “in almost nine years”

The average prices in March of 2021 for pork chops and chicken breasts are both up more than 10% compared to March of 2020. Eggs and cheddar cheese are both up 6%.

Looking at all consumer goods as a whole, the latest inflation data in the Consumer Price Index from the U.S. Bureau of Labor Statistics shows the largest month-to-month increase in almost nine years.

Meanwhile, the price of lumber just continues to shoot even higher.

In New Jersey, one man says that the total cost of lumber used in building his new home will reach $70,000

Tom McCarthy can’t finish building a home in Bergen County, New Jersey because of the lumber shortage.

“There are pieces of wood that we can’t find,” said McCarthy, a real estate broker with the Chen Agency who also builds homes with his father on the side.

McCarthy estimates the cost of lumber for the home will hit $70,000, nearly double the cost of building the exact same home in a nearby town just eight months ago.

Isn’t that nuts?

Instead of building a new home, you could try buying an existing one instead, but real estate prices in many areas have gotten completely insane.

In northern California, one house recently sold for more than a million dollars over listing price

When a house in Berkeley sold for more than $1 million over its list price in late March 2021, it was covered in media outlets across the Bay Area, including this one.

While the Berkeley sale was particularly sensational — it sold for double its list price and received 29 offers — these individual stories are becoming more common in today’s real estate market, according to recent data and anecdotes from real estate professionals.

I never imagined that I would see such a thing happen.

But one real estate agent says that such wild bidding wars are becoming increasingly common

And that’s especially true in the East Bay. “People are not surprised when a home goes $1 million over,” said Josh Dickinson, the founder of real estate agency Zip Code East Bay. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.”

This is what the beginning stages of hyperinflation look like, but Federal Reserve officials insist that we have nothing to be concerned about.

In fact, Eric Rosengren just told the press that the crazy inflation we are seeing now “is likely to prove temporary”

Boston Federal Reserve President Eric Rosengren in an interview with MarketWatch on Wednesday dismissed talk of scaling back asset purchases as premature, and said temporary factors pushing up inflation this spring won’t last.

“My view is that this acceleration in the rate of price increases is likely to prove temporary,” Rosengren said Wednesday.

Do you believe him?

I don’t.

As Simon Black has pointed out, the federal government is just going to continue to borrow and spend trillions upon trillions of dollars…

This is the big one. The US federal government is hoping to spend a whopping $11 TRILLION this year, between the regular budget, COVID stimulus already passed, and all the new legislation they’re proposing.

And it’s only May.

Obviously Uncle Sam doesn’t have the money. So they have to borrow it.

Almost everybody loved it when the federal government started sending out big, fat stimulus checks.

But you aren’t going to love it when a cart of food costs you $400 at the grocery store.

Whenever the government hands out “free money”, someone has got to pay for it, and one way we are paying for it is through higher prices.

If you do not believe that this is a major national crisis yet, you will soon, because it won’t be too long before most of the country is loudly complaining about how nightmarish inflation has become.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on FacebookTwitter, and Parler, and anyway that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

The post What Will You Do When Inflation Forces U.S. Households To Spend 40 Percent Of Their Incomes On Food? first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

Share
Categories
consensus consumer crash disposable income economic collapse Economy Financial Headline News Income Industries Intelwars Job growth jobless claims labor market Market Crash modern monetary theory money unemployment wipe out the middle class

November Payrolls Preview: It’s About To Get Ugly Again

This article was originally published by Tyler Durden at ZeroHedge. 

After several months of blistering job growth, economists expect the rate of US jobs growth to cool sharply in November, with consensus looking for 478k nonfarm payrolls to be added to the economy (well below the 638k seen in October) due to the broad-based resurgence of the coronavirus and related business restrictions which are consistent with a deceleration in job growth; the jobless rate is seen declining by 0.1ppts to 6.8%, although analysts will be paying attention to the U6 gauge of underemployment as well as the participation rate.

