of a lot easier to create demand than it is to bring supply up to snuff. so we'll go over some of the details on these rates, but they're pretty shocking. right? yeah, that's a good comment by. well, rector, about demand, you know, that was spoken about in keynesian economics corners that they need to stimulate demand by printing money. but we live in an age now where the supply side of the equation is broken. so we're entering into the supply shocks, whether it could be micro chips, for example, or basic commodities are up sharply. there's a food insecurity now by hundreds of millions of people around the world just emerging over the past 12 months because of this runaway inflation because of the runaway money printing, as we've been saying for a few years. so now people are really coming to grips with the fact that yeah, kaiser reports been right about it. what's next?

right, so we'll go over some of the data, the important one to look at there in terms of the container. freight rates is from shanghai to los angeles. and so think about this. everybody got a lot of stimulus jacks. we covered this to thousands and thousands of dollars of over the past year, a year and 2 months. and what they did is they bought durable goods, they bought refrigerators, they bought washing machines. and where did it all come from? it came from china. so this is the most important one for this coven lockdown story in the supply shortages and rates spiking. average port to port spot rate from shanghai to los angeles swords from around $1500.00 per 40 foot container in early 2020. and from a 5 year average of $2177.00 to $4000.00 in september of 2020 to $8000.00 in june of 2021. and

9631 and the week ending july. 8th. according to drury supply chain advisors, this would be an increase of over 500 percent from early 2020. they say there's 2 things that we're gonna for the last 20 years, number one, money printing. number 2, china enters global economy and all that money printing went over to china along with american jobs. but the american consumer did notice that because the price of stuff coming in from china, like those white goods, the washer dryers, the tv screen, the clothes was dropping precipitously, lot cheaper. well, at some point, you know, as you pour water into a bucket, at some point the bucket has fall and then the water starts to spill over. so here we have a situation where all the g cheap gains that have accrued due to,

including china in to the world trade organization under bill clinton have exhausted themselves. so all of money printing like that water into the bucket is now spilling over, has real inflation. but i think the reason this is caught people off guard is that it took 2025 years to fill that bucket. because bringing china on as bill clinton did was really a remarkable situation of putting half a 1000000000 workers making virtual slave labor into this globalized economy that was all hooked up to the internet. and we just had an amazing crash in the logistics prices and delivery prices. and remember, it was only 2 or 3 years ago we were saying the price of these containers, the baltic dry index. if you recall on this very show 2 years ago, 3 years ago, we would all say, oh my god is sitting new crash lowes. it's so low, it's low, but now it's all when essentially equalized or normalized. so the money printing is

not going to hurt really badly the past 20 years. why? part of the reason why it didn't catch up was that there was a lot of money printing, but it was all credit. it came from the central bank cutting rates ever lower, taking those assets off the balance sheets of the banks and putting it on to the central banks balance sheet. the past year we've seen thousands and thousands of dollars sent to every single individual american. we saw those p p, p, forgivable loans, tens of billions of dollars given to small businesses. this is real money. it's filtered straight into the economy and without a commensurate, of course goods and services being provided here. so that's why you're starting to see the inflation because everybody's spending it, but the only place to spend it is in china and the volume is quite remarkable. so what you see is the port of los angeles has been sending records in terms of the volume of imported loaded containers. the container volume is expressed in this

standard, measuring unit of t, e, you or staff for 20, for the equivalent unit where a 40 foot container contains 2 to use for the 5 months from january through may the port imported 2370000 t u and loaded containers according to data from the port of los angeles. this was up from 26 percent from the prior record period of january through may of 2017. so it's a, it's that a new record, high by 26 percent of the previous record high. you can see the parabolic move, it all started. exactly. all of this data started exactly once. the 1st stimulus checks started to pour into american coffers, so it is causing some inflation is causing some friction as well. because of course, you're starting to see headlines suggesting that as china, that's causing inflation or you see signs that as big coined cause and hyperinflation, right? interesting, those to bring brought up in the context of look,

china's g d p is up like 18 percent and the u. s. is barely positive. and big. why? because china is trying to grow their economy. you know, if you're trying to grow your economy based on manufacturing stuff and selling it, you're going to end up with people working manufacturing stuff and selling it. if you have an economy based on social justice warriors who are begging for more stimulus, jack, so they can give it all to china. your g d p is not going to go up because you're not manufacturing stuff to sell to chinese people or anywhere else in the world where you're definitely going to see. i mean, because we haven't seen this and our entire adult lifetimes. we have this in our childhood of the inflation and it causes a lot of friction that causes and because you have your flush of money, you're getting a lot of money put in your bank account. you can't deny that there was a tens of thousands of dollars put into average household savings accounts and

