"KUDLOW" IS NEXT.
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LARRY: HELLO, EVERYONE, WELCOME
TO "KUDLOW," I’M LARRY KUDLOW.
INFLATION TODAY, BAD NEWS, MUCH
STRONGER THAN EXPECTED.
RISING .6 OF A PERCENT IN
JANUARY, 7 1/2% OVER THE LAST 12
MONTHS.
OVER THE PAST THREE MONTHS BY
THE WAY CPI HAS NOW HIT 8% AT AN
ANNUAL RATE.
SO PRICE INCREASES AND PRICE
PRESSURES ARE GETTING WORSE, NOT
BETTER.
GROCERY PRICES UP 9.3% LAST
THREE MONTHS, ANNUAL RATE, 7% A
YEAR.
GET THIS ELECTRICITY PRICES UP
21%.
OVERALL ENERGY UP 18%.
CLOTHING UP 12%.
GASOLINE UP 22%.
IF YOU’RE A HARD-WORKING MIDDLE
CLASS BLUE-COLLAR FAMILY THE
INFLATION TAX IS HITTING YOU
HARD.
THIS IS FOR PRODUCTION AND
NON-SUPERVISORY WORKERS, NOT THE
ABOUT SHOT MANAGERS, PRODUCTION
AND NON-SUPERVISORY WORKERS.
WAGES HAVE INCREASED 6.9% OVER
PAST YEAR, THAT IS WAGES, 6.9
BUT PRICES UP 7 1/2%.
THE HARDER YOU WORK THE LESS
YOU’RE TAKING HOME AND THIS IS A
VERY SERIOUS PROBLEM WHY
INFLATION IS THE NUMBER ONE
PROBLEM IN THE COUNTRY AND
UNFORTUNATELY THERE IS NO END IN
SIGHT.
NOW WE SAVED AMERICA BY KILLING
THE SPENDING BILL BUT I GUESS
THE NEW MISSION NOW US TO SAVE
AMERICA AND KILL INFLATION.
RIGHT NOW THERE IS NO ACTION ON
THE HORIZON THAT WILL KILL
INFLATION.
THE CULPRIT AT THIS POINT IS
REALLY THE FEDERAL RESERVE.
WE’RE IN THE MIDST OF A PRICE
AND WAGE SPIRAL, MEANING PRICES
ARE GOING UP SO FAST THAT THE
WORKFORCE MUST DEMAND HIGHER
WAGES.
IT IS NOT THE WORKERS FAULT.
IT’S THE GOVERNMENT’S FAULT.
THERE IS FAR TOO MUCH FEDERAL
SPENDING WHICH IS STILL IN THE
PIPELINE BUT IT WAS ENABLED AND
COME MOW STATED BY VASTLY TOO
MUCH FEDERAL RESERVE MONEY
CREATION.
AS THIS FIRST CHART SHOWS THE
FED’S BALANCE SHEET, THAT’S THE
RAW MATERIAL FOR MONEY SUPPLY
GROWTH, THAT’S INCREASED BY FIVE
TRILLION DOLLARS IN THE LAST TWO
YEARS, FIVE TRILLION.
IT IS UNPRECEDENTED.
IN SHORT THE CENTRAL BANK HAS
BEEN BUYING ALL THOSE BONDS FROM
UNCLE SAM’S MASSIVE DEFICIT
SPENDING.
NOW, AS THE NEXT CHART SHOWS
USING A THREE-YEAR SMOOTHING
AVERAGE TO MAKE SOME SENSE OF IT
THE AVERAGE ANNUAL RATE OF THE
MONEY SUPPLY HAS MOVED FROM 5%
GROWTH TO 14% GROWTH IN A MERE
TWO YEARS.
WE HAVE NOT SEEN ANYTHING LIKE
THIS SINCE THE 1970S AND
FRANKLY, I’M NOT SURE IT GOT ANY
HIGHER IN THE ’70s.
IN ADDITION WITH ALL OF THIS
EXCESS MONEY CREATION BY THE
CENTRAL BANK, CHECK THIS OUT, AN
INDEX OF COMMODITY PRICES HAS
INCREASED BY 70% AS SHOWN BY THE
NEXT CHART.
LOOK AT THAT.
WE’VE NEVER SEEN ANYTHING LIKE
THIS.
ALL RIGHT.
