Predictions and thoughts on the Biden Presidency

[LetterRip]

Grant,

don't have tons of time for Ornery right now - (holidays with family + my book on disease is approaching completition),

Note these are for new cars, not older cars, which with a lessening in new cars should probably also see some demand pickup.  But it's all rather superficial.

The shortage of new cars has driven drastic increase in used car prices, but there is also a 'used car drought'

“The continued chip shortage on the new-car side and the ‘perfect drought’ in supply on the used-car side are the main reasons for this,” he said in a report that was posted online Sept. 28.

Wholesale used-vehicle prices in August averaged $14,712 — up 3.2% compared to July, and up 9.0% vs. August 2020. To provide some perspective, prices were up 30.8% compared with pre-Covid/August 2019.

By a perfect drought in used-vehicle supply, Kontos refers to a relative scarcity of off-lease returns, repossessions, and customer trade-ins — three leading sources of inventory for the wholesale auction industry.

https://www.forbes.com/sites/jimhenry/2021/09/29/used-car-auction-prices-head-higher-again-computer-chip-shortage-shares-the-blame/

https://www.hotcars.com/heres-how-the-global-chip-shortage-has-benefited-the-used-car-market/

He confirms what you wrote earlier about the prices of lumber, but still doesn't answer the question about how demand jumped in 2020.  There is some talk about running to Home Depot for do it yourself projects and millennials hitting homebuying years, but that doesn't explain where all the money come from while sawmills thought there was going to be a housing crash.

People weren't spending near as much of their income on going to bars, going out to restaurants, on coffee and donuts, on commuting, etc. They suddenly had significant disposable income that was previously allocated on entertainment and work related expenses.

[LetterRip]

So lets see what Rattnar says,

The prices of many commodities are surging — copper and lumber because of a jump in home building. Global steel demand has pushed up iron ore prices. Even tin, heavily used in electronics, has soared as suppliers rush to meet consumer demand for new gadgets.

We already covered lumber.

Copper - there is an artificial shortage that was caused by shipping disruption,

https://www.eatmy.news/2021/07/the-artificial-shortage-of-copper.html

Also severe underinvestment, limiting supply of copper and there is some increased demand for 'green initiatives'

https://www.cnbc.com/2021/06/17/copper-prices-rise-amid-green-sustainable-initiatives.html

Iron ore had a brief surge based on speculation on China demand (some thought China would significantly exceed prior year production, but without there being an increased supply of ore - thus speculators bid up the price expecting a shortage) and is rapidly returning to normal.

https://markets.businessinsider.com/commodities/iron-ore-price

Tin,

amid tight supplies and strong demand for the metal in the environmental and sustainability landscape, particularly in photovoltaic installations, electric vehicles, and electronics. China, the top producer, closed a land port with the biggest importer Myanmar on the back of surging COVID cases. Meanwhile, inventories at both LME exchange and ShFe hovered near multi-year lows. .

https://tradingeconomics.com/commodity/tin

Over the medium term, growing demand from the electronics industry and increasing housing construction activities in emerging economies of Asia-Pacific are driving the growth of the tin market.
Miniaturization of electronic products and the availability of substitutes like aluminum and tin-free steel for the production of metallic products like containers, etc., are hindering the market's growth.
New cheap tin-aluminum alloy in lithium-ion batteries, shifting focus toward the recycling of tin, and recovery in secondary refined tin output are likely to create opportunities for the market in the coming years.
The Asia-Pacific region is expected to dominate the market and is also likely to witness the highest CAGR during the forecast period.

https://www.mordorintelligence.com/industry-reports/tin-market

So - basically nothing at all to do with Biden or US stimulus.

[Grant]

Grant,
don't have tons of time for Ornery right now - (holidays with family + my book on disease is approaching completition),

LOL.  You're under no obligation.  Good for you.  Have a healthy life away from arguing with strangers on the internet.  I should be leaving for home tomorrow if the helicopter gets fixed.  I will do my regular disappearing act because I too have better things to do at home.  I may be back in two weeks.  I may be back in two months.  I may never be back at all.  Have a good Thanksgiving. 

So - basically nothing at all to do with Biden or US stimulus.

You keep bringing knives to a gunfight.  You're bringing articles on single commodities that are talking about supply chain problems but you are not bringing any articles from economists about the economy or about government spending.  They are out there.  Though Krugman is going to be the easiest to grab and he's not well received. 

[TheDrake]

None of those economists seem to have hard data.

This paper did.

Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero.

Does our finding, by itself, imply that countercyclical government spending is ineffective at boosting output? Not necessarily. Our paper simply demonstrates that the inflation channel of government spending is not an empirically important way that this spending might affect the economy.

