hi max kaiser. this is the kaiser report. did you enjoy those summer solutions? yeah, i know i did. well, it's time to get back into the problems. so let's turn to stacey. right. well you now the fad had better hope. the solution to inflation is just time because remember, they keep on saying it is transitory. well, their usual solution is giving more and more money. the treasury is always giving more and more money, congress more and more money. so we're going to look at what some of the results that have come out while we've been gone for the past 2 weeks. we see now the inflation numbers have over 5 percent. the highest and a very long time since 2008. but container freight rate spike to new extremes, up 500 percent for asia, u. s. asia, you says early 2020 and the worse is still ahead and wolf. richter uses

a quote from jerome power just under this, it turns out it's a heck 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 shock. you mac, 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 bank 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 are gonna last 20 years. number one, money printing, number 2, china centers, 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, with the clothes, was dropping precipitously a lot cheaper. well, at some point, you know, as you pour water into a bucket, at some point the bucket us 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 the money printing like that water in the bucket is now spilling over as 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, i 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 in 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 spending at, but they're 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 p e. you wish that for 24 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 so it set 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 find that as big coin cause and hyperinflation

. right? what interesting those to bring brought up in that 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 from our 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 tension 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 the average household savings accounts and they're feeling good and they want to go out and spend it. the 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 headline 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, analysts expect rent prices 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. you have a p and you have 3 shelves, 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 shall you turn over 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, 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 city is not new york, not san francisco, and you're seeing the rents sore. 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 for 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 were 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 growing 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. she was full simply real thing a little slow, letting them go. but seriously, well, i don't want to come to go see me when you go to meeting in the room, initial pathetic steamy. i'm go,

i'm going to spell them the one let me know which was going to work for me. and then we'll go from you soon. this new when you mentioned kim complete illusion initially connect on the, on the financial young, moody and lose you lose lose news. you could shoot it to the lower the news. oh, look forward to talking to you all that technology should work for people. a robot must obey the orders given it by human beings, except when such orders that conflict with the 1st law show your identification. we should be very careful about artificial intelligence. the point obviously is to

great truck rather than fear take on various jobs with the artificial intelligence we'll summoning the theme and a robot must protect its own existence with the welcome back to the cause. the report imac guys are time now to return to the legendary rick ackerman of ricks pix rick. welcome back. thanks much for inviting me on max. i'm looking at today's new york post to the front page. huge headline, the incredible shrinking dollar. it's 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 down same banner stand these 2 words, inflation versus deflation. why? why is there such confusion? isn't obvious cation for a purpose, or are 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 any more that you really can't measure it. you know, i, i always suggest that 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 dear. and of course, inflation is an opportunity for borrowers to pay back what they owe in cheap and 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. first 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 it's impossible to totally get a handle on this. and $11.00 in back, that seems to be really the tell tale index would be the dollar. so the dollar is showing a lot of strength recently. and so that plays into this deflation theme. and, but nevertheless, you've got c, p 5.4 percent ramps up 7.5 percent. freight container rates are,

are 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 in the capital markets or destruction. the bond markets, that's deflation. but you've got all the money supply. what about 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 leaves 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 less cold 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. so 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, it's 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 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 and value also of the chain you're transferring for a 2nd. it's 1.4 percent. inflation is running at a stated rate of 5.4 percent. so you know,

how much longer are folks willing 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 bank and keep this thing going, but how much longer is i can 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, you know, 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 move rally, right. 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 play the, the thing that made a portfolio that just stuck with bonds, a huge winner was that that move is over. you know, you're really sort of squeezing out the last little piece of it, which would take great their own from, from 2 percent to well lower and for a while or but everybody was talking about negative us rates. i don't really see

that happening under any circumstances. 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 the are 2 or one percent. and it would still be a crushing burden because the, the borrowing the took place is that the, the value of the collateral be falling. 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 had the arab spring and we had the financial crisis. we had the food insecurity issues, contributed to revolutions and uprisings. were rhonda caspar that at seemingly with that have a feed back into the markets with the markets look at that and have any kind of

impact at all or what 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 hark 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 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 squeezed effect? so i'm not quite sure how that would be engineered and crude, but 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 i kaiser report. thank you max for inviting me on. that's going to do it for this edition of kaiser report with me, max kaiser and stacy herbert for me think, i guess rick ackerman of ricks pix until next time via the me. ah, when i see black manager, i see my when i was growing up like america spoke to me when what a straight year did not to say like last 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 know from black america. i learned how to speak back to one of the regional people around them. now the police were out with statistics. i'm scared that my children are going to go up in the country. that thing says no racism, but they're more likely to end up in the criminal justice system. then there are other fellow friends in daycare me join me every 1st day on the alex summon show and i'll be speaking to guests in the world, the politic sport business and show business. i'll see you then. me

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