Did US Inflation Accelerate Relative to Euro Area?

Yes, for core, no for headline:

Figure 1: US-Euro Area month-on-month annualized core inflation differential (blue), 2019-2021M02 average (red), 2021M03-2022M08 average (green). Inflation calculated as log-differences on CPI (US), and HICP (Euro area). HICP seasonally adjusted using Census X-13, log transform, X-11 adjustment. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, Eurostat via FRED, NBER, and author’s calculations.

US core inflation post-ARP rose significantly higher than Euro Area — 2.2 percentage points, statistically significant at the 10% level. One could interpret this as an excessively aggressive stimulus; alternatively one could consider the Euro area recovery packages as insufficiently aggressive. In other words, it’s not as if we didn’t get something with the additional inflation.

In the end, in terms of the inflation that consumers face, the Euro Area experienced the same acceleration in inflation that the US did. This is shown in the corresponding graph of headline inflation differentials.

Figure 2: US-Euro Area month-on-month annualized inflation differential (blue), 2019-2022M08 average (red). Inflation calculated as log-differences on CPI (US), and HICP (Euro area). HICP seasonally adjusted using Census X-13, log transform, X-11 adjustment. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, Eurostat via FRED, NBER, and author’s calculations.

Euro area inflation rose relative to US with the jump in natural gas prices starting in June/July 2021. If one checked for a change in the differences at 2021M07, one would find Euro area inflation accelerated 1.4 percentage points (statistically significant at the 10% level).

It’s interesting to see what this means for the levels of consumer prices. Normalizing to 2021M03 (passage of ARP), we have the following.

Figure 3: US-Euro Area log price level (blue). HICP seasonally adjusted using Census X-13, log transform, X-11 adjustment. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, Eurostat via FRED, NBER, and author’s calculations.

89 thoughts on “Did US Inflation Accelerate Relative to Euro Area?

  1. Ivan

    Poor DeSantis, he had to import refugees from Texas in order to pretend that there was a border crisis in Florida – and be able to fill up a plane of 50 to be flown out of there (presumably before they filled up the whole state).

    https://www.cnn.com/2022/09/16/politics/desantis-marthas-vineyard-migrants/index.html

    The only thing more pathetic than this political stunt is that it probably will give him some street cred with Trump minions watching Faux news. At least some of these refugees get a free ticket to places where they would have gone anyway – funded by Florida taxpayers. We need to set up refugee travel agencies to help those who need or want to go up north with finding the right free Red State transportation for the first leg – then give them a Greyhound tickets for the next leg – to wherever it is they have family/friends to settle in with.

    Reply
    1. Macroduck

      They fake everything. Even “owning the libs”. Faux news will pretend that liberals are outraged by immigrants showing up when we’re reciting “give us your tired, your poor” in our heads.

      Reply
      1. Ivan

        I hear it cost about 500K to charter a plane and then fly those 50 immigrants first to Florida (so it could look like they came from his state) then on to MA. That is a cool $10,000 per person. They could have used commercial airlines and send them First Class for less than that. I guess DeSantis just love government waste. He could easily have gotten Greyhound bus ticket for 1000 people to anywhere in the US that they wanted to go (except FL).

        Reply
        1. CoRev

          Ivan worries about government waste, and ignores IRA costs, and the $300B to $1T costs of the student loan decision. Or even the costs of these “illegal immigrants” to state and local government taxpayers.

          It’s OK if it happens in a red state, but not a blue locale?

          What a bunch of lying hypocrites you are!

          Reply
          1. pgl

            These students are paying for charter planes? I don’t think so. Your lies have become so dumb that no one takes you seriously.

          2. Macroduck

            CoVid, you dolt, the inflation reduction act and student loan forgiveness are both expenses aimed at doing good. Both represent fulfillment of promises to voters, the majority of whom voted for Biden and Democratic members of the House and Senate. That’s not waste except to partisan hacks like you.

            Shipping people around the country to make a cheap, mean-spirited political statement at government expense is an entirely different kettle of fish. Your refusal to acknowledge that difference is the heart of your problem.

          3. CoRev

            MD, how can I stop laughing at your naivete? “Shipping people around the country to make a cheap, mean-spirited political statement at government expense (taxpayer) is an entirely different kettle of fish. Your refusal to acknowledge that difference is the heart of your problem.” Your federal government has been doing it in numbers a magnitude far higher than those few red states finally shedding and sharing the costs of the impacts of illegal immigrants.

            BTW, this is a lie of omission: “CoVid, you dolt, the inflation reduction act and student loan forgiveness are both expenses aimed at doing good.” Good for Dem supporters at the cost of everyone else.

            It’s OK if it happens in a red state, but not a blue locale? https://video.twimg.com/ext_tw_video/1563131480179720192/pu/vid/1280×720/HSIllI2lU2Lofecu.mp4?tag=12

            What a bunch of lying hypocrites you are! Is there no end to the hypocrisy?

          4. Ivan

            The issue of “waste” is about doing something for a much higher price and less efficiently than it could have been done.

            Spending $10,000 per person for transporting people from Texas to the northeast is waste. I could easily arrange for the private sector transport at a price of about $200 per person.

