The Causey Consulting Podcast

Permanent Inflation & How This Affects Your Job

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Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here's your host, Sara Causey.

Hello, Hello, and thanks for tuning in. In today's episode, I want to talk about permanent inflation and how that impacts your job, as well as how it impacts the broader job market overall. Towards the end of last year, we started to see more commentators and fat cats saying the quiet part out loud, ie in this case, inflation, well, it's not really going to go away. I think most people with common sense probably already knew that. However, here we are in an election year. And I think you still have a fair number of people with false hope, and hopium. They think at some point, as if my magic prices will go back to the way they were 2018 2019. Before all of this, I could be wrong. And I quite frankly, hope and pray that I am wrong. I just don't see that happening. I think that once these corporations see that you're willing to pay a particular price for something, no matter how much you're squeezed, and how painful it might be, you're willing to pay the price for it, they're going to continue to charge that price for it. And even if things come down from being as swollen as they have been, I don't think they're going to reach 2018 2019 levels. That's the thing. If you jack up the price on something by 20%, and then you bring it back down by another 10%. We are still making 10% More than you were before. So the end consumer is still going to get pinched. Now they might not get pinched as severely over the course of time, but they will still get pinched. I live this out in my farming endeavor. Because we had a drought the year before last and it was brutal. Hay was very difficult to come by. And you needed to start hanging your animals earlier. And there were people hanging in August and September, including us, which is crazy. At that time of the year. In this part of the Midwest, you should still have plenty of green grass and forage for your herbivorous animals to eat. But it was dry and burned. The earth was just scorched. If you were trying to garden Forget it. There was no way that was the same year that I tried to grow some corn and it desiccated in the sun. It was burned, it had black burn marks on it. absolute insanity. So when you're involved in agriculture, you have to always be thinking about the next season. When you're in winter, and it's cold, you have to be thinking about the heat of the summer, in the heat of the summer. And when you're fitting like crazy, you have to be thinking about the possibility of a brutal winter, you always want to assume that whatever the next major season is, it will be a bad one. If it turns out to be mild, that's great. That's wonderful news. But you always have to be prepared for the possibility that it will be a bad season, because you have animals with their life depending on you being able to prep appropriately and make good decisions. So we were ready for a bad winter. What if we have blizzards? What if we have snow squalls, both of the almanacs were calling for some terrible mind bending winter and then all of a sudden it was like, is it just going to be 60? It's like every day, there's going to be 60 degrees and every night it's going to be about 30 very weird winter doesn't feel very wintry, at least not yet. But you never know. So you have to plan ahead for all of that. And well, silly me silly goose. I thought Well, since we're not in a drought anymore, hay is a lot more plentiful. Maybe just maybe we will see some price reductions. It Wrong answer. Even though you would think because the supply had gone up, that the price would also come down at least somewhat. I actually had a couple of vendors who raised their prices. They were charging even more this past summer than they did the year before when we were in a drought and hay was so difficult to come by. That's the thing. When people realize that you will pay a certain price for their goods or services. They're not coming back down. Now, I'm not going to sit here and tell you that I know for certain it's just impossible that we could have deflation. We could have deflation. I think it's important to look at what the fat cats and their cronies are telling you however about this This idea of permanent inflation. On December 18, over on the job market journal, I published the article Do you feel overpaid? Because last year the Federal Reserve worried that you are getting paid too much when it's like a massive eyeroll Of course, of course they do. My god for John and Jane Q Public having the nerve to seek out higher wages because of inflation and feeling squeezed and pinched and bruised and beaten at every turn, how dare they, but it's really not about what you and I believe. It's really about what the fat cats and the power brokers believe. We don't have more buying power. The wages that we do get are not keeping pace with inflation. We get the gaslighting of like I we don't understand why you peons are in such a bad mood about everything. Things are great. People are doing great flush with cash, you should feel like you were sitting on top of a giant pile of candy, living your best life. Well, maybe they are because you know there was that Oxfam study that they went to Davos and said in front of the fat cats themselves about how much pandemic wealth was in gorged by the fat cats. They made absolute truckloads of money now everybody else suffered and had to go without jobs. But hey, the fat cats