Consumer prices recorded a stunning increase for the month of October.
Rising a huge .9% just for the month alone. And 6.2% for the past 12 months. It is the fastest pace in over 30 years.
And I have to say, that last month's results really, really undercut the idea that inflation is temporary or transitory or whatever excuse the federal reserve is making. By the way, if you look under the hood of the report, energy was up nearly 5% for the month, and 30% for the last year. I'm going to come back to that story in a moment.
Art Laffer makes an important point, that the CPI seems to be following the PPI - which is producer or in the old days we called it wholesale price index.
PPI is now up 8.6% in the past year.
But Art's point is that when the two indexes are moving up in tandem, that strongly suggests a deep-rooted inflation problem. Sometimes, producer prices jump but they're not passed on to consumers.
Now, it seems, business price hikes are being taken by consumers. And you know what that suggests? There is so much excess money creation from our central bank, that at least in the meantime, these price hikes are sticking.
I know there are shortages, supply chain problems, Thanksgiving turkey is going to be way too expensive this year, but the reality is prices are rising and people are still buying.
Now, look. There are no geniuses in crystal ball forecasting, but numbers like today really strongly suggest we have too much money chasing too few goods.
And inflation is becoming imbedded in our economy. And that suggests it may well be higher and longer than a whole lot of people - including myself - might have thought 5 or 6 months ago.
As I often say, put aside the politics. Just look at the numbers. And they are not good. This story goes beyond pandemic related supply chain problems.
Now, the White House with it's usually penetrating analysis blames price gouging from oil companies and presumably gas stations. This is an exceedingly stupid response.
If this were remotely true, you'd have to have price gouging in: energy, food, shelter, transportation, medical care, sporting events, postage stamps, recreation, used cars, new cars, car and truck rentals, and hotels. Now, that's one hell of a conspiratorial price gouging campaign. You know, Mr. President, even paranoids have real enemies.
Now, a much better response came from Senator Joe Manchin. Who suggests that congress needs to put the monstrous Biden social spending plan on hold until inflation slows.
And I quote "by all accounts the threat posed by record inflation to the American people is not transitory and is getting worse." Manchin tweeted today. "From the grocery store to the gas pump, Americans know the inflation tax is real."
In other words, stop the spending. Stop the money printing presses. Save America. Kill the Bill. Mr. Manchin wants to pause the bill. And I'm fine with that. Because as Americans take a sober look at this inflation story, opposition to all this federal spending stimulus will grow even larger than it is already now. Last point. A big chunk of this inflation story is energy.
World oil prices up from $53 at the Biden inauguration to $83 now.
Gasoline up 60% from $2.15 to $3.42 today. You know what, Mr. President?
There is a solution to this particular problem. It's called drill, drill, drill. Produce, produce, produce. American energy independence. Quit whining to the Saudis and Russians, and stop choking off supply by ending pipelines, leasing on federal lands, ANWAR, and so forth. You're 2 million barrels a day short from the pre-pandemic Trump peak. They're not producing, because they know you're going to regulate and tax them to death.
How about telling your so-called climate czar John Kerry to stop making ridiculous assertions that there will be no coal in 2030. When everyone knows we have at least 100 years of coal reserves. And private industry is developing clean coal technologies.
Or, stop Kerry from the ridiculous assertion that we'll be carbon free by 2035.
No serious climate or energy analyst believes anything remotely like that. And what's more, if we ever did that, with some kind of Soviet style command, the entire economy would implode. So, to wind up, how about this: produce more, not less energy. Of all kinds. Slash taxes and regulations instead of raising them. And stop federal spending and the central bank's money printing.
By the way, that's what Ronald Reagan did 40 years ago, and within a year inflation evaporated and American economic engines moved into high gear. you know what I'm going to say folks: Save America. Kill the Bill.
This article is adapted from Larry Kudlow's opening commentary on the November 10, 2021 edition of "Kudlow."