            Waste is completely different from your example. You give an example of differences in spending priorities. Just because you disagree with a specific item of government spending doesn’t make it “waste”. It will accomplish a common/public goal. Only if the stated goal could have been accomplished at a much lower price can you discuss it in the context of waste.

      2. CoRev

        MD says: “Faux news will pretend that liberals are outraged by immigrants showing up when we’re reciting “give us your tired, your poor” in our heads.” and yet, those leaders in liberal land call out the national guard, deport the “give us your tired, your poor” ILLEGAL immigrants to a military base off their island, and “useful idiots” complain it all being a lie.

        This open border policy is what you wanted. Now live with it in your ?welcoming/sanctuary? locales.

        What a bunch of lying hypocrites you are!

        While we are on policy issues, whe3re’s that list of Biden’s successful policies? I’m espeically interested in his economic policies, since this is an economics/politics blog.

        Sigh!

        Reply
        1. pgl

          “This open border policy is what you wanted.”

          Another blatant lie? Come on troll – could make just one honest comment in your pathetic little life?

          Reply
        2. Macroduck

          Liar. You have no idea what I want. This is just part of the sick bag of rhetorical tricks you use – assign beliefs to your opponents which are not their actual beliefs. Seen it before.

          You’re useless for any real effort to make things better, because all you want to do is corrupt any discussion with partisan lies. Useless.

          Reply
        3. Ivan

          You mean to tell me that down in Texas they invite them into their own homes?

          The only sensible thing was to help transfer these asylum seekers to a place that had the space and facilities and translators to house and feed 50 people while their final destination of choice is prepared. You cannot find them a more permanent home and job right away – so you house them in central facilities while you work on that (or at least that is what a good Christian would do).

          If Texas would actually announce their busloads up front – rather than trying to hide them – the recipients of these asylum seeking busloads could begin preparing for their arrival – and maybe they could go straight from the bus to their new home. Instead they are being conned and lied to in order to waste taxpayers money on using them as a political prop.

          Reply
          1. CoRev

            Ivan, what world do you live in? “If Texas would actually announce their busloads up front – rather than trying to hide them – the recipients of these asylum seeking busloads could begin preparing for their arrival – and maybe they could go straight from the bus to their new home. ” I’m sure the order states would like the illegal immigrants/cartels/US Govt to announced their intentions, time and locations for moving those same illegal immigrants.

            How much hypocrisy is enough?

          2. Ivan

            @CoRev

            You sure know how to set a low bar. The state of Texas is expected to act like criminal cartels and if you ask for more than that then you are a hypocrite?

            The minuscule amount of people that would be each states fair share (about 1000 per million people living in the state) could be easily absorbed and no blue state has claimed it would refuse to do that. If Texas told New Yorks major that they would bus up 100 people per month (=NYC fair share of the problem), then NY would have no problem finding and preparing housing for that number of people. In reality the problem is minuscule even though in the Faux world it has been blown up to be significant (and they are using all kinds of pathetic and cruel tricks to make it look “huge”)

          3. CoRev

            Baffled, ?segregationist? is every contradictory social action to yours always racist?

            Don’t you realize, yet, that over claiming race/segregation has resulted in loss of almost all its moral wight? Border states are shedding and sharing the costs of your border policy.

            What hypocrites.

          4. baffling

            no corev, the republicans are taking the same actions as the reverse freedom riders of decades ago. same actions. that is a fact.

            on the other hand, a texas sheriff is investigating these actions. he has not stated so, but there appears to be coercion on the part of some individuals. and this coercion could rise to the level of kidnapping. that is why the feds are being called in. desantis and abbott may very well get themselves charged with conspiracy to kidnap. glad they were so vocal about their actions.
            https://www.cnn.com/2022/09/19/us/bexar-county-texas-migrant-investigation/index.html

          5. baffling

            “I’m sure the order states would like the illegal immigrants/cartels/US Govt to announced their intentions, time and locations for moving those same illegal immigrants.”
            the individuals who were illegally moved (possibly kidnapped) by desantis were NOT illegal immigrants. they were in the usa legally. however, they were treated as illegal due to the color of their skin and nation of origin. call that what you will, covid.

            I am a believer that we are a nation of laws. if abbott and desantis are found to be in violation of federal laws for coercion, fraud and kidnapping, they should face jail time. to force individuals with a legal right to be in the United States onto planes and drop them off at undisclosed locations is not just morally corrupt, it has legal violations. those violations should be enforced.

          6. baffling

            it is going to be easy to get support for abbott and desantis to face criminal charges. they committed fraud and kidnapping, or were conspiracy partners in those crimes. we have texas sheriffs to thank for this.

            hey covid, you still avoiding responsibility for the quad bypass surgery from your decades of poor life choices. or are you still blaming others for your failures? it wasn’t the Big Mac that almost killed you, it was the unknown prescription medicine provided by that liberal doctor of yours. yeah right….no personal responsibility.

          1. CoRev

            AndrewG, my feelings, hurt? I’m a conservative, and I don’t live by my feelings, but do live by my logic. It is the WOKE liberals that live by feelings.