they're feeling good and they want to go out and spend it. the problem with everybody else feels the same and everybody else is doing the same. and there's only so many goods and services for people to buy. so you're also seeing that in the next line about how much rent inflation is going up and rent is an important component of the cpi index. right? well, red prices are storing as americans flock back to cities. nationwide, red prices are up 7 and a half percent. so far this year to date 2021. 3 times higher than normal. according to data from apartments dot com analyst expect rent price is to keep climbing for the foreseeable future. a major burden for renters and a warning find that higher inflation could linger far longer than the white house and federal reserve keep predicting. right, you know the old, the p and shell, a game. we have a p and you have 3 shells, then you know, like, oh it,

where's the p? where's the p? well, they bureau of labor statistics in washington dc. if i'm playing this game for 40 years, 50 years, where every year, every 2 years, they have a new definition of how to calculate inflation, right? they substitute hamburger for stake. they say a computer is twice as fast, so it's half as cheap. they substitute ran for houses, but eventually, instead of having $1.00 pay to play with in the shall game, it's now 3 pays. and every single show you turnover is inflation and inflation. and guess why inflation? so all those he donica jasmines and all that gamesmanship that's been going on to help the federal reserve keep rates low. so that the investment bankers and the private equity firms, i've cheapest possible money to buy other companies for virtually nothing as come to an abrupt and in the form of people starving. so now the equation is really

cruel, because for every new billionaire you can make a direct link to x number of starving people for stop. so yet in the united states, a lot of people have, like i said, over $10000.00 in their savings account, they haven't spent it in the past year. they're ready to start spending it. they want to, they're like, hey, i have 10000. that's enough for a deposit to move to a new town to move to a new city start again. so flush with cash. well everybody's doing the same exact thing and they're all heading to the cities like boise idaho. they're heading to sacramento to other like smaller cities, not new york, not san francisco, and you're seeing the rents or you're seeing and phoenix this headline here from this quote here. jason is yuru owner for 10 real estate in phoenix that he has managed rentals for nearly 15 years and never seen anything like this. his rental

listings are often getting more than a dozen applications. people call him and offer to pay more than the asking price for the rental. effectively creating bidding wars on rental properties on to recent listings. so many people offered to pay more money that he had. all the applicants write down their best offer. right? notices about renting and not buying. because one of the fallout from the carbon crisis has been the private equity groups like warren buffet and others buying thousands of hundreds of thousands of properties and putting them out of reach for buyers. and now they're only recourse is to rent, and now we're seeing rants rise, but of course they can't afford to buy houses anymore. so you end up with essentially, what would be com, a hut on the company store on the consumer plantation known as america. right, well, you're going to be talking to,

we're hackerman who believes deflation is the biggest story. but that, i don't think it's a consolation at the end of the day is like, you could say, hey, you know, the good news is there's 5 trillion or quadrillion and bad debts over here. and that's to felicia barry. it's going to cause a economic crisis. but your rent is still going out, your health care is going up. freight costs are still going up your all your goods and services are going up and price. at the end of the day, i really want to know what rick and when i say about all this, don't go away much more coming your way. the me, when i see black and i seen myself when i was growing up like america spoke to me. when, why destroyed you did not. you said black lives matter is a movement we are importing from america. no, nothing is we. i lived in a world where the wife lives mattered,

and i was know why the like mission. and i wasn't norm from black america. i learned how to speak back to what i bridge people were at the police were at war with statistics. i'm scared that my children are going to grow up in the country. that thing says no racism, but they're more likely to end up in the criminal justice system than their other fellow friends in daycare. i want to make sure, you know, board is under my number please. and you as emerge. we don't have authority. we don't actually the whole world needs to take action and be ready. people are just, you know,

crisis we can do better, we should be better. everyone is contributing each in their own way, but we also know that this crisis will not go on forever. the challenge is to response has been massive. so many good people are helping us. it makes us feel very proud that we are together in the me. welcome back to the kaiser report. i my guys are time now to return to the legendary rick ackerman of ricks pix rick. welcome back. thanks much for inviting me on macs. i'm looking at today's new york post the front page. huge headline, the incredible shrinking dollar,

talking about inflation, talking about prices skyrocketing. so let's talk about this inflation versus deflation debate. yet again. first of all, why does so many people don't seem to understand these 2 words. inflation versus deflation. why? why is there such confusion? isn't obvious cation for a purpose, for our people, just mass massively ignorant on the topic. why? why do we always have trouble with these 2 words? i think because you symptomatic lee have both things going on at the same time sometimes, but also, you know, the monetary is sort of set the agenda for inflation. they said that inflation was simply an increase in the supply of money. but i would submit that there are so many fungible forms of money anymore that you really can't measure it. you know, i, i always suggested you look at inflation or deflation in terms of the chief symptom,