In a debate from nearly 50 years ago, economist Milton Friedman characterized the then-current state of economists' understanding about fiscal policies' effect on inflation: "Surely, I think the time has come to utter the usual poker challenge to those who maintain that fiscal effects are important for inflation and the price level. It seems to me that it is time they put up and give us some evidence to support the repeated assertions to that effect."3

Until recently, Friedman's quote has remained pretty accurate. Why have economists had little to say empirically about the effect of government spending on inflation? I studied this question in a recently published paper co-authored with Rong Li of Renmin University of China.4

There are two high hurdles to answering this question that only a few papers have been able to overcome:

Finding episodes in which one can be confident that the central bank is not working to offset the potentially inflationary effects of fiscal policy

Experiencing exogenous changes in government spending over time to construct so-called natural experiments to assess the spending's effect on inflation

[TheDeamon]

Speak to any company and they'll tell you their costs go up and up on anything at all, and they have to either raise prices or else cut corners on product (usually switching to a cheaper distributor with a worse product). You see it in anything ranging from electronics to food items. So how can this be? It cannot be the case that all natural resources in the world have become scarce simultaneously. But all prices steadily go up each year.

Oversimplifying, couldn't this just mean that population growth means ever increasing demand? Primarily as it relates to real estate. They ain't makin more land, as they say. Same thing mostly with fuel, but that market is heavily manipulated as well. Food? yep, same thing. Production lags, resulting in price rises.

The Real Estate markets in the anglosphere are weird right now. Covid19 has caused a huge movement of people from the largest urban centers in the their nations to more rural areas. Rural areas that don't have construction capabilities able to keep pace with the new demand. Some of the urban movers are keeping their initial urban home, which means their new rural residence needs furnished.. Which means a spike in demand for household goods. And the shortage in housing means builders are requesting building materials at unusually high levels, which in turn runs up against lumber yards which had partially shut down due to Covid19 as well. Even more supply shortfalls.

Meanwhile, for the urbanites who did sell, their properties are either being bought up by foreign investors(China being the main offender) seeking safe havens for their money (European, and in particular "anglo-sphere" nations, are historically very stable in comparison to everyone else) where they tend to buy in at the so called "international gateway" cities.. Which keeps housing prices high in those markets, and gives the sellers a lot of money to plow into new home purchases in more rural areas, which feeds us right back into the problem of supply outpacing demand. It isn't just foreign investors though, many VC firms are buying up American real-estate in general as well, and probably in a few other developed nations as well. In either case, it means demand is well ahead of supply.

[cherrypoptart]

Time for an update?

Well if anyone predicted Biden would shut down the virus, that didn't happen. I didn't see anyone predicting he would lose Afghanistan to the Taliban either.

I did see autocratic unconstitutional rule though and that one has been proven with the OSHA vaccine mandate that was struck down by the Supreme Court.

I didn't see high inflation or supply chain issues or our energy independence given away as our pipelines are blocked while Russia's are supported instead.

The riots have stopped. I'm not sure if anyone predicted it but it was predictable that the Democrat supported anti-Trump riots masquerading as other things would stop if Trump lost.

Here's some fun Biden quotes just for giggles. Hearing this guy over the course of his career it makes perfect sense why our country is in the terrible shape it is and going downhill fast. I like the first one about Clarence Thomas as he makes his priorities for his choice on the Supreme Court perfectly clear. I don't agree with much of Biden's agenda but in reading and re-reading some of these I have to admit he can amuse.

----------------------------------------------------------------

I think the only reason Clarence Thomas is on the court is because he is black

No Ordinary American Cares About Their Constitutional Rights

The next person that tells me I'm not religious, I'm going to shove my rosary beads up their ***.

Thus, in setting an American agenda for a New World Order, we must begin with a profound alteration in traditional thought.
 
When you're appealing to people's fears and anxieties, you can make some gains.

I never had an interest in being a mayor ’cause that’s a real job. You have to produce. That’s why I was able to be a senator for 36 years.

I worked at an all-black swimming pool in the east side of Wilmington, I was involved in what the Negroes, I mean, blacks were thinking, what they were feeling.
 
Every single morning since I've been 27 years old, I've got up and someone's handed me a card like the one I have in my pocket with the schedule on it, of all the things I'm gonna do. I don't know what to do if I didn't have that card.

It's easy being vice president - you don't have to do anything.

I mean, you got the first mainstream African-American who is articulate and bright and clean and a nice-looking guy. I mean, that's a storybook, man.
 
Make sure of two things. Be careful - microphones are always hot, and understand that in Washington, D.C., a gaffe is when you tell the truth. So, be careful.