            Make a logical argument and live by it. I, and most conservatives do.

            “What a bunch of lying hypocrites you are!”

            “Sigh!”

            Your feelings are hurt very easily.

          2. AndrewG

            “I’m a conservative, and I don’t live by my feelings”

            Out of all the lies coming out of your mouth, this one is the most poignant.

            Name one thing about Donald Trump that his critics got right. Just one.

          3. CoRev

            As an example of stupid liberal complaints to which I agree: “A Democratic super PAC filed a complaint in March against former President Donald J. Trump that accused him of violating federal election law by not officially informing the F.E.C. that he planned to run again in 2024.”
            https://www.nytimes.com/interactive/2022/08/30/us/politics/trump-fec-complaint.html

            AGREE, He hasn’t yet officially claimed to be running in 2024.

            Now show us examples of liberal complaints against Trump shown to be true, BEING NARCISSISTIC or similar contentions doesn’t count. Can’t be a politician without it.

        4. Barkley Rosser

          CoRev,

          Your memory is down the toilet. You keep asking for people to provide you with lists of things that have been provided to you numerous times. List of Biden accomplishments? I have personally done so for you several times, but you keep pretending that no such list has ever been presented.

          So, there is a lot more, but three biggiess:

          1. Passed major infrastructure bill that even GOPsters who voted against it are running around claiming responsibility for it to their constituents, it is so popular. Of course Trump kept having :infrastructure weeks” but could never even make an actual proposal to Congress, much less actually get one passed.
          2. Highest private empployment of all time in US, along with very low unemployment rate.
          3. Organizing nations to support Ukraine against Russian invasion. If Trump were president, Putin would probably have succeeded in conquering Kyiv and Zelenskyy would quite likely be dead.

          There is plenty more.

          Oh, and please do not ask us again for a list of negative externalities due to global warming, another one where lists have been provided to you but you keep claiming nobody has done so. Just how far out of your mind have you become, CoRev?

          Reply
          1. CoRev

            Barkley, continuously making the same mistake should be embarrassing. Cite your;list of Biden’s apparent successes in terms of policy(s).

            For example, your #2: “2. Highest private empployment of all time in US, along with very low unemployment rate.” Is probably a policy of continuing with Trump’s labor policy, “Proposed revision of Obama overtime rule (July 2017)” and his MAGA focus on US production over foreign after implementation, achieved an employment rate not yet achieved by Biden.

            His biggest policy impact was by writing and implementing his “contract with American voters,”https://ballotpedia.org/Policy_issues_under_the_Trump_administration

            Note: much of it was to remove Obama/Biden administration regulations hampering business and citizen initiatives.

            Do you remember any of that plan? Can you admit there was an economic difference in Trump’s vs Biden’s administration policies? Most voters can.

          2. Barkley Rosser

            CoRev,

            Wow, you are just so pathetic, attempting to salvage something after having made a complete fool of yourself. Clearly you have to admit that Biden had a Yuge win with the infrastructure bill, a matter on which Trump was a total embarrassing failure. And at least you do not seem now to be trying to imitate JohH or Anonymous with their pro-Putin propaganda here.

            As for Biden’s success with employment, it is partly due to something you have dinged him over because of its inflationary element, which I readily accepted, although you stupidly forgot that I did so and attempted to score some points on that, only to fall flat on your face as usual. So his stimulative fiscal policy in early 2021 helped increase employment. Do you want to deny that or do you want to claim somehow that was not a “policy”? Or so you want to somehow claim it was a continuation of older Trump policies?

            Wow you are seriously pathetic, getting more and more out of it.

  2. ltr

    https://www.bloomberg.com/news/articles/2022-09-17/france-s-edf-may-halt-power-exports-to-italy-for-two-years?srnd=premium-europe&sref=ZVajCYcV&leadSource=uverify%20wall

    September 17, 2022

    Italy Mulls Ways to Offset any Drop in French Power Exports
    The plunge in EDF’s nuclear power production a risk to exports
    France denies that it may cut off power supply to Italy
    By Tommaso Ebhardt and Chiara Albanese – Bloomberg

    Italy said that it’s working on back-up plans in case France halts power exports to the country as state-controlled Electricite de France SA battles dwindling output from its nuclear plants and Europe’s energy crisis deepens.

    Nuclear power output by EDF is set to fall to the lowest in more than three decades as it grapples with maintenance for its aging plants, turning France, traditionally Europe’s biggest electricity exporting country, into a net importer. Newspaper La Repubblica reported on Saturday that Italy has received written notification from France about a possible two-year halt in supply. A spokeswoman for the Italian ministry of energy transition confirmed the report….

    Reply
    1. ltr

      https://news.cgtn.com/news/2022-09-15/China-leads-world-in-number-of-nuclear-power-units-under-construction-1dlnpsva5xe/index.html

      September 15, 2022

      China leads world in number of nuclear power units under construction

      China continues to lead the world in the number of nuclear power units under construction, according to a blue book issued by the China Nuclear Energy Association (CNEA) on Wednesday.

