Authored by Michael Maharrey via SchiffGold.com,

When people talk about “inflation” today, they generally mean rising prices as measured by the Consumer Price Index (CPI). But historically, “inflation” was more precisely defined as an increase in the amount of money and credit causing advances in the price level. Inflation used to be understood as an increase in the money supply. Rising prices were a symptom of inflation.

I find this change in definition problematic. But many disagree with me. They argue that I’m being pedantic and the definition doesn’t really matter all that much.

In a social media exchange, I argued that rising oil prices due to the invasion of Ukraine weren’t technically “inflation” but are better described as price shocks. Price shocks do, in fact, raise prices. And those price increases can cascade through the economy. But unlike price increases due to an increase in the money supply, decreases in other areas of the economy will ultimately balance out price shocks (absent inflation) as people shift spending patterns. For example, if people are paying more for gasoline, they may cancel vacation plans. This drop in travel demand will cause hotel prices to fall.

In contrast, a rise in the money supply (inflation) will cause a general rise in prices with no corresponding price decreases.

“Joe,” a commenter on Facebook, disagreed.

You’re wrong. What you call ‘price shock’ is in fact inflation. The BULK of inflation is in fact Fed debasing the currency as you note. The inflation of prices is also a function of market forces that have nothing to do with the Fed. These pale in comparison to adding mega-trillions of dollars to the currency supply.”

If you read carefully, you’ll see that Joe simply substituted the current definition of inflation for the historical definition. He lumped price increases caused by Federal Reserve monetary expansion and price shocks together under one banner — inflation.

So, what’s the problem?

I can understand why people might think that this is nothing more than semantical nit-picking. After all, word meanings evolve over time. When I insisted on the classical definition of inflation, Joe argued that there was no reason to hold fast to archaic terms.

That you believe modern vernacular of the term includes things you think did not used to be in the term is meaningless. Why should I care about anachronistic uses of terms? I speak in the modern vernacular. I, for example, don’t speak in Elizabethan English so I’m not a KJV kind of guy. Likewise, I won’t insist on something from the 70s, because economic policy 50 years ago doesn’t mean a whole lot to me right now.”

The problem is that this change in definition creates confusion. And I believe that is precisely why government officials and the academics who support them have worked to change the common meaning of inflation.

Economist Ludwig von Mises warned about this shifting definition decades ago.  In his essay “Inflation: An Unworkable Fiscal Policy, Mises reiterated the precise definition of inflation.

Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check.”

Over the years, the government, along with its apologists in the corporate media and academia, altered the definition. Why? To suit government purposes. The standard definition of inflation bandied about today is nothing more than government propaganda.

Mises explains the problem with this change in definitions.

People today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation.”

In other words, the modern definition allows policymakers to shift the blame to other things while continuing their expansionary monetary policy.

Keep in mind, the Federal Reserve (and all global central banks) constantly inflate the money supply as a matter of policy. After all, the inflation “target” is 2%!

In fact, inflation is a stealth tax.

The inflation tax is the primary way the US government finances its deficit spending. The federal government spends billions of dollars every month, but it doesn’t collect enough taxes to cover its costs. That means it has to run deficits. The Federal Reserve monetizes those deficits. In effect, it prints money. They call it quantitative easing, but when you boil it all down, they’re just inflating the currency. As the money supply grows, prices rise and you feel the pain every time you go to the grocery store or the gas station. The government is getting bigger and bigger, and families across America are bearing that burden through higher prices.

The government loves the inflation tax because it never has to accept responsibility for levying that tax. It can blame it on all kinds of other factors like corporate greed, the pandemic, or “Putin’s price hikes” (i.e. oil price shocks).

This is especially true if you redefine inflation as simply “rising prices.” You lose the ability to parse out the impact of monetary policy.

If we use the traditional definition of inflation as an “expansion of the supply of money,” the culprit becomes clear. Who expands the supply of money? It’s the Fed and the federal government. So, if you accurately define inflation, you know exactly who’s to blame. But if the government can fool people into believing that one effect of inflation is inflation, they can blame it on everybody but themselves.