I did not grope the wife of Defense Secretary Ashton Carter or the daughter of Sen. Christopher Coons. I don't put drugs in drinks or give drinks to underage females. And all those photos about me inappropriately touching girls, they are blown-up.

There's never been A day in the last four years I've been proud to be his Vice President. Not a single day.

I get a lot of credit I don't deserve.
 
Guess what, the cheerleaders in college are the best athletes in college. You think, I'm joking, they're almost all gymnasts, the stuff they do on hard wood, it blows my mind.

President Clinton bankrupted Chrysler so that Italians could buy it to ship jobs overseas to China.

Well, you know, my shotgun will do better for you than your AR-15, because you want to keep someone away from your house, just fire the shotgun through the door.

I may be Irish, but I'm not stupid.

For too long in this society, we have celebrated unrestrained individualism over common community.

The number one job facing the middle class. And it happens to be, as Barack says, a three-letter word: Jobs. J-O-B-S.
 
Almost every great innovation was [created] by government.

The reason I'm a Democrat is because the essence of the Democratic Party is an abhorrence for the abuse of power on the one hand, and the notion that everyone's entitled to be treated with dignity. That message never got through.


Folks, I can tell you I've known eight presidents, three of them intimately.

I once said, "You cannot go to a 7-Eleven or a Dunkin' Donuts unless you have a slight Indian accent." When Bobby Jindal entered the Republican campaign, my comment should have been covered again, more prominently. I mean, Jindal is not Native American, he's a real Indian.

My recollection is - and I'd have to confirm this - but I don't recall paying any money to go to law school.

In presidential campaign I released a 65-page file from the Syracuse University College of Law that showed poor grades, back in college, also. If I were plagiarizing consistently, my grades would have been better.

The more people learn about them (Obama and Hillary) and how they handle the pressure, the more their support will evaporate.

Don't tell me what you value. Show me your budget and I'll tell you what you value.

I believe the American people have a genuine and justifiable fear of government intrusion in what they instinctively know is going to be an ever more intrusive world.

Al Gore invented the Internet.

I was kind of secretly hoping one of my kids would go out and make a million bucks. So when they put me in a home, at least I'll have a window with a view.

What I was saying is that Israel cannot count on the United States.

I've learned a long time ago, you don't say anything for absolutely certain.
 
My great grandfather, Raj, was from Punjab, India. My grandmother graduated Rajasthan University.

If I hear one more Republican tell me about balancing the budget, I am going to strangle them.

Now that I'm not running, I can appear on Fox. Let the cabinet members do the low-ratings shows on MSNBC.

I am a Zionist. You don't have to be a Jew to be a Zionist.

You know, the eleven million people living in the shadows, I believe, they're already American citizens... These people are just waiting, waiting for a chance to contribute fully. And by that standard alone eleven million undocumented aliens are already Americans in my view.

In the good old days when I was a senator, I was my own man.

Hillary Clinton, income inequality, it's richest damn woman next to the Kennedy family, and you're trying to tell me she cares about income inequality?

What's four years in our long American history? Remember when I asked that wheelchair-bound politician to "stand up." It turns me off when people say Donald Trump is authentic. Just because he says "Mexican rapists." What about me? I am the real deal.

Some of my best friends are Jewish contributors to the Democratic Party.

Remember, no one decides who they're going to vote for based on the vice president. I mean that literally.

I did not know at the time, but what I did at that swimming pool [on the east side of Wilmington] paved the way for Barack Obama.

There's no reason the nation of Africa cannot and should not join the ranks of the world's most prosperous nations in the near term, in the decades ahead. There is simply no reason.

Do not tell me your values​​. Just give me pocket money, I would say how much you are worth

Joe Biden quote: We must rekindle the fire of idealism in our society, for nothing suffocates...
We must rekindle the fire of idealism in our society, for nothing suffocates the promise of America more than unbounded cynicism and indifference.

Well, I thought the deal was, when you went to work for the government you weren't supposed to make money!

Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive.
 
Wealthy people are just as patriotic as poor people, I honest to God believe that.

Look, guys, no matter what a girl does, no matter how she's dressed, no matter how much she's had to drink, it's never, never, never, never, never OK to touch her without her consent. This doesn't make you a man. It makes you a coward.

If we do everything right, if we do it with absolute certainty, there's still a 30% chance we're going to get it wrong.

The greatest gift is the ability to forget - to forget the bad things and focus on the good.

I exaggerate when I’m angry, but I’ve never gone around telling people things that aren’t true about me.