which is for deflation. it's an increase in the real burden of debt, meaning that whatever you owe is going to be paid back in dollars that are increasingly deer. and of course, inflation is an opportunity for borrowers to pay back what they owe in cheap in dollars. so i think if you want to understand inflation deflation, just ask yourself for one, what's, what is my mortgage burden gotten harder or later? ok. so you're saying a couple things that are, 1st of all, they just, the supply of money is not necessarily a good gauge when you're talking about our place, because there are so many different types of money. now it's that day it's impossible to totally get a handle on this. and $11.00 index that seems to be really the tell tale and backs would be the dollar. so the dollar is showing a lot of strength recently. and so that plays into the deflation theme and

but nevertheless, you've got c, p 5.4 percent ramps up 7.5 percent. freight container rates are up 500 percent. and to get back to what you were saying there, you got 2 things going on. at the same time, they've got destruction and the capital markets or destruction and the bond markets, that's deflation. but you've got all this money supply. what am i, the average person out there? mean the average person they're experiencing inflation. so why? so isn't that should not be the primary thing people are talking about are what am i missing? well, let me mention one thing, you know, as far as destruction of the capital markets, it's inflation that does that. deflation, more or less leafs the system itself, intact, because the central borrowers haven't been screwed. the deflation visits pain on borrowers that the lenders haven't gotten screwed as far as what's going on. now,

you know, you can see that, that conflict between inflationary forces and deflationary. let's just take the renters that you mentioned for one, you know, they've all been subsidized for quite a while. it works out to be sort of a transfer payment to landlords that they've received from the government. but we're running up against. i think it's a july 31st threshold on the non eviction clause in one of the stimulus bills. and if all of the, let's just take the extreme example where these checks that have subsidized rents for so long stop flowing. so that's going to put a squeeze on the landlords. they have their own borrowing their own mortgage just to pay. and that's really deflationary. there's no question though that if you go out shopping pretty much everything is that the prices are insane. but, you know, we, we've never really made a distinction between whatever kind of inflation we're happening, we're having now,

and the one in the seventy's, it was driven by a wage spiral. but right now we have inflation driven by an asset explosion. and that's why they're very different, you know, the seventy's inflation was called organic. it had a, a push and pull factor and wages push prices up, which in turn push wages up. but now most of the inflation doesn't come from that kind of slow acting dynamic. it's really coming from an asset, inflation that could collapse any time. you know, if you have a bare market and stocks, you're going to be deflating like crazy to follow up on a point they just made and one that a mistake that i make often. so in other words, destruction of capital is really associated with inflation because you're incorrect, increasing all this money and you're destroying the purchasing power,

etc. whereas deflation, as you're pointing out here, is an attempt to preserve the system as it is. and so this is why when banks are about to fall on their debts, the federal government just comes in and does so quantitative easing, they take all that bad debt off their balance sheets and they replace it with some new fresh treasury bells. so they're not, they're not allowing the system declines itself. of all the mal investments that may or may not have occurred there and keeping a system afloat that is not worthy to be kept afloat because of all of the terrible price signals that are going on. therefore, my conclusion is that the deflation or preservation on the system as we're seeing it now that that's a political act, right? so the, there's a political dimension to this economic problem. that's not as not capitalism.

it's fun, it's not a bad, it's a political problem. it's not a fair statement. well, it is not even really much of a decision. you know, we're really at the point of inflator die right now. and it's, we've been sort of sending off deflation for 2 decades. and we're not sort of standing still in that process. you know, the more the, whenever you defend inflation, whenever you try to hold the line against that deflationary juggernaut, it's waiting to implode. you're essentially using borrowing is the mechanism. and so we've had a lot of money borrowed into the system at a given fixed interest rate. and i mean, fixed in, in the couple ways, or mainly in the way that gamblers 6 horse races. so we really can't afford to have interest rates uptick because it will subject literally,

quadrillion of dollars a borrowing that has been level that have been done on planet earth. a lot of it's through the derivatives market to a somewhat higher rate of interest. and that would be crushing, but i think the effort is doomed to fail simply because who did the key here is the real rate of interest. and when i mentioned that the burden on debtors earlier, that's what i meant to imply in 2007 and 8. when the housing market collapsed. people who had what were historically lo, mortgages were, were crushed really because the value of the underlying asset was shrinking. so if we're at, we've got interest rates, jerry rigged down to one or 2 percent. that can still be from a crushing burden. if the collateral that's behind it is shrinking in value, also of the chain you are transferring for a 2nd. it's 1.4 percent inflation as running at