This is not to say price shocks and other factors don’t cause prices to rise. This is not to minimize the impacts of those price increases on our lives. The point is it’s important to distinguish inflation – an increase in the money supply causing a general rise in prices – from other factors driving prices higher. Without a precise definition, we lose our ability to talk about the phenomenon of rising prices and monetary expansion with any precision. And the government gets away with harmful policies.

By Ven Ram, Bloomberg Markets Live commentator and reporter

Sometimes, just sometimes, the markets want to hear what they want to and discard what seems discordant — even if policymakers keep hammering home the same message.

And so it was on Monday when Federal Reserve speakers let traders know that they were underestimating their intent on how far rates may climb in this cycle. Fed St. Louis President James Bullard, who has often been an accurate bellwether for where benchmark rates are headed, put it bluntly:

• The Fed needs to get to the bottom end of the 5%-7% range;

• Markets are underpricing the risk that the policy committee may be more aggressive; and

• The Fed needs to move farther into restrictive territory

His New York counterpart, John Williams, followed up with remarks that the Fed will need to stick with a restrictive policy through next year, meaning a rate cut — contrary to market expectations — is unlikely before 2024. For good measure, he has revised up his rate trajectory since the September dot plot.

Despite those reminders, Treasuries seem to be singing from a different hymn sheet of late. Two-year yields have basically sleepwalked through November, while 10-year Treasuries have rallied on conviction that the economy is wilting. It’s the reaction at the front end of the curve that seems particularly jarring. Front-end Treasuries don’t seem to give one the impression that they are quite priced for a terminal rate that may be higher than 5%.

Analysis shows that the differential between front-end yields and the Fed’s benchmark has always been positive before the conclusion of monetary tightening. And the Fed hasn’t been able to conclude its tightening cycle before the real funds rates is significantly positive — and at the moment we are at around -1%.

Given all the concerns about the strength of the economy, long-dated Treasuries may still be relatively better bid, but the front end could come for a re-assessment in the days to come.

The cost of Tesla, Inc.’s Model Y varies per country. In Mainland China, the crossover is the cheapest and starts at around $40,500. But in Singapore, the Model Y starts at a whopping $103,800 (and that’s before excise and registration duties). That’s a massive spread in price between both countries. 

Bloomberg compiled the list of the most and least expensive countries to purchase a Model Y. Singapore, Israel, Mexico, Hong Kong, and Taiwan are the most expensive. Meanwhile, Mainland China, Slovakia, Latvia, Lithuania, and Estonia are the cheapest. 

“Automobiles are generally more expensive in places like Singapore and Israel due to higher taxes, duties, and registration fees versus China and Europe,” Seth Goldstein, an equity strategist at Morningstar Research Services and chair of its EV committee, told Bloomberg, adding supply and demand are also important factors. 

Meanwhile, BloombergNEF estimates Model Y sales will be around 760,000 units by the end of this year. 

Once new factories in Austin, Texas, and Berlin, Germany, ramp up production in 2023 — the EV crossover could be the best-selling vehicle in the world. 

Authored by Paul Joseph Watson via Summit News,

As it mulls kicking Elon Musk’s Twitter off the app store, it has now been revealed that Apple restricted the use of AirDrop in China, a move that harmed the organizational efforts of demonstrators protesting against the CCP’s lockdowns.

Over the past week, multiple major cities across China have seen massive protests against lockdowns, with the normally compliant Chinese exploding into rage in response to their government’s ‘zero COVID’ policy.

Much of the unrest blew up in response to an incident in Xinjiang’s capital Urumqi, where at least 10 people, some say up to 40, were killed during an apartment fire because lockdown rules stopped residents from fleeing the burning building.

Most of the city’s residents have been prevented from leaving their homes for over 100 days as a result of the draconian rules, which are still in place nearly three years after the pandemic began.

With Beijing now trying to contain what some are calling the most serious mass uprising since Tiananmen Square, Apple is apparently helping them to crush dissent.

