8.5% Inflation: New 40-Year High
The latest CPI (Consumer Price Index) numbers just came out for March, reaching a new 40-year high of 8.5% inflation. This is the fastest yearly rise since 1981, and is up from the 7.9% annual rise recorded in February. Rates have been above 6% for 6 months now, with no end in sight.
The CPI is a weighted index of a basket of assets that the Bureau of Labor Statistics considers “average consumption” across America. According to the data on the official report, energy (specifically oil) accounted for 32% of the rise.
Flight prices are up 23.6% compared to last year, which could be partially attributed to this rise in oil prices (as the WSJ noted if you think it’s expensive to fill up a car right now, imagine filling up a plane!). Used car prices, although seeing a decline since last month, are up 35.3% on the year. Meat prices are up 14.8% and cereal prices up 9.2% since last year.
Avik Roy observed that these latest numbers understate the impact on lower- and middle-income Americans:
“If you’re wealthy, you’re far more likely to be a beneficiary of inflation than a victim of it. Home prices appreciated 20% in the last year, which means that if you owned an expensive home, your net worth went up far more than your daily expenditures did. … Lower-income Americans spend a greater share of their earnings on everyday necessities, relative to higher-income Americans. That means lower- and middle-income Americans are harmed more by inflation than the wealthy.”
He also pointed out that these official measures of inflation are geared toward describing the consumption patterns of the average American, and asked the question: What happens if you’re not average?
Avik Roy also wonders whether inflation is worse than we’re admitting, due to some mathematical gymnastics in how the rate is calculated:
“About one-third of the CPI-U’s market basket is based on surveys related to home prices. But while home prices appreciated 20% in the last year, the government’s official measure of housing inflation is only up 5%. In other words, if the government used a more accurate measure of housing inflation, CPI-U would be 13.5%, not 8.5%.”
It’s very clear that these numbers are not “transitory”, as politicians insisted they were for the most part of last year. This is a permanent decrease in the purchasing power of the USD, and will likely get worse.
So what is driving this inflation? A popular narrative right now is that Russia’s invasion of the Ukraine is behind this surge in prices.
Adorable that many people believe this narrative.
Obviously the experimental monetary policy of the Federal Reserve and obscene amounts of money-printing to finance ever-increasing federal spending and debt has greatly reduced the value of the USD, and trying to rein it in could cause a recession in the coming years.
In a note written to clients from Moody’s, an American analytics and credit rating agency, Chief Economist Mark Zandi wrote:
“Odds the economy will suffer a recession beginning in the next 12 months are one in three and rising.”
Hold on tight.
Is this what Justice looks like?
Virgil Griffiths, the Ethereum developer charged with violating international sanctions by speaking at a crypto conference in North Korea, has been sentenced to 5 years in prison. He pleaded guilty to breaking US national security laws in 2019, and on top of the 63 month jail term received a $100,000 fine.
He was officially charged and sentenced for “conspiring to violate the International Emergency Economic Powers Act (IEEPA') by providing services to the Democratic People’s Republic of Korea (DPRK or North Korea) including technical advice on using cryptocurrency and blockchain technology to evade sanctions”.
The North Korean regime is no stranger to cryptocurrency. North Korean hackers have long been involved in major crypto heists, and this predates Griffiths’ Pyongyang speaking engagement. Further, there was nothing that Griffiths shared at the conference that was not already available on the internet for free.
As we have previously reported, Virgil is a major contributor in the crypto space, and many people advocated on Griffiths’ behalf prior to the sentencing. Vitalik Buterin said that Griffith “left a lasting legacy in the Ethereum Foundation and the wider community”, and also on Buterin himself.
The New York Federal Judge who handed down his sentencing, Hon. Kevin Castel, was not convinced:
“Virgil Griffith has no ideology. He'll play off both sides, as long as he is at the center.”
Meanwhile TD Bank recently got a 100k fine for 1000+ North Korea sanctions violations, while Griffith got a 100k fine and 5 years in prison for speaking at 1 crypto conference there. The judge was open about using this sentencing to set an example that would "deter the defendant and others from similar conduct in the future." He also cited the war in Ukraine and current sanctions against Russia as a reason for wanting to set a precedent with this case.
Heaven forbid those forced to live under totalitarian regimes learn to use crypto as a tool of emancipation.
Patience is a Virtue
The long awaited Ethereum merge that will transition the network from a Proof of Work to a Proof of Stake model is going to take just a little more time, according to core developer Tim Beiko.
The merge will allow Ether holders to secure the network by staking ETH, and this will cut energy costs by 99%. It was originally expected to happen this June but is now being pushed to sometime in the Fall.
The complexity of the moving parts has led developers to be slow and careful with this transition, especially as billions of dollars are on the line. After the transition is complete, the Ethereum roadmap will shift focus to improving network throughput, to hopefully start to alleviate high gas fees.
Elon’s Twitter Rollercoaster
Elon Musk has decided against being on the board of Twitter, and instead offered to buy 18% of Twitter’s stock and take the company private.
In an interview Chris Anderson during TED2022: A New Era, he explains that he believes overhauling Twitter is vital to democracy:
"It's damn annoying when someone you don't like says something you don't like. That is a sign of a healthy, functioning free speech situation."
Saudi Prince Alwaleed bin Talal Al Saud, billionaire and major shareholder of Twitter, rejected the proposal Musk filed with the SEC.
Saudi Prince Alwaleed bin Talal Al Saud’s tweet
Saudi Arabia ranks as one of the worst countries in the world for press freedom.
Regardless, the corporate media seem to be