a stated rate of 5.4 percent. going to hold these treasury bonds. i mean, you know, that seems to be the lunch pin of the whole system. if there's still support in the treasury market, they can keep this thing going. but how much longer is i going to last you think, reg, from a technical standpoint. if you look at the very long term chart, the 10 year and the 30 year, we're really in a corrective phase, it feels like a bare market where interest rates are going higher in bond prices are going lower . but to the extent that we've had that for a while, it looks corrective to me. on the other hand, i don't think that you know, the, the current interest agent coming down. i think they have a little further to go. but i do feel that there's going to be an upward skew and interest rates before the larger that long term trend going back 40 years in bonds, research itself with, by way of higher bond prices and lower yields. we've got

a little bit left on the bond rally, i guess the 10 year could flirt with one percent my guess. and then that 40 year bull market, the bonds you think, and you're essentially on a timer. you know, you're a guy who makes his bones by reading charts, and you have an excellent service over there. at rex pix has an excellent track record. you think that we're approaching the end of this bond 40 year bond moved rally? rick, i think it's got some room to the bonds. have room to rally. meaning rates can go lower. but obviously the big, you know, the big played the thing that made a portfolio that just stuck with bonds. a huge winner was that, that, that move is over. you know, you're really sort of squeezing out the last little piece of it, which would take rates their own from, from 2 percent to well lower and for

a while. but everybody was talking about negative us rates. i don't really see that happening under any circumstance. but it's really mainly because the collapse is going to be is going to happen when you measure the real rate of interest. so we could have interest rates, as i mentioned earlier, down near to or one percent. and it would still be a crushing burden because the, the borrowing took place is that the value of the collateral, the following? we have now a situation around the world where the inflation is causing a lot of food insecurity. millions of people are now similar to 2008 when we have the arab spring and we had the financial crisis. we had the food insecurity issues contributed to revolutions and uprisings were on. the caspar that at seemingly with that have

a feedback into the market with the markets. look at that and have any kind of impact at all, or would they just continue with the status quo? right. well, i think the, the began to lot of really is the energy market, you know, coming out of the 20078, great financial crash the, the smart guys looked around and think, well, what can we hock up to our eyeballs? and since housing was a non starter, at that point, real estate, they decided, well, let's talk the old patch. so they did, and miraculously, you see the price of crude rallying now in the mid seventy's. and there's no way that that's, that's driven by demand. it's almost like the stock market, you get a little incremental feeding into a market like amc or game stop. and it's do you have a kind of short squeeze effect? so i'm not quite sure how that would be engineered and crude, but it's sort of

a for, it's a benign miracle. the crude prices are so high because that's really where a lot of the leveraging took place. you know, the global markets have been pledged against oil and energy assets to an extent where you might say, we really need for these prices to be high. but i don't see the support of demand there. even from the biggest user at the margin. china, rec, and my thanks so much bring icons report. thank you max for inviting me on. that's going to do it for this edition of kaiser report with may max kaiser and stacy herbert one think, i guess rick ackerman of ricks pix until next time via the me the a. ready ready watch cancelli class.

like i said, it was just beside the culture blue book. truly i just don't want to board the because it's always more use to meet the history cuz usually so which is what gone. yeah. cuz really new, awful reason at the moment that she's in the nice thing is not a monumental charges on top of it. i was

experience demonstrations for and against the her by the government. many in the us allowed we say something must be done. what that something is, is not entirely clear. the fact is, the u. s. has done many things against cuba for decades. namely, the long standing trade embargo, maybe washington should stop trying to help the cuban people for a change she muffled for simply a little slow, letting them go by susan. well, the longer i was come a little to go with me when you have this week or do you have a meeting in the room, initial pathetic steamy. i'm go, i'm going to spell them the one that you wish to come for the else was good. 2 for me to go with them you wish nicholas you soon the

when you finish the mental, begin quickly elude initially thinking what's going on normally, financial young hoody illusion. right? you lose prison. you could shoot it to the lower the with a war on drugs started as a way to come back. a great problem. what's the one? it's part of the attitude of the nation, not just of north dakota. and it got to be something that you could get elected. this time, the fight against drugs took a check and told us that andrew was competing short form. this is way too dangerous for him to be doing. clearly they put him in harm's way. a rural college student does interest get shot in the head and found in

a river like that. something else had to be happening with the sea. and now just in front of a bridge that was under construction at the time local to telling me that well, construction equipment that was all not bridge was swept away as if it was nothing record flubs, germany and belgium with more than a 100 dead as entire building and stepped away. more than a 1000 people are still missing the books as if a bomb has like world war wreck streets and looted schools, south africa. so i was another nice to brian saw the jailing of a school president to speak to the woman who amid the chaos through which.