Earlier this month, Apple restricted the use of AirDrop in China, which protesters had been using to evade censorship.

AirDrop allows local connections between devices, meaning it cannot be monitored or censored by local authorities.

However, Apple launched an update to the app in China that restricted usage to just 10 minutes, making it harder for protesters to communicate with other activists, as well as send messages nearby bystanders and tourists.

AirDrop was also being used by protesters in Hong Kong, who were brutally suppressed by the CCP during months of unrest in 2019.

The smartphone company chose to roll out the new “feature” in China only right as the country experienced its biggest demonstrations in decades, which some would suggest is more than just a coincidence.

“Apple has helped Beijing to suppress public dissent multiple times, mostly by complying with its requests to remove apps used by protestors for information and communication,” reports Reclaim the Net.

“Apple also helps the Chinese Communist Party prevent users from remaining private by banning VPNs in the region.”

The development coincides with Elon Musk revealing that Apple is threatening to remove Twitter from the app store entirely over its support for – God forbid – free speech.

*  *  *

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Update (1134ET): 

After Chinese health officials announced an accelerating move to vaccinate older people against Covid-19, a sign the world’s second-largest economy could be reopening after disastrous zero Covid policies, a new report says the metro area around the world’s largest iPhone plant is set to loosen Covid restrictions. 

Bloomberg reported Foxconn’s massive iPhone factory in Zhengzhou, central China, is set to ease Covid control measures. 

*CHINESE CITY HOSTING KEY IPHONE PLANT LOOSENS COVID CONTROL

— zerohedge (@zerohedge) November 29, 2022

We noted last week that Zhongzhou authorities posted a statement on its WeChat page about mobility restrictions around the city due to rising infections. Now it appears restrictions are being lifted. 

Also last week, a combination of Coivid restrictions at the iPhone plant and city, along with pay disputes among new workers at the factory, led to massive unrest that is set to cause supply woes for Apple.

On Monday, there was speculation by Bloomberg that disruptions at the factory could result in a 6 million iPhone Pro production shortfall by the end of the year.  

The headline was enough to send Apple shares plunging from session highs. 

*APPLE DROPS MORE THAN 2% TO LOWEST SINCE NOV. 10

— zerohedge (@zerohedge) November 29, 2022

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Hong Kong markets and Chinese stocks listed in the US surged in premarket trading as Chinese government health experts made an unscheduled overnight announcement in which they not only vowed to speed up Covid shots for the elderly but to avoid excessive restrictions, fueling a new round of bets that Beijing is bending to the pressure of an economic reopening.

“The vaccination rate of the first dose of the vaccine for people over 60 years old has exceeded 90%, but it is still necessary to continue to do a good job of full vaccination and to strengthen immunization for people aged 60-79, especially those over 80 years old,” the National Health Commission wrote in a statement. An official told reporters that vaccination is the best way to prevent severe illness and death, and the elderly benefit the most. The low elderly vaccination rate was viewed as a significant roadblock in reopening the economy, like the rest of the world.

The Hang Seng China Enterprises Index soared over 6%, because as Bloomberg’s Sofia Horta e Costa put it, we got “plenty of signaling” on the road to reopening, to wit:

• Vaccinations: There was a focus on the vaccination of the elderly. This may seem obvious but it’s one of the major obstacles to China’s reopening. While there was nothing about a vaccine mandate, we heard strong words urging older residents to take responsibility for their own health.
• Virulence: One spokesperson detailed the science showing omicron and its sub-variants aren’t as dangerous. Lowering the population’s fear of the virus is an important step toward a panic-free reopening. There was also a bit of self-congratulatory talk around China’s low death rate — claiming victory over the pandemic also plays into how Beijing will clear the path to move on.
• Inconvenience: Health officials said it was paramount to minimize the impact caused by the Covid outbreak. This is somewhat of a reiteration but to investors it suggests the government is concerned about the anxiety caused by its pandemic response.
• Excessive measures: The spokespeople said some local governments are taking lockdowns too far, imposing measures without prior approval from the central government. Restrictions should be limited in scale and length, and local authorities must respond quickly to “reasonable” requests from residents. If not they will be named and shamed.