The reason for the declining expectations is that, as NewsSquawk writes, labor market gauges have mostly been on the soft side in November; ADP’s gauge of payrolls expectations missed the consensus in November, lowering the bar for the official NFP data; initial jobless claims data ticked up in the BLS survey reference week while continuing claims did not fall as much as analysts had expected; ISM reports showed that labor market conditions in the manufacturing sector fell back into contraction territory, while the services gauge showed only modest improvement.

On the positive side, there will be strong growth in the construction industry and in trucking, courier, and delivery categories, reflecting favorable weather and the accelerating shift to e-commerce this holiday season. The latter effect should help offset the drag from declining mall traffic in the retail. Additionally, Markit’s gauge of services employment in November was positive, with the data compiler noting that firms were taking on staff at a rate not seen since the survey began in 2009. Another bright spot was the Challenger job cuts data, which fell sequentially, although remains still ugly on a y/y basis; but even then, Challenger warned that hiring plans for the holidays were lower than last year, and the report warns about consumers’ lower disposable income, which could hit spending and pressure the labor market in the months ahead.

The data will be released at 0830 EST; here is what to expect courtesy of NewsSquawk:

  • Nonfarm Payrolls exp. 481k (range -100k to +0.975k, prev. +638k);
  • Unemployment rate exp. 6.8% (range: 6.0-7.3%, prev. 6.9%);
  • U6 unemployment (prev. 12.1%);
  • Participation rate (prev. 61.7%);
  • Private payrolls exp. +587k (prev. +906k);
  • Manufacturing payrolls exp. +40 (prev. +38k);
  • Government payrolls (prev. -268k);
  • Average earnings m/m exp. +0.1% (prev. +0.1%);
  • Average earnings y/y exp. +4.3% (prev. +4.5%);
  • Average workweek hours exp. 34.8hrs (prev. 34.8hrs).

ADP: The private payroll data from ADP reported 307k jobs were added to the US labor market in November, missing the consensus +410k, although the prior was revised up 39k to 404k. Although the headline was disappointing in November, with the pace of gains slowing, the report said job growth was still positive across all industries and sizes. Analysts have noted that ADP’s gauge of the labor market has undershot the official BLS numbers since the COVID pandemic, although some note that the margins of the miss have become smaller.

JOBLESS CLAIMS: Initial jobless claims data which coincide with the BLS survey period saw claims tick up to 748k from 711k (the consensus expected a little changed 707k); continuing claims data for the survey period, however, fell to 6.07mln from 6.37mln, a little short of the consensus, which expected a fall to 6.02mln. Pantheon Macroeconomics said that the rise in claims that week was not a one-time fluke, and was more likely the start of an upward trend that would persist until the COVID wave subsides. Much depends on the extent of the inevitable upward kick which will be triggered by Thanksgiving gatherings, but that still means that layoffs could continue to rise through the year-end. The consultancy said the path for the labor market would depend on what extent COVID cases ticked up in wake of the Thanksgiving holidays, where any significant rise could lead to layoffs continuing to rise through the end of the year. Taking a broader view, heading into the October payrolls report, the four-week moving average was around 813k, and that fell to 744k in the BLS reference period; that number has continued to edge lower in the weeks that have followed, auguring well for the jobs market ahead – and accordingly, any payrolls upside surprise may therefore be given more credence by traders.

MANUFACTURING SURVEYS: The manufacturing ISM report reported worsening labor market conditions in November, with the employment sub-index falling nearly 5 points to 48.4 points, slipping back into contraction after just one month of printing above 50.0 again; with that said, ISM noted that the employment index was still 20.9 points above the low of 27.5 points seen in April. Nevertheless, the report said that the continued strong new-order levels and expanding backlogs indicated potential employment strength for the remainder of Q4, and qualitative commentary noted that for the third straight month, and with increased frequency, panelists’ comments indicate that significantly more companies are hiring or attempting to hire than those reducing labor forces.

SERVICES SURVEYS: While most other labor market gauges in the month were erring on the soft side, metrics in the services sector – which accounts for over 70% of US GDP – improved. The ISM services PMI’s employment sub-index saw an uptick in the month, rising 1.4 points to 51.5 to print the third month above 50.0; respondents noted that they were unable to fill vacant positions with qualified applicants, and they were having to overstaff due to high turnover and people being quarantined. And this better showing was also reflected in Markit’s data too, with the data revealing that the recent improvement in demand and the brightening outlook encouraged firms to take on extra staff at a rate not seen since the survey began in 2009, underscoring how increased optimism is fuelling investment and expansion, boding well for the payrolls data.