GOVERNMENT SPENDING, FED BOND
BUYS, MONEY SUPPLY INCREASES,
COMMODITY PRICE EXPLOSION.
WE’RE NOT TALKING ABOUT JUST A
FEW PRICES.
WE’RE TALKING ABOUT VIRTUALLY
ALL PRICES THAT ARE GOING UP.
THAT IS A MONETARY PHENOMENON.
IT IS NOT ABOUT CONTAINERS IN
LOS ANGELES AND LONG BEACH,
ONE-TIME THINGS.
IT IS NOT EVEN ABOUT TRUCK
DRIVERS OR THE PANDEMIC.
IT ALL PRICES RISING, NOT JUST A
COUPLE PRICES WHICH CAN ONLY BE
PRICED TO MONETARY EXCESS AND
THAT’S WHAT IS TAXING THE MIDDLE
CLASS, AND THAT’S WHAT IS TAXING
THE LOWER INCOMES EVEN MORE.
SAVE AMERICA, KILL INFLATION.
THE PRESIDENT CONTINUES TO HAVE
MISGUIDED CONFIDENCE IN THE
TREASURY SECRETARY’S ADVICE.
SHE, MADAM YELLEN KEEPS TELLING
HIM INFLATION WILL FALL TO 2% BY
YEAR’S END.
NO, IT WON’T, NOT A CHANCE.
MONETARY POLICY CHANGES WORK
WITH LONG AND VARIABLE LAGS.
IT WILL TAKE TWO OR THREE YEARS
TO REMOVE THE PUNCH BOWL.
TODAY’S INFLATION WAS BAKED INTO
THE CAKE IN 2020 AND 2021.
THAT CONTINUES HERE IN 2022.
YOU SEE WHAT I MEAN?
ANY CHANGES WE MIGHT MAKE OF
THIS YEAR OR NEXT YEAR WON’T BE
FELT UNTIL 2024, 2025 AND THE
SAD PART IS THE FED CONTINUES TO
BUY BONDS.
WE’RE BUYING THE GOVERNMENT
DEFICITS, STILL DOING IT.
THAT’S FUELING MORE MONEY GROWTH
AND THAT IS ACTUALLY FUELING
MORE INFLATION.
THEY ARE MAKING THE PROBLEM
WORSE.
BY THE WAY, INTERESTING SIDE
POINT, THIS COMMODITY PRICE
EXPLOSION INDICATES JUST HOW
MUCH YOUR MONEY’S VALUE HAS
DECLINED.
COMMODITIES ARE A VERY GOOD
BENCHMARK FOR DOLLAR VALUE, WHAT
IS IN YOUR WALLETS, POCKETBOOKS.
COMMODITIES EXPLODING UP.
DOLLARS IN YOUR BAG ARE GOING
DOWN.
NOW A SENIOR ADMINISTRATION
OFFICIAL TODAY POINTED TO THE
FED’S INDEPENDENCE.
NOW THAT IS A GOOD THOUGHT.
THE PRESUMPTION LEAVE THE FED
ALONE AND THEY WILL TAKE CARE OF
BUSINESS BUT WHY IS THE
WHITE HOUSE APPOINTING THESE
FAR-LEFT WOKE RADICALS LIKE
SARAH BLOOM RASKIN AND LISA
COOK?
THEY’RE NOT WORRIED ABOUT
INFLATION.
THEY’RE WORRIED ABOUT CLIMATE
CHANGE AND A BUNCH OF LEFT-WING
SOCIAL POLICIES.
THEY’RE NOT WORRIED ABOUT
INFLATION.
THIS IS A BIG PROBLEM.
THEY’RE APPOINTING THE WRONG
PEOPLE.
40 YEARS AGO RONALD REAGAN
WORKED WITH PAUL VOLCKER TO
VANQUISH INFLATION, OKAY?
REAGAN CUT TAXES.
VOLCKER CURBED THE MONEY SUPPLY.
THE TAX CUTS REJUVENATED THE
ECONOMY.
CURBING THE MONEY SUPPLY AND
IMPROVED THE VALUE OF THE DOLLAR
AND LOWERED INFLATION.
ALL GOOD.
UNFORTUNATELY TODAY, I DON’T SEE
A REAGAN AND I DON’T SEE A
VOLCKER, DO YOU?