As Horta e Costa put it, “the key to tracking shifts in China’s Covid Zero policy will come from official tone, language and signaling — reading the tea leaves might be a high-risk bet but investors seem happy with what they got today.”

What could come next is further details on China’s reopening plans, but officials fell short of announcing those steps as the economy is stuck in a perpetual state of harsh zero Covid curbs. The pledge to bolster vaccination is seen as a step towards reopening.  This all comes after unrest erupted over the weekend across cities from Beijing to Shanghai and Chengdu. People are frustrated with zero Covid policies that have disrupted business activity and slowed economic growth. 

“We do not expect China policy to publicly shift away from the Zero Covid stance, however, we could see some easing of the policy privately and in localized areas,” Jefferies analyst Mohit Kumar told clients in a note.

Market sentiment has been whipsawed since Monday’s setbacks when investors dumped Chinese stocks as lockdown protests worsened. Sentiment has done a complete 180 degrees. Kumar said, “markets are in a happy state and are comforted by the expected reduction in the pace of rate hikes from central banks.”

The exchange-traded KraneShares CSI China Internet Fund, which holds about 40 Chinese stocks, jumped 6% in premarket trading. 

Today’s gains in US-listed Chinese stocks will add to the Nasdaq Golden Dragon China Index’s 23% advance this month, heading for the largest monthly gain on record, even if there is still a long way to go to recover recent losses as chart below shows. The gains started with a social media rumor about Beijing moving towards a zero Covid exit early this month. 

Shares in mainland China and Hong Kong rebounded. Hong Kong’s Hang Seng Index closed up 5.24%, and mainland China’s CSI 300 was up 3%.

Next week’s much-anticipated OPEC+ meeting in Vienna has now been moved to a virtual meeting but, as Amena Bakr noted, this does not mean its a nothingburger…

Don’t underestimate virtual meetings, the biggest cut in history was agreed on in a virtual meeting (2020) #OOTT #opec

— Amena Bakr (@Amena__Bakr) November 29, 2022

Reuters is reporting that, according to five sources among the delegates, OPEC+ is “likely to stick with the existing oil output policy” but also noted that the group “could consider further reducing oil-output”.

The reaction by the market is negative for now, suggesting the focus is on the ‘existing policy’ rather than “more cuts” as we note that out of 16 traders and analysts surveyed by Bloomberg this week, 10 anticipated a new supply cutback, with estimates ranging from 250,000 to 2 million barrels a day.

…so will we see a production cut now that OPEC+ has tested market reaction to maintaining current policy?

OPEC with 2 market tests in past 24 hours. Now has full visibility of positioning

— zerohedge (@zerohedge) November 29, 2022

The Israeli Air Force has unveiled that this week it will conduct its largest joint aerial drills in years with the US Air Force, which involves a highly provocative mock mission to take out Iranian nuclear sites. 

The Jerusalem Post details based on military statements, “The drill will take place from Tuesday until Thursday over the Mediterranean Sea and Israel. It will include long-range flights such as those that Israeli pilots might need to make in order to reach the Islamic Republic.”

Aerial refuelers from both sides will also assist, in addition to fighter jets – given the militaries will simulate operations that would theoretically reach all the way across the Middle East into the Islamic Republic. 

The US and Israel have meanwhile lately pledged closer military and intelligence cooperation, with Washington vowing to assist the Jewish state with missile defense if it ever came under attack. 

IDF Chief of Staff Lt.-Gen. Aviv Kohavi told CENTCOM Commander Gen. Michael Kurilla during the former’s visit to Washington last week, “We are operating together on all fronts to gather intelligence, neutralize threats, and prepare for various scenarios in either one or multiple arenas.”