JOB CUTS: US-based employers announced 64,797 job cuts, the second-lowest monthly total for 2020, according to Challenger’s data (-19.7% m/m, +45.4% y/y); in 2020 YTD, US employers have announced 2.23mln job cuts (+298% vs 2019 YTD), the highest annual total on record. The report noted that the fall in disposable income seen in October will have an impact on spending, which will lead to further cuts ahead. ‘Market conditions’ were cited as the main reason for November’s job cuts, followed by ‘demand downturn’, then ‘restructuring’, and only then ‘COVID’ (though COVID still leads all reasons this year, with over 1mln). The report also said that companies announced 185.5k hiring plans in November, bringing the YTD total to 3.11mln; of those just under 800k are related to seasonal hiring plans, which are down y/y when compared to 2019 levels.

ARGUING FOR A WEAKER-THAN-EXPECTED REPORT:

The Third Wave. The resurgence of the coronavirus produced a series of business restrictions and reduced demand for food services. While national job growth remained very strong during the second wave in the summer, it nonetheless weighed on affected states, with SunBelt service rehiring slowing sharply in July and August (see Exhibit 1). Given the increased breadth and severity of the third wave, we expect a more visible impact on the national data. And while the impact is likely to be larger in the December jobs report  (released on January 8th), indoor dining closures in Illinois at the beginning of the month and nearly state-wide measures in California by the middle of the month argue for softness in leisure and other services employment in tomorrow’s report.

Big Data. High-frequency data on the labor market softened on net, averaging just +30k across six measures (median +130k), as shown in Exhibit 2. Of note, only the Dallas Fed population survey is consistent with a larger-than-expected gain—though we note it also correctly flagged the strength in last month’s report.

ADP. Private sector employment in the ADP report rose by 307k in November, below consensus expectations and consistent with slowing job growth.

Census hiring. Census temporary workers are set to lower nonfarm job growth by around 90k in tomorrow’s report.

ARGUING FOR A BETTER-THAN-EXPECTED REPORT:

Construction sector. Favorable weather in early November coupled with the surgen in demand for single-family housing argues for a sizeable gain in the construction category in tomorrow’s report (we assume roughly +100k, mom sa).

Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get — rose further into expansionary territory (to +7.2 in November from +7.1 in October and +3.3 in September).

Jobless claims. Initial jobless claims declined in the November payroll month but at a slower pace than during the summer, averaging 744k per week vs. 826k in October (or -82k mom, vs. three-month-average change of -187k). By week, initial claims rebounded in the first half of November, consistent with possible temporary layoffs due to the virus. While continuing claims fell sharply between the payroll survey weeks (-1.7mn), this decline partly reflects expiring regular-state-programs as opposed to reemployment, and we place less weight than usual on this indicator. Across all programs (including emergency benefits), continuing claims fell by 0.9mn(vs. -2.5mn in October, NSA).

Holiday hiring. Non-seasonally-adjusted retail payrolls have risen by 460k in the last three Novembers (on average), but with mall traffic down sharply due to the virus, we believe retailers are hiring fewer seasonal workers in 2020. While we assume a roughly 100k seasonally adjusted drag from this channel, we expect a partial offset from trucking, warehousing, and delivery categories due to accelerating e-commerce spending. Job growth in those categories averaged +46k jobs over the last three months (includes federal post office), and we expect a stable or faster pace in November.

Employer surveys. Business activity surveys declined on the net in November, and the employment components of our survey trackers remained stable in a narrowly-expansionary territory (non-manufacturing +0.4pt to 50.5; manufacturing-0.1pt to 54.4).

Job cuts. Announced layoffs reported by Challenger, Gray & Christmas fell by 7% in November after falling by 38% in October (mom, sa by GS). They remain 45% above their November 2019 levels.

The post November Payrolls Preview: It’s About To Get Ugly Again first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

Share