      As of the end of August, China has 53 commercial nuclear power units with a total installed capacity of 55.59 gigawatts, while another 23 units of 24.19 gigawatts in total are under construction.

      Nuclear power accounts for about 5 percent of the country’s total electricity generation, up from 2 percent a decade ago, CNEA Secretary General Zhang Tingke told China Media Group.

      China has made important progress in the export of the Hualong One nuclear power units with its own third-generation nuclear power technology, Zhang said, adding that two Hualong One units have been put into operation in Pakistan.

      The third Hualong One unit in Pakistan and relevant projects in Argentina are under construction, while the UK has also deemed it qualified for use in the country.

      Nuclear energy is essential for China’s transition to clean and low-carbon energy. The blue book shows that the proportion of nuclear power generation in China will continue to increase, and the application scenarios of nuclear energy are also expanding….

      Reply
  3. pgl

    Ah – boohoohoo for the poor little shareholders of Rosneft. I guess it is OK if Putin expropriates an entire nation and has many of its citizens needlessly killed but this precious little oil giant whines that 3 of its refineries were taken? Disgusting oilgarchs.

    https://www.msn.com/en-us/money/markets/russian-oil-company-ronesft-calls-german-government-nationalization-of-company-illegal/ar-AA11Voii?ocid=msedgdhp&pc=U531&cvid=cca4e637f0de4105810c0796136f958b

    Russian oil company Rosneft on Saturday described as “illegal” the German government’s decision to take control of the company’s three refineries in the German country on the grounds that the production of the oil distilleries was endangered by Russian ownership of the company. “This decision is illegal and, in essence, is an expropriation of property assets following the situation intentionally created by the relevant European Union sanctions and the actions of German and Polish regulators with the aim of seizing the assets,” the Russian company said in a statement.

    Reply
  4. Macroduck

    From the policy point of view, the ECB faces the same essential circumstances as the U.S. Two big supply shocks in quick succession, goods demand substituted for services demand. The mix of details is different, of course.

    Monetary policy is obviously not the most effective tool for dealing with a natural gas shortage. That shortage is contractionary in itself, and not very responsive to rate policy. European policy makers are obviously aware of these facts. Lower core inflation relative to the U.S. suggests room for euro devaluation relative to the dollar. The ECB has already undertaken efforts to limit the impact of market interest-rate differentials between countries. Higher policy rates will exacerbate differentials.

    Reply
    1. GREGORY BOTT

      The problem is currency devaluation in a rising rate environment is a walking credit contraction. When Your currency is strong it makes domestic financial crisis liquid while higher rates enforce it creating over investment aka 96-00.

      Reply
      1. AndrewG

        LOL … I’m sorry Greg, I can’t even make fun of this properly without laughing. You really need to print this out on nice paper and frame it.

        Reply
  5. ltr

    —– comes in second in the number of people…
    —– comes in second in the number of people…
    —– comes in second in the number of people…

    [ This is false, maliciously false; definitive prejudice over and over and over. ]

    Reply
    1. Macroduck

      The UN concludes that China engages in slavery:

      https://apnews.com/article/united-nations-general-assembly-china-asia-niger-religion-cf4d7d4e9892d356b394b1cfe7b5c857

      Only India has more slaves than China. ltr continues to lie about this because she’s paid by China’s government to lie about it. Which means China lies about its practice of slavery, too. If ltr will lie about China’s practice of slavery, she’ll lie about anything. There is no reason to believe anything she posts here. The same can be said for anything that comes from China’s government and official media. Liars lie; that’s what they do.

      Reply
  6. ltr

    https://news.cgtn.com/news/2022-09-16/Beijing-s-maternal-mortality-rate-drops-to-historic-low-official-1dlR0BieFIA/index.html

    September 16, 2022

    Beijing’s maternal mortality rate drops to historic low: official

    The maternal and infant mortality rates in Beijing have both dropped to a historic low, the Beijing Municipal Health Commission said on Thursday.

    In 2021, the city’s maternal mortality rate dropped to 2.72 per 100,000 mothers, 75 percent lower than in 2012. Meanwhile, its infant mortality rate fell to 1.44 per 1,000, half what it was 10 years ago, according to the city’s health regulator.

    The World Health Organization regards a country or region’s maternal and infant mortality rates as primary indicators of the general health of the society.

    Song Li, head of the National Health Commission’s maternal and child health department, said at a press conference in May that China recorded a maternal mortality rate of 16.1 per 100,000 in 2021, and its infant mortality rate fell to 5 per 1,000, both dropping to a record low.

    Other major cities in China have also been striving to promote the safe and high-quality development of maternal and child healthcare.

    According to statistics released by Shanghai Municipal Health Commission in February, its maternal mortality rate per 100,000 people in 2021 was 1.6, and the infant mortality rate was 2.3 per 1,000.

    The maternal and infant mortality rates in Guangzhou City, the capital of south China’s Guangdong Province, in 2021 dropped to 3.57 per 100,000 and 1.65 per 1,000, respectively – the lowest since 1991, when the statistics were first recorded, the city’s health regulator said in March.

    Shanghai and Guangzhou are cities with relatively strong regional economic strength in China.