All of this comes as Prime Minister-designate Benjamin Netanyahu is forming a government and will soon once again be commander-in-chief. The well-known anti-Iran hawk has in the past routinely warned that Israel won’t hesitate to conduct a preemptive attack on the Islamic Republic if Tehran gets close to developing a nuclear bomb. 

The only question that would remain if whether the Biden administration would greenlight such a preemptive strike. It must be remembered too that Israel reportedly assisted in some manner (likely on the intelligence front) with Trump’s January 2020 assassination strike on IRGC Quds Force Gen. Qasem Soleimani, which occurred during Netanyahu’s prior term.

Authored by Thomas Brooke via Remix News,

The low-emission zone in central London, within which motorists are charged £12.50 (€14.56) per day for driving the most polluting vehicles, is set to be extended to cover the whole of London, the city’s left-wing mayor, Sadiq Khan, announced on Friday.

From Aug. 29 next year, the Ultra Low Emission Zone (ULEZ), which currently covers the heart of London will be extended to the Greater London Authority boundary, a move that will increase the costs of hundreds of thousands of commuters and residents who drive non-compliant vehicles.

Khan described the decision to extend the zone as “one of the toughest decisions” he’s taken as mayor, but claimed the move will see 5 million more people benefit from cleaner air.

“The ULEZ so far has been transformational, reducing harmful pollution levels by almost a half in central London,” Khan said.

“But there is still far too much toxic air pollution permanently damaging the health of young Londoners and leading to thousands of early deaths every year, with the greatest number of deaths in the outer London boroughs,” he added.

The diagram outlines the new boundary for the ULEZ which comes into effect on Aug. 29 next year

The extension has been agreed despite overwhelming opposition from Londoners. The BBC reported that a public consultation on the extension plans, which Khan insisted was a genuine consultation and would factor into his decision, showed 80 percent of people in the affected area opposed the plan.

London Assembly member Emma Best said the announcement came following “a sham consultation from a sham Mayor.”

The move will mean that an estimated 200,000 motorists of non-compliant vehicles producing higher carbon emissions will be slapped with a daily £12.50 levy for driving their vehicle within the Greater London Authority boundary.

The charge applies all day, every day, with the exception of Christmas Day, and those with non-compliant cars residing in the affected area are not exempt.

At the same time, Transport for London (TfL) has announced the penalty charge for non-payment of the ULEZ fee will increase from £160 (€186) to £180 (€209), a charge that is halved if paid within 14 days.

The London Assembly Conservative group tweeted: “Londoners face paying a £12.50 daily cost of living charge if driving a non compliant vehicle in a London-wide expanded ULEZ zone. Despite a majority of Londoners opposing the scheme.”

The Federation of Small Businesses (FSB) opposed the move, insisting many of its members in Outer London will be badly hit, while the Alliance of British Drivers claimed the move was clearly designed to fill the coffers of Transport for London.

“His whole basis for extending the ULEZ zone on the basis of public health doesn’t stand up to scientific scrutiny,” said Brian Gregory, the alliance’s policy director.

“TfL has an enormous hole in its budget, and Mayor Khan is looking to fill that hole by any means that he can,” he added.

Nicholas Lyes, head of roads policy at vehicle service company RAC, said the announcement will be “a hammer blow for desperate drivers and businesses already struggling with crippling fuel costs.”

Good thing the UK recently “war gamed” emergency plans to deal with energy shortfalls because a collapse in wind power has skyrocketed electricity prices, and network operator National Grid Plc might ask homes and businesses to reduce power use on Tuesday. 

Some hourly power contracts for Tuesday jumped above £1,200 ($1,445.92) a megawatt-hour on Epex Spot SE as wind generation is set to come to an abrupt halt, reported Bloomberg. 

Britain has one of the largest offshore wind farms in the world but is prone to energy shortfalls when the wind doesn’t blow — making this type of renewable energy not so reliable.

For the first time, tight power supplies could force National Grid to deploy a new measure that pays households to reduce power consumption during peak demand hours. 

Thousands of households with smart meters have signed up for the demand reduction program that has been pilot-tested. It could be used for the first time, according to a warning issued by National Grid. 

