CPI: Smoooooking! - Denninger - (Frankly, why do I post stuff - nobody reads it anyway - just like all of us old farts didn't pay any attention in 1974. - CL)

 The rather-ridiculous lack of vision backward, which of course is fact given that we can all read history when it comes to the "reporters" (such as in CNBC) is ridiculous.....

https://market-ticker.org/akcs-www?post=255549 

....The market is ignoring all of this but for how long?  Again I remind everyone that in 1974 we had a five month dislocation in oil out of the Middle East with the embargo and the flow-through damage didn't dissipate for eight years.  We're at nearly four months now this time around, the PPI data showed there were significant cost-push problems in January before the war started and everyone is whistling past not just the wartime impact but that which was inbound and had already happened before the first shots were fired.

This too is similar to 1974 in that there were plenty of inflationary pressures before the embargo and again people tried to ignore them -- and the result was a stagnant economy for nearly a decade.

Essentially nobody under the age of 60 remembers any of this; I was a teen at the time and came of age, entering the world of work, during the back end of it and the job environment sucked.  Today you can get a job but it won't pay the bills; then you often couldn't get one at all.

Are the two functionally different?  Not really, when you get down to it -- the late 1970s through mid 1980s, for example, featured an insane number of very well-known and respected boat manufacturers, as an example, either blowing up or being sold off for pennies and the worst of the turndown happened five years after the 1974 oil shock.

It appears that the same policy "choices" made then -- attempting to keep "liquidity" ample and continuing handouts (which are in fact armed robbery when you boil it all down to facts) -- simply hollowed out the middle class; increased deficit spending on "giveaway" programs that did not lead to actual expansion of the middle class and in fact incrementally destroyed it, and that much as with WWII ending the Depression by killing a huge number of economic competitors (humans) and destroying goods that had to be replaced the so-called "peace dividend" of the 1980s was largely responsible for that malaise ending as well rather than wise economic decisions within the government.

Are we headed for a repeat?  Given our fiscal picture today .vs. back then you better hope not because there simply is no fiscal room to continue this nor any "peace dividend" in the offing -- and the WWII-style "answer" isn't one anyone will enjoy in a world chock-full of nuclear-armed nations.