    Song said the country has made notable achievements in building healthcare mechanisms for women and children, improving related health services and ensuring equal access to these services.

    “We also see that the proportion of high risk and elder pregnant women is increasing in recent years,” Song said. “To these people, screening and assessment will be carried out throughout the whole pregnancy and perinatal period, and they will be given priority for treatment with emergency conditions.”

    The country has set up over 6,000 centers to treat critically ill pregnant women and newborns with serious diseases as of May.

    According to the country’s health regulator, people in China enjoy more equal access to maternal and child health services, and the gap between urban and rural areas in the health of women and children has been narrowed.

    Over the past decade, the ratio of the maternal mortality rate in China’s western and eastern regions has dropped from 2.1 to 1.5, and the mortality rate of children under five has decreased from 2.7 to 2.1….

    Reply
  7. ltr

    https://news.cgtn.com/news/2022-09-17/Chinese-mainland-records-140-new-confirmed-COVID-19-cases-1dot9fXeyT6/index.html

    September 17, 2022

    Chinese mainland records 140 new confirmed COVID-19 cases

    The Chinese mainland recorded 140 confirmed COVID-19 cases on Friday, with 76 attributed to local transmissions and 64 from overseas, data from the National Health Commission showed on Saturday.

    A total of 578 asymptomatic cases were also recorded on Friday, and 18,865 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 248,025, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases

    https://news.cgtn.com/news/2022-09-17/Chinese-mainland-records-140-new-confirmed-COVID-19-cases-1dot9fXeyT6/img/4498ae3e13ec49aaa5603a9d28fd8333/4498ae3e13ec49aaa5603a9d28fd8333.jpeg

    Chinese mainland new imported cases

    https://news.cgtn.com/news/2022-09-17/Chinese-mainland-records-140-new-confirmed-COVID-19-cases-1dot9fXeyT6/img/b0947e89d80942a691aff032d4631b26/b0947e89d80942a691aff032d4631b26.jpeg

    Chinese mainland new asymptomatic cases

    https://news.cgtn.com/news/2022-09-17/Chinese-mainland-records-140-new-confirmed-COVID-19-cases-1dot9fXeyT6/img/7cdb627608bd4caf8b5c7e57870e4174/7cdb627608bd4caf8b5c7e57870e4174.jpeg

    Reply
      1. Ivan

        – – Critic of US is evil anti-American prejudice
        – – Critic of US is evil anti-American prejudice
        – – Critic of US is evil anti-American prejudice

        [clap of heals]

        Reply
  8. Macroduck

    Ivan commented earlier today on the poor training of new Russian recruits headed for Ukraine. He linked to an article which reported that some recruits receive only a week of training or less. Sustainability of effort is a big deal, both in war fighting and in occupying territory. Holding territory takes more manpower than taking it.

    Russia has lost between 15,000 and 45,000 soldiers this year in Ukraine. Nearly all of Russia’s combat-ready troops were sent to Ukraine in February, so there were no ready replacements. Russian law requires four months of training before recruits are sent into combat. There are now widespread reports that new recruits receive between five and thirty days of training. Evidence on the ground in Ukraine is that four months wasn’t enough. Meat for the grinder.

    Russia has lost between 1,000 and 1,300 tanks in Ukraine so far in 2022. That 1,300 figure amounts to roughly 40% of Russia’s tanks at the beginning of this latest invasion. Rplacing those tanks will be tough under current sanctions. The U.S. has supplied Ukraine with more anti-tank weapons than there are tanks in the entire world, so tank warfare is unlikely to suddenly become Russia’s strong suit.

    Russia has lost 136 aircraft in Ukraine, out of a total of 3829. As share of the total, that isn’t nearly as bad as troops or tanks.

    We were told that Russia would never run out of munitions, that it had been stockpiling since 2014. Now Russia depends on North Korea for artillery shells..

    There is also an advantage to operating on home territory. Ukrainian sabotage operations have been effective. Today, four explosions have been reported around a factory in Kherson being used by Russian forces as a military base.

    Russia has a sustainability problem. So does Ukraine, but that’s a very different matter when fighting to defend your own home.

    Reply
    1. Ivan

      Making a bad thing worse, the Russian deployment of troops makes no sense. If you are short on soldiers, and particularly real trained soldiers, it becomes very important where they get deployed (on a 1200 mile frontline). Russia has been trying for almost 3 months to break through at Bakhmut . They have deployed substantial numbers of their real soldiers to that effort – even as other frontlines were in desperate need of reinforcement. The Ukrainian defense line near Bakhmut has been build and fortified since 2014 and Russia has barely breached its second line of defense (i spite of huge loses of soldiers and equipment). In the past month events have made the taking of Bakhmut by Russia strategic and tactically meaningless. lt would not strengthen their supply lines, defense or offense, in any meaningful way. It is almost like some Russian general has been teased that he “could not even take Bakhmut” and now he want to do it come hell or high water – just to make a point. Apparently no adult strategic minds looking at limited resources and making sure they are distributed to where they will be most effective.