Somalis have made my city of Wilmington, Delaware, [their home] on a smaller scale. There is a large, very identifiable Somali community, i might add if you ever come to the train station with me you'll notice I have great relationships with them because there's an awful lot driving cabs and are friends of mine. For real. I'm not being solicitous. I'm being serious.

This Administration [of Barack Obama] favors a pluralistic world and respects cultural differences, so it's wrong for the West and American elitists to judge how women are treated under Sharia. I'm going too long on all this, but I choke up on the President's legacy of reaching out to the Muslim world. It's an emotional thing.

The civil rights movement did more to free the white man that the black man. ... It freed my soul.

It (Boston Bombings) was worth it to hear you(survivor speakers) speak.

I got tested for AIDS. I know Barack got tested for AIDS. There's no shame in being tested for AIDS.
Joe Biden

A gaffe in Washington is someone telling the truth, and telling the truth has never hurt me.


I wouldn’t go anywhere in confined spaces now. When one person sneezes it goes all the way through the aircraft. That’s me. I would not be, at this point, if they had another way of transportation, suggesting they ride the subway.

If you need more than 10 rounds to hunt, and some argue they hunt with that many rounds, you shouldn't be hunting. If you can't get the deer in 3 shots, you shouldn't be hunting. You are an embarrassment.

Just talk to me as a father ... not what the Constitution says. What do you feel?


And since our country's founding, we've tried to keep government's heavy hand out of our personal lives, while ensuring that we do the most important thing, which is to protect those who cannot protect themselves.

Based on my own experiences, I made sure, and I'm proud of this, that the Common Core curriculum is hard on plagiarizers.

I am a Catholic. I can't say that without pointing out that I oppose abortion with all my heart and soul. Bill Clinton wanted them safe and rare. Barack Obama is heartsick that so many people he knows have had abortions. But we're all pro-choice and believe in reproductive freedom and oppose the Republicans' War on Women.


https://www.azquotes.com/author/1383-Joe_Biden

[Fenring]

We have inflation in the US for

1) Housing - housing in 'good neighborhoods' has extreme absolute scarcity, and population growth means there will be steady inflationary housing pressure in those places with population growth
2) Medical Care - absolute scarcity and consumption - as people live longer and are less likely to die of diseases which kill them rapidly, they have drastically greater chronic disease burden, but the supply of physicians has only modestly increased.  Since medicine is life saving (consumers don't really have an option of not consuming) enormous monopoly rents can be extracted.
3) Education - absolute scarcity and change in colleges - colleges historically viewed their mandate first as education; now many view profit maximization. 'good schools' have absolute scarcity - so many schools have dramatically increased prices to what the market will bear.  Universities have a monopoly in mandatory accreditation for many professions, so there is again absolute scarcity.  We also have drastic reduction of per capita funding to colleges and universities.  Many universities and colleges were 'land grant' based, most new ones are not, so they don't have the funds from the land grants and have a floor on pricing - and those with land grants will increase prices to match.

Oil prices vary drastically and that drives most of the rest of inflation - these are driven by oligopoly price manipulation resulting in absolute scarcity.

Was reminded of this conversation by an article I just came across:

https://www.cnbc.com/amp/2022/03/21/powell-says-inflation-is-much-too-high-and-the-fed-will-take-necessary-steps-to-address.html

Reiterating a position the Federal Open Market Committee made Wednesday in its post-meeting statement, Powell said interest rate hikes would continue until inflation is under control. He said the increases could be even higher if necessary than the quarter-percentage point move approved at the meeting.

[...]

"In normal times, when employment and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks," he said. "However, the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher, which underscores the need for the Committee to move expeditiously as I have described."

What Powell is describing is the effect of not only supply/demand constraints on inflation, but also on monetary policy vis a vis the policies of the Fed and the banking system in general. As soon as we admit into the discourse that the Fed can affect, or even optimistically control, the rate of inflation using a simple set of levers (none of which are related to the available supply of goods and services) it should become clear to anyone that either (a) all Fed boards going back decades are so deluded about economic function that they may as well be reading tarot cards, or (b) that influences on credit and the money supply are so significant to economic movement that we might well wonder why a 'private' board such as this should have such power at their disposal. Putting aside the pro/con issue about the central bank, it would require a radical rejection of modern economic theory to posit that market demand and scarcity are the only degrees of freedom necessary to explain inflation. I would never suggest they are not relevant to it, but IMO they do not explain many frustrating realities, such as for instance why even products whose production capacity is essentially infinite could ever continue to inflate, why increasing technology is still rendering even old tech items more and more expensive to purchase, and why (as business people are aware) they must continually raise prices purely as a result of everyone else in the supply chain raising prices (the upward price spiral).