National Grid had initially warned blackouts are possible this winter due to natural gas supply cuts following Russia’s war in Ukraine. 

The collapse in wind power this week could be a perfect storm as temperatures are expected to be colder than average in the first half of the week, which will send electricity demand higher. The grid operator expects peak power consumption of around 41.1 gigawatts this evening and 42.4 gigawatts on Tuesday, indicating spare capacity would tighten as the grid struggles to produce enough electricity to satisfy demand. 

Bloomberg said the UK would need to fire up fossil fuel power generators due to the gap in wind power that will persist through Thursday. 

It’s not even the middle of winter, and the UK’s grid is already at risk of failure. This doesn’t bode well over the coming months if winter is harsh. 

Authored by Paul Joseph Watson via Summit News,

Moroccan football fans celebrated their World Cup win over Belgium by staging chaotic riots in numerous different European cities.

Diversity continues to be a strength.

Morocco beat Belgium 2-0 in Group F yesterday, which many regarded as a shock result given the quality of the Belgian team.

Whereas some would expect the result to have prompted friendly and good-natured celebrations, Moroccans used it as an excuse to loot shops, burn vehicles and attack police stations in Belgium and neighboring Holland.

Multicultural Belgium is home to around 500,000 Moroccans, some of whom reacted to their team victory by rampaging through the streets.

Bruxelles. pic.twitter.com/ASIOE4GzAk

— AhmedMONE9🇵🇹 (@ach1090) November 27, 2022

“Police deployed tear gas to disperse fans following the victory, but rioting went on into the evening, resulting in a number of additional vehicles being set on fire,” reports ReMix News.

Quelques heurts après la victoire du Maroc face à la Belgique à Bruxelles. C’est chaud 🔥🔥 #FIFAWorldCup   #molenbeek #BELMAR #Qatar2022 pic.twitter.com/JZxGFTa9nt

— Medave Prod (@medaveprod) November 27, 2022

#Bruxelles #Belgique : Des marocains ont incendié un véhicule pour célébrer la victoire du Maroc contre leur pays d’accueil #BELMAR #Maroc
Source : SnapMap pic.twitter.com/9cRcq3IjdN

— Alex (@AlexLeroy90) November 27, 2022

Eight people were arrested in Antwerp, while police in Brussels were forced to deploy water cannons and tear gas in an attempt to quell the rioting.

It’s not over yet in #Brussels. 🇧🇪🇲🇦 pic.twitter.com/srCdo6bdlZ

— Yassin Akouh (@Yassin_Akouh) November 27, 2022

However, the unrest was not limited to Belgium. Over the border in the Netherlands, vehicles were torched in Amsterdam and rioters in Rotterdam attacked police with fireworks, causing multiple injuries.

“I condemn in the strongest terms the incidents of this afternoon,” said Brussels’ mayor, Philippe Close.

“The police have already firmly intervened. I therefore advise against fans coming to the city center. The police are doing all they can to maintain public order. I have ordered the police to carry out arrests of the troublemakers,” he added.

Another clip shows a violent mob attacking an ambulance.

Voici des images de #Bruxelles après la victoire du #Maroc contre la #Belgique.

Magasins pillés, sapins des Noël brûlés, forces de l’ordre attaqués, etc …#CoupeDuMonde #Mar #BEL pic.twitter.com/pXuz74Zc4K

— Limongi Quentin (@LQuentin_) November 27, 2022

“This was not a party,” said Claire Martens, VVD party chairman in Amsterdam. “These are guys who think they are in charge of the streets and not the police. We cannot accept that. Why did the (authorities) intervene so late? How are we going to prevent this next week?”

As we previously highlighted, migrant youths also reacted to the lockdown in Belgium by staging riots.

The most popular name for newborn babies in the de facto EU capital of Brussels is Mohamed, with Islamic names making up 43 per cent of total registrations in the Belgian city.

Earlier this year, Belgian leftist leader Conner Rousseau caused alarm amongst his own political allies after admitting that multiculturalism had failed.

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