      Reply
  9. Macroduck

    A read-out on Xi’s visit to Kazakhstan and Uzbekistan. The upshot is:

    “Although Xi also met Vladimir Putin, analysts say the Ukraine war has inevitably weakened Russia’s influence, leaving a vacuum for Beijing to fill.”

    https://www.scmp.com/news/china/diplomacy/article/3192809/chinese-president-xi-jinping-seeks-open-doors-central-asia

    This follows China telling Russia to stay out of Kazakhstan:

    “China warns against meddling in Kazakhstan ahead of Putin meeting”

    https://eurasianet.org/china-warns-against-meddling-in-kazakhstan-ahead-of-putin-meeting

    JohnH (aka Johnny) threw a fit about this earlier, but then, Johnny apparently works for Putin. It’s kinda funny; Pooty-Poot invaded Ukraine (repeatedly) to “Make Russia Great Again” and ends up with Finland joining NATO and China supplanting Russia in the ‘Stans. The guy is a genius.

    Reply
    1. Macroduck

      Speaking of China, there is evidence now from the the copper market that credit problems are mounting in China. China’s biggest copper trader asked the government for “liquidity help” (a bailout) in August:

      https://www.mining.com/web/chinese-copper-giant-maike-seeks-help-with-liquidity-issues/

      So far, it ain’t working:

      https://www.bloomberg.com/news/articles/2022-09-18/tycoon-running-a-quarter-of-china-s-copper-trade-is-on-the-ropes

      It’s not just copper and copper trade that are the problem. Maike is failing to make payments. Construction firms are not meeting their obligations. Mortgage borrowers are engaging in payment strikes. When payments don’t come in, payments don’t go out.

      Meanwhile, JPM has reduced credit to China’s Tsingshan metals firm; Tsingshan’s troubles sparked a brief shutdown of nickel trade back in March. JPM is cutting back credit to the metals sector generally, Tsingshan particularly.

      China’s government has cleared up some problems for domestic credit – for now, anyway – but China’s offshore credit situation remains rocky:

      https://www.bloomberg.com/graphics/china-credit-2022-09/?leadSource=uverify%20wall

      Lots of weak credit and lots of malinvestment means credit problems aren’t going away soon.

      Reply
      1. pgl

        “The trading house holds a substantial amount of the metal in Shanghai’s bonded zone, which is the center of refined copper trading in China. It acts as a gateway to the world’s top consumer of the metal, which is used to make cables that conduct electricity in everything from fridges to cars.”

        Last paragraph in your first link caught my attention. Maike Metals must be a privately held company since its financials are not publicly available which is a shame. I have done so work on the transfer pricing for BHP and Codelco who in party rely on related party marketing hubs located in tax haven Switzerland. BHP and its competitor Rio Tinto both got hammered by the Aussie tax authorities even though the marketing hub’s gross margins on sale of copper were only 3%. The tax authorities took the view that this margin should be only 2%. I wonder what margins Maike made over time but they have to be rather thin.

        Now a difference of 1% may sound small until one realizes each multinational is selling over $20 billion a year in copper.

        Reply
    2. JohnH

      The propagandists and their echo chamber here want you to believe that China is splitting with Russia and starting to see the world from the US perspective.

      They’re not: In fact, XI told Putin, “In the face of the colossal changes of our time on a global scale, unprecedented in recent history, we are ready to team up with our Russian colleagues to set an example of a responsible world power and to play a leading role in putting a rapidly changing world on the track of sustainable and positive development,” https://news.yahoo.com/xi-tells-putin-china-ready-190209465.html

      The propagandist echo chamber here shouldn’t hold their breath waiting for a Putin/XI split.

      Reply
      1. Macroduck

        Johnny, Johnny, Johnny,

        You and CoVid must be using the same playbook. Here you are, pretending that my position is something other than it is. That’s mighty dishonest, Johnny. Why do you need to resort to lies? Maybe because your position isn’t all that convincing unless you lie about others’ positions.

        Here’s what’s Act happening. China is calling the tune, and Russia has to dance to that tune. China doesn’t want a split. China wants to call the shots, to make Russia subservient. Odds are, China will get what it wants.

        China is now vastly more powerful than Russia in all but a couple of regards. Russia has more nukes and more dirty fuels. China has a far stronger economy, despite its current financial mess. China is on the way up, Russia on the way down.

        Oh, and quoting talking points is a pretty clear sign that you don’t have a clue how international relations work. Talking points are for mass consumption. You consumed them. Congratulations.

        Reply
      2. AndrewG

        “The propagandists and their echo chamber here want you to believe that China is splitting with Russia”

        Is that technically McCarthyism to you? Or is that just when we point out China’s slavery problem?

        Reply
    3. JohnH

      The Kazakh government is actually indebted to Russia for its help stifling the January color revolution.
      https://www.reuters.com/world/kazakh-leader-thanks-putin-help-during-january-unrest-2022-02-10/

      Maybe Xi was actually referring to the US threat to the Kazakh government? If Xi had a criticism of Russia, he would certainly deliver it behind closed doors.

      The propagandists here are grasping at straws, hoping and praying that the US can sanction China and then have China support US policy! Delusional!

