Yesterday’s report from the Bureau of Labor Statistics (BLS) showed that wage and salary costs in the private sector rose 1.6% for the three months ended in September. That’s 6.55% annualized, the highest in at least 15 years- see below. When benefits are included, total compensation costs rose by 1.4% or 5.70% annualized.
But hey… let’s all keep chanting the Powell mantra: “inflation is transitory”. I hear that burning incense may also help.
As luck would have it, yesterday also saw the Eurozone harmonized inflation hit 4.1%, the highest reading since 2008. Predictably, European bond markets had a fit, with 10 year German Bund yields jumping a 14 basis points from -0.20% two days ago to -0.06%.
The highly indebted and “junky” periphery (aka Italy and Greece) fared even worse, with yields rising 25 and 30 bp respectively. (1 basis point = 0.01%).
But hey, let’s all sip some seasonal Beaujolais Nouveau and toast Mme. Lagarde. Like incense, it doesn’t help but at least it makes you happy. Or very happy, depending on quantity. Salut..
Beaujolais Nouveau?
ReplyDelete“wine of this vintage, fresh as the memory of harvest and raw as the experience of the year, unpolished by time, a reflection of the emotion of the moment.”
my, my, I am going to be a man of culture soon! =)
btw, I have come up with a "cunning plan" (see blackadder)
ReplyDeleteFirst step: Tame inflation... cut social security; benefits and govt spending; increases taxes only on the working class. If the peasants have no money to spend on anything, there can be no inflation. Indeed, we should see deflation.
Second step: Upon deflation... print money (because deflation)... buy bonds. Thus interest rates stay low (negative?)... Asset prices high.... Rich poor gap increases; so your rich patrons are happy.
Third step: Deflation reduces government tax revenue... cut social security; benefits and govt spending; increases taxes only on the working class. Increases deflation....
Fouth step: Upon deflation... print money (because deflation)... buy bonds. Thus interest rates stay low (negative?)... Asset prices high.... Rich poor gap increases; so your rich patrons are happy... repeat cycle.
This way, we get endless free money and the puppet masters are happy.... we even solve climate change!