Introducing Kerry Lutz's Inflation Cafe

Your Editor and Barista 'n Chief will guide through the Inflation Maze                                                                                                                                                                                                                                                                                                                                                                                                                 February 16, 2024 | [Read Online]( Introducing Kerry Lutz's Inflation Cafe Your Editor -- Barista 'n Chief will guide through the Inflation Maze [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20The%20Inflation%20Cafe%27&body=Introducing%20Kerry%20Lutz%27s%20Inflation%20Cafe%3A%20Your%20Editor%20--%20Barista%20%27n%20Chief%20will%20guide%20through%20the%20Inflation%20Maze%0A%0Ahttps%3A%2F%2Fthe-inflation-cafe.beehiiv.com%2Fp%2Fintroducing-kerry-lutzs-inflation-cafe)   The Inflation Cafe is Born!    Last week I went to an undisclosed coffee shop in the morning and ordered my usual latté. Three minutes later the barista handed me my latte’ and I went into shock. The cup was on crooked, and when I opened it, the contents were half-full and didn’t look very appetizing.  I just sat there as I looked at my $7 receipt and realized I’d just paid that $7 for this so-called privilege, which was more than double what I was paying just a few short years ago. What that meant to me was I was getting less and paying more. But I wasn’t done. After I got my mind on the task at hand I called over the manager over to express my outrage.   I said, “You are not selling coffee in this place, you’re selling inflation.” No wonder this chain just released record earnings, I thought to myself. “You’re just an Inflation Café!”   The manager who was in his early 30’s, just shrugged his shoulders, smiled and went about his day.  Believe it or not, that’s when the concept for this newsletter hit me.   That was when the Inflation Café born. I am your personal barista giving you a guided and in-depth tour on inflation, explaining how it’s created, why it exists and providing you with ample evidence of its continued existence and how you might overcome it and make some money along the way.   Think about this. It’s not an accident that inflation happens. It’s a distinct policy that governments around the world have implemented. It is a hidden tax that gets you to work harder for a lesser reward.   As this newsletter and website progress, what we’ll do is explore the inner workings of the inflationary monster and why it will be around for decades to come.   Until you, the public is no longer willing to accept this hidden tax, which grows like a cancer, you’ll be forced to pay it. With this in mind, sit back, relax and learn.   Kerry Lutz   Editor ‘n Chief Barista — Inflation Cafe New Year Inflation Numbers Drive Stock Market To Dip In the grand narrative of economic fluctuations, the tale of inflation is akin to a rollercoaster ride that's both thrilling and unnerving. If you would, I want you to imagine stepping into this ride, expecting ‘gentle dips’ and ‘turns’, only to be met with “unexpected accelerations that scare the bejesus out of you”. This is the story that unfolded in the economic theme park, where the consumer price index (CPI), a popular measure of inflation, took investors on an unexpected turn, delivering news more disappointing than a rain-soaked day at Disney World. Let's do something different today. Let’s pivot to the story of the fictional Peterson family from Sacramento, CA, who, much like our investors, planned a budget-friendly vacation. They meticulously calculated the costs, expecting only a modest increase in expenses. However, when the hotel prices surged unexpectedly, their budget felt the pinch, mirroring the surprise investors felt with the latest CPI reading. Then there's the story of Sarah's Bakery, a small but thriving establishment. Sarah anticipated a steady rise in flour prices and adjusted her prices accordingly. Yet, when the cost of sugar also ‘spiked’ unexpectedly, her profit margins took a hit, echoing the investors' dismay at the higher-than-anticipated inflation rate. Things were as she said, Out Of Control. In January, the CPI rose 3.1% year over year, a slight decline from December's 3.4% gain but still above the 2.9% economists had forecasted. This story is just like every other story out there. This news was akin to discovering a hidden loop on the rollercoaster – exhilarating for some, but stomach-churning for others. Despite hopes pinned on the Federal Reserve's monetary policy to tame the inflation beast, (which has not happened), the CPI inflation has, for two months in a row, ‘exceeded expectations.’ The reaction was swift and sour, with the S&P 500 dipping about 1% one past January morning following the inflation update. You may already be aware of everything I’m telling you, but you need to think this through. It's a reminder of the unpredictable nature of economic forces, much like the unforeseen weather changes that can turn a picnic into a scramble for cover. This narrative isn't just about numbers and percentages; it's a vivid illustration of expectation versus reality. Those are both different animals if you know what I mean. In the economic landscape, just as in life, the unexpected twists can either derail your plans or offer an opportunity to adapt, pivot, strive and thrive. The key as we see it lies in staying nimble, being able to pivot on a minute's notice, much like the Petersons rejigging their vacation plans, or Sarah tweaking her Bakery's pricing strategy, to navigate through the ups and downs of the inflation rollercoaster. Sponsored BraVoCycles Newsletter Market Timing and Price Projections [Subscribe]( Get a free subscription to my favorite newsletter and sponsor Bravo Cycles. Published by the esteemed PHD Brana Vojcic, you’ll find out how sunspots influence economies around the globe and why there’s a 7 year agricultural cycle and much more. Just click the link above to sign up now. "Wallets Tighten as CPI Climbs: A Glimpse into Urban Economic Anxiety" Let’s