      Reply
      1. pgl

        “Maybe Xi was actually referring to the US threat to the Kazakh government?”

        There is no such threat. BTW – you are referencing a discussion that predated Putin’s invasion of Ukraine, which likely shocked the Kazakh government. Which of course we Macroduck’s point.

        But yea – we know you celebrate every day the war crimes Putin is committing against innocent citizens. Query – does he send you pictures of women being raped by Russian soldiers so you can have a sick time enjoying the action?

        Reply
      2. JohnH

        ““We should prevent external forces from instigating a color revolution,” Xi said in a speech to the leaders of Shanghai Cooperation Organization member nations.” https://ca.finance.yahoo.com/news/chinas-xi-calls-effort-prevent-103654964.html

        Note that Xi was addressing the “external forces” fomenting color revolutions, not Russia. Let’s see…who instigates color revolutions? Oh, right! None other than Uncle Sam! But pgl, ever echoing US propaganda, insists that there is no US threat to the Kazakh government, even though there was an attempt at a color revolution there only nine months ago.

        Yet the propagandists insist that Xi was warning Russia, even though it was Russia that stepped in to shut down the attempted color revolution and assure Tokayev his position and probably his life.

        Reply
        1. Barkley Rosser

          JohnH,

          Sorry, as usual you are just spouting worthless Putin toll garbage, which you are.

          The headline report out of Samarkand was Mod of India telling Putin to his face that “This era is not for war.”

          Xi did not deliver on what he really needs, chips and other inputs to his increasingly declining war machine. And Xi went to Kazakhstan before goiong to the Shanghai Group meeting in Uzbekistan, where he supported their territorial independence, which the war criminal Putin has trheatened..

          Sorry, boy. Neither Xi nor much more Modi are supporting Putin’s losing “special military operation” in Ukraine. They both know he is a loser therr.

          Reply
        2. Barkley Rosser

          Sorry, JohnH, you are completely out of it. Putin came out of the Shanghai group meeting a complete loser. Nobody gives a bs about “color revolutions” aside from worthless scum like you who pay too much attention to RT.

          The big news out of that meeting was Modi telling Putin his war in Ukraine is wrong and should end. Xi was more discrete, but even Putin openly admitted that Xi has problems with his current utterly indefensible and now loser war in Ukraine. Oh, excuse me, so I shall not serve 15 years in a Russian jail, the “special military operation.” I apologize to all those who spout every worthless pile of drivel coming out of VV Putin, with you, JohnH, top of the bunch.

          In 1940, would you have supported Hitler over Churchill? Be honest, JohnH.

          Reply
          1. baffling

            I find it interesting that Johnh has so much to say about the atrocity of so called color revolutions, but cannot say a negative thing about the atrocities committed by Russian forces invading Ukraine. spare me the drama, comrade John. you are nothing more than a paid putin hack intent on sowing discontent in the usa.

  10. GREGORY BOTT

    Yellen wanted the feds fund rate at 325 bps in 2019. I suspect the bear trap forming is related to the coming pause. Ripping off millies who don’t know how to invest in a normal interest environment is a Gen X hand rub with crackling laughter.

    Reply
    1. pgl

      “Samsung Electronics Co. and SK Hynix Inc., both based in Korea, control roughly two thirds of the world’s memory market. Their revenues were hit in 2019 when the memory-chip industry entered a bust cycle.”

      Someone tell Johnny Know Nothing that these two giants both design and make DRAMs whereas his favorite company TSMC does not design anything as it is a contract manufacturer.

      Someone tell Johnny Know Nothing that the stock price of TSMC has also been falling.

      The semiconductor sector does have its share of volatility.

      Reply
    2. AndrewG

      True about one month’s data. Still, what an insane difference just 8 months makes. Although a crypto crash would help.

      Reply
  11. Barkley Rosser

    Indeed it is probably true that US fiscal policy in the first half of 2021 or so aggravated inflation. But that ended a long time ago, so now we have this odd business of European inflation now higher than that in the US, which does seem to be slowing despite the headlines and conservative commentary around the latest monthly report. Some of this probably is due to their greater sensitivity to the natural gas cutoff from Russia, as well as the euro declining relative to the USD.

    Reply
  12. pgl

    How did Rick Perry Mason Stryker let this happen?

    https://www.huffpost.com/entry/accounting-firm-mazars-usa-trump-financial-documents-congress_n_63267026e4b0ed021dfda2a3?ncid=engmodushpmg00000004

    Donald Trump’s former longtime accounting firm has begun turning over financial records to Congress as part of lawmakers’ investigation into the former president’s business practices, The New York Times reported Saturday. Mazars USA cut ties with Trump and his businesses in February after the firm said it could no longer stand behind financial information that had been provided by Trump and his operations. Consequently, financial statements Mazars prepared for Trump from mid-2011 to mid-2020 “should no longer be relied upon,” the company warned.

    Oh right Ricky pooh is even worse at legal matters as he is with economics or climate change. Let’s see if this arrogant clown can follow basic accounting fraud.