prospered. Well, good for them. Meanwhile, back in December, you had Steve Rattner going on Morning, Joe over on MSNBC. Same kind of gaslighting. There's a large disconnect between the state of the economy and how people feel about it. And he's sitting there like, well, inflation has come down faster and further than any of us would have guessed. I don't want to declare a victory. But hey, that's the trajectory we're on right now. Things are looking forward again. Unfortunately, old senile old man, he just doesn't get no credit for it. And it's like, oh, God, what a headache. And that's going to only get worse. As we go further and further into 2024. We get closer to the election, if there will be more of Orange Man versus senile old man or whoever they decide to trot out in the place of Orange Man. God only knows. The thing of it is if you have some high hope, high apple pie in the sky hope that if we just change out the Congress, if we just get somebody different in the White House, it's going to all be great somebody, some magical mythical wonderful, some somebody, some politician is going to turn it around. And we're going to be back with 2018 2019 prices. lickety split. You are probably not going to make it if you have hung your hope on that you are probably not going to make it I don't see some Hail Mary pass coming. That's going to be like a bomb, a salve. Everything is better. Now we had this dust up we had these problems, but everything's fine. Now, this politician or this political party, they're gonna make it all better. They're gonna kiss your little booboo. Put a little bandage on it, and everything's gonna be great. No, no, no, no, I don't think so. So we have this video, I'll drop a link to it where Steve Rattner has gone on MSNBC, to tell us that people are doing great, you know, senile old man he ought to be getting more credit for having this bang up wonderful economy. But the thing is, he also talks about this idea of permanent inflation. He he concedes the point that some quote, permanent inflation had been processed through the system. Don't miss that information. This is what I blogged about back on the job market journal in December. Inflation is a hell of a lot higher than any 3%. And in some cases, it's probably higher than the 20% that Scarborough tosses out on the Morning Joe episode. And then also permanent inflation. A Wall Street CEO fat cat  just said the quiet part out loud on national television. Permanent inflation, some permanent inflation has been put through the system. Yeah. It's not going away. Even if prices come down somewhat. And they don't stay as bloated. John and Jane Q Public are not going to come out on the winning side of this deal. And I like the way that it's explained by Jim Grant, because the point that he's making is really a similar point to what I'm trying to make for you in this podcast episode today. I'll drop a link to this as well. also back in December on Fox Business, Jim Grant was on talking about inflation, and how inflation is permanent. Because even if prices go down, you are never going to recover the purchasing power that you lost due to inflation. That's a very important point. It's easy to nuance and it's easy to miss it. The dollar has been an is being still devalued. Your wages are not ever going to keep complete pace with what's going on in the economy. And as Jim Grant says, this idea that we're gonna have some massive deflationary cycle where we will see prices go back to like, 2018 2019. That's just not going to happen. As he says in the video, we just don't have deflation to that level anymore in the economy. It's he just doesn't see it happening. I don't either. I don't think that we will have prices go back down that low. Again, I can't imagine a world where that's going to happen. Now, over on the Boston courier toward the end of November last year, we were talking about like, what what will the 2024 job market look like? And we talked about the idea of maybe waiting until late December instead of late November to publish that. And I said, Let's do it. Let's Let's scoop it. Let's be ahead of the trend, because people need this information. While they still have some time to prepare some opportunity to get their stuff together. People need to know. And they asked me the question, do you think the downturn will last into 2024? And I reply, unfortunately, I do. In fact, I expect things will get worse before they get better. I doubt that any mainstream sources will report the true unemployment rate, but I predict more layoffs, hiring freezes and company closures. I also believe that many people who have full time employment will want to keep it and will avoid making any job changes without a clear compelling reason. Sadly, I believe you'll also hear people on social media along the lines of I didn't see this coming. I've been unemployed for months, and it feels hopeless. We've already encountered these horror stories and 2023. And I believe we'll see even more in 2024. However, believe me, I hope I am wrong. Not even a month later, we had not even arrived in 2024 Yet, the headlines broke about smile direct club. And there was one headline that literally read I woke up and it was no longer accompany. And when I blogged about that, I made another prediction, prediction alert. This will not be an isolated incident. I'm afraid it's the tip of a nasty iceberg. And I stand by that we saw Etsy laying people off during the holiday season. And I saw one ad after another every single night, we would see an ad for doing your holiday shopping on