talk about something hardly anyone talks about today. What’s the truest heartbeat of rising prices battering consumer budgets today? Got it? Here’s the deal. Government stats would declare the king remains Consumer Price Index from the Labor Department's number-obsessed Statistics Kingdom. Other fiery feudal lords charging the kingdom gates with rival inflation gauges be damned. Yet peering behind the royal tapestries finds the people increasingly ‘wincing’ from inflation’s blows not captured by stately indexes. For commoners know the price of trusty tunics or humble turnips at market better than any accountant. Don’t believe me? Just ask the laundress paying double for lye last month to ply her soap-making trade. Perhaps beneath cold calculating figures lies hot-blooded hardship not yet deemed noteworthy. Recall the monk Copernicus daring to shift heaven’s orbits from earth to sun in learned eyes. How soon before some equally bold thinker helps shift inflation’s attention from lofty statistics to lowly realities lived? Think about that one for a while. Why do I say that? Simple. For now the Consumer Price Index rests assuredly on its high horse as central authority over the rising cost of living. Yet if horses had humble eyes or ears, they too may question just how reliably this particular steed still trots in stride with the people it’s meant to serve since wartime beginnings. Before one too many consumers whisper “Let them eat indexes” while bartering breadwinners’ sweat for their families’ supper. Inflation cooled last month, but some price hikes continue to cause pain Here’s a story to make this easy for you to comprehend. My weary eyes strain squinting at screens’ sterile glow while slumber escapes yet again… what keeps economy watchers up “fixated on inflation fine print” as common folks slumber? Great question. The latest Consumer Price Index dispatch declares the raging inferno of 2022’s price hikes now contained to a smolder barely scorching wallets. Do I believe that? Not really, but it makes for great copy. Here’s how they tell it. It’s just a gentle 3.1% national sunburn they say, so why furrowed brows in midnight’s shadowy solace? Perhaps because bureaucratic broad strokes brush over the blistering patches still flaring across everyday lives. Examples: Soybean oil up 25%, eggs 43% dearer, even eating out a scalding 5% hotter year-over-year while statisticians cheer “cooling” trends. Cold comfort for family grocery budgets blistering if you haven’t noticed. I go to the grocery store, spend $100 and walk out with maybe two bags and that’s about it. And don’t discount the psychological tax behind each price tag’s tallying tragedy. Exhausted earners realize January’s reprieve rests atop 2022’s towering inferno now solidified into their financial bedrock. Adding lean 3% inflational kindling feels no less fiery for those foundations already charred. It just feels bad, that’s all. In dawn’s early light, Americans arising to hustle through workaday survival know simmering CPIs boil down to the bacon now sizzling pricier on their own breakfast plates. While economical emperors toast relatively easing stats from penthouse window views, 9-to-5 warriors wages haven’t budged to match reality down on the working battle’s front lines. I don’t know about you, but gas prices, electricity and even trash aren’t what they used to be. Know what I mean? Before exhaustion overtakes yet again, perhaps we insomniac observers, the people that read newsletters like this one should advocate average citizen relief on par with celebrating indicator artifacts. Get this. The truest economic barometer was never bureaucratic. Nope. Never. It’s the pulse of those working tirelessly to afford life’s simple pleasures before time and wages run dry. Stay tuned because we’ll have some juicy information coming up that you won’t get anywhere else. Inflation's Grip Tightens: Expectations vs. Reality Across the U.S. You’ll definitely want to read this one. Don’t worry about the spelling. I just want you to grasp the context of what I’m telling you today in this short post in the Inflation Cafe’ Newsletter. In a surprising twist, inflation defied economists' predictions, refusing to simmer down to the anticipated 0.2% monthly and 2.9% yearly rates. I think it’s a runaway train so to speak, so don’t be surprised if it’s a few months before it settles down. Instead, guess what happened? The relentless surge of the Consumer Price Index (CPI) has painted a stark picture, maintaining a 3% or higher increase for an unprecedented 34 consecutive months — a scenario not witnessed since the tumultuous economic waves of the late 1980s and early 1990s. What’s that tell you is coming? While some may argue that fixating on a 3% benchmark is arbitrary, it's a critical threshold for gauging economic health, offering a semblance of hope for visible improvement. "It's how we quantify progress," notes economist Frick, underscoring the psychological battle waged alongside the economic one. Despite the stark figures, optimism was voiced by Treasury Secretary Janet Yellen in a recent Pittsburgh address. Declaring the January CPI report as a beacon of "significant progress," Yellen highlighted the triumphant easing of inflation from its zenith — a reduction by two-thirds, she proclaimed. The fall in essential household costs, including gas, eggs, and airline fares, signals a turning tide, with CPI inflation retreating 6 percentage points from its peak. I’ve seen gas go up and stay up and then dip for a week or two and that price seems acceptable after seeing it reach highs of $6.79/gallon in some areas of California like La Jolla. Yet, as Americans navigate this inflationary labyrinth, that is creating horrible results from D.C The reality on the ground tells a story of resilience and adaptability in the face of persistent economic challenges. Sure we can adapt, but do we want to continue to adapt and just keep paying more and more every year, without getting a cost of living raise in our income so to speak. Update your email preferences or unsubscribe [here]( © 2024 The Inflation Cafe' 5500 Military Trail, Suite 22-307 Jupiter, FL 33458, United States of America