    Reply
  13. CoRev

    Barkley, after almost 2 years admits: “Indeed it is ?probably? true that US fiscal policy in the first half of 2021 or so aggravated inflation.”

    Ya think? Biden’s record: “2021 1.4 1.7 *2.6 4.2 5.0 5.4 5.4 5.3 5.4 6.2 6.8 7.0 4.7 2022 7.5 7.9 8.5 8.3 8.6 9.1 8.5 8.3”
    From here: https://www.usinflationcalculator.com/inflation/historical-inflation-rates/
    * Biden’s 1st full month in office.

    Unable to admit what their eyes show them, why do you even hypocritically doubt?

    Reply
    1. pgl

      My Lord – this writing is so bad one would think a retarded monkey has taken control of your keyboard. Oh wait – you are that retarded monkey. Carry on!

      Reply
    2. pgl

      2021 1.4 1.7 2.6 4.2 5.0 5.4 5.4 5.3 5.4 6.2 6.8 7.0 4.7
      2022 7.5 7.9 8.5 8.3 8.6 9.1 8.5 8.3

      You when I lazily cut and paste from CoRev’s link, I get the above, which is not elegant but at least is readable. CoRev cannot cut and paste a simple link provided by Macroduck and how he cannot cleanly cut and paste a simple table.

      Hey CoRev – now I’m thinking you are still trying to learn to use the potty.

      Reply
    3. Barkley Rosser

      CoRev,

      More bad memory on your part. This is NOT the first time I have accepted that the stimulative fiscal policy in early 2021 may have contributed to inflation. On several occasions here I made a back of the envelope estimate that it might have added up to 2 percent to US inflation, this based on US inflation being higher by that amount last year than European inflation, although, of course, now the US is doing better on the inflation front than Europe.

      You need to stop lying, CoRev, although I get that it may be that you are just really out of it and do not even know you are doing so.

      Reply
      1. baffling

        “This is NOT the first time I have accepted that the stimulative fiscal policy in early 2021 may have contributed to inflation. ”
        of course, when this was passed the greater concern was deflation. at that time, the fed wanted to have inflation at a higher rate. this was not a bug, but a feature, of the policy. this was to minimize the chance of an economic collapse and a repeat of the financial crisis.

        Reply
        1. CoRev

          There’s even another of those laughable comments. “this was not a bug, but a feature, of the policy. this was to minimize the chance of an economic collapse and a repeat of the financial crisis.”

          Sell all the voters on Biden’s feature rich economic policy. Or list the positive features of his immigration, energy, and labor policies.

          Still laughing out loud.

          Reply
  14. ltr

    https://news.cgtn.com/news/2022-09-18/Goldman-Sachs-cuts-2023-U-S-GDP-forecasts-as-rate-hikes-loom-1dqjzjVUjkI/index.html

    September 18, 2022

    Goldman Sachs cuts 2023 U.S. GDP forecasts as rate hikes loom

    Goldman Sachs cut its forecast for 2023 U.S. Gross Domestic Product (GDP) as it projects a more aggressive Federal Reserve tightening policy through the rest of this year, and sees that pushing the jobless rate higher than it previously projected.

    Goldman analysts said in a note released late Friday that it now sees GDP growth of 1.1 percent next year, down from its prior call for 1.5 percent growth from the fourth quarter of 2022 to the end of 2023.

    The Federal Reserve (Fed) is likely to raise U.S. borrowing costs faster and further than previously expected after data this week showed underlying inflation broadening out rather than cooling as expected.

    The investment bank now expects the Fed to hike policy rates by 75 basis points at its meeting next week, up from 50 basis points previously and sees another 50 bp hikes in November and December, with the Fed funds rate peaking at 4-4.25 percent by the end of the year.

    “This higher rate path combined with recent tightening in financial conditions implies a somewhat worse outlook for growth and employment next year,” Goldman analysts wrote….

    Reply
    1. CoRev

      It’s amazing what a small or approaching recession does to prices? This comment on an economics blog from a purported economist who often calls others stupid does amaze.

      Reply
  15. ltr

    —– comes in second in the number of people…
    The — concludes that —– engages in slavery…

    [ This is of course false and definitively prejudiced. Over and over and over, prejudiced attacks on 1.4 billion people. This is the sort of falseness with which European Jews were attacked, leading to the expulsion of Jews from Spain and England… and leading to attempts at their very destruction. Such is the intolerable burden of prejudice. ]

    Reply
    1. baffling

      and yet china is prejudice against the uighyers in western china. china is engaging in the genocide of an entire culture, trying to eliminate the uighyer culture from existence. your comparisons to the European Jews has some accuracy, ltr. just not the way you try to sell the narrative.

      still waiting for your apology for calling me racist ltr. i will not stay silent and let you get away with bullying, so that you may commit that crime again to others. i will stand up to you, and be proud of calling attention to your rude and bullying tactics.

      Reply
    2. AndrewG

      “the expulsion of Jews from Spain”
      … in the year 1492 …

      “and England”
      … in 1290.

      Chinese concentration camps with hundreds of thousands of Uyghurs:
      in 2022

      Chinese slavery as documented by UN slavery experts:
      in 2022

      Reply

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