Etsy. And it's like, well, they have the budget for advertising. But then here they are laying off 11% of their workforce at a time when they should be balls to the walls busy. That's clearly not a good sign. You had Citigroup telling people it's all right to work from home through the remainder of the holiday season. I made a prediction alert on that too. There's going to be some people that get sent work from home for the remainder of 2023 that come 2024 their keys not going to turn in the door anymore. They're being sent home because some of them are not coming back. I wish that I could give you some sunshine, roses, lollipops and gumdrops. But I cannot. I think that the smartest thing that you can be doing is preparing and getting your mind right. I'm going back now to my interview with the Boston courier no silver linings to report probably not for 2024. No. in the US. 2024 is an election year which only adds to the drama, the economy and job market can and I'm sure will be used as fodder for the campaigns. I'm reminded of the debate between Jimmy Carter and Ronald Reagan in 1980. When Reagan asked the American public, are you better off than you were four years ago? We also have to factor in what the Fed will do. Do they return to low interest rates and cheap money? Or do they keep raising interest rates and tightening the belt? Only time will tell? They don't consult me on such decisions? That's for sure. And they asked what happens either way with the job market? This is a great question. And it's also one of the things that I want to highlight in this episode before I sign off. When we're talking about permanent inflation, where we're talking about deflation. If it turns out that the wind comes completely out of the sails of this sailboat we're on and prices go into a freefall. You're screwed either way. And believe me, I'm supposed to get on here as a content creator and give you sunshine, gumdrops and lollipops and kiss you are behind until you that everything is great. But I have more respect for you than to do that. I don't want to get on here and feel like a giant liar. In my mind, if you're tuning into this podcast or if you've jumped over and decided to listen to my nighttime spin off the conspiracy theories, you're already ahead of the pack. You clearly care about trying to have somebody tell you the truth as they see it, instead of blowing smoke up your rear end. I cannot tell you that I see the job market for 2020 for being robust and resilient. I don't freaking think so. So they asked me this question, what happens either way with the job market. And I respond, if the dollar is further devalued, you will see job seekers and employees asking for higher wages to try to cope with the reality that their salary simply isn't going as far anymore. It's important to note that asking for a higher salary doesn't always equal getting it. In fact, that might lead to increased job losses. If small businesses are less able to obtain credit and or loans, you'll see more downsizing and companies going out of business completely. So that in turn leads to increased job losses. If we hit a deflationary cycle and corporate profits go down, you can expect to see job losses. I understand this sounds super pessimistic, super gloom and doom. I get it. From my perspective, I think the economic engine is out of gasoline. And we're past the point where any correction is going to happen without job losses. Again, I hope I'm wrong on this. I want to be wrong. I just don't think that I am. I will say that again. I think that we're past the point where any correction is going to happen without job losses. I think back to the episode that I recorded about the PBS Frontline show age of easy money, where they talked about the 2008 financial crisis. And in that episode, Neel Kashkari talks about how a person's job is typically one of their most important assets. Yeah, and so what happens if you lose that job? What happens if you own and operate your own business and none of your clients have any money to give you anymore? I know that this is bad news. It's something that we just don't want to think about. It's easier to get lost in Tik Tok or Instagram. It's easier to watch bullcrap online or on streaming media and not think about these things. But for me, that's what the fat cats count on. They count on you being lobotomized. They count on you to not care. You know, I'll be recording episodes here. And they're over on my other podcast about JFK and the pop pop. And there's a comment that Allen Dulles made that nobody reads. It's okay for us to have this Warren Commission report and to have hundreds upon hundreds upon 1000s upon 1000s of pages. And even if it's completely full bull, we don't have to worry about it because nobody reads some dry academic some professors. They'll read it and they'll pick it apart, but the general public is not going to read. Now that was in 64. Here we are 60 years later. I mean, it can be said even even more so now. Nobody reads it's okay because nobody reads you can get out on Fox Business and say inflation is permanent and you're never going to recover the lost purchasing power and nobody cares because nobody's gonna listen to that. They'd rather screw off on Tik Tok. Then listen to somebody saying, Hey, we are really in the shits right now. But that doesn't have to be you. You can prepare. You can plan ahead accordingly and do what you need to do to try to survive this thing. Stay safe, stay sane, and I will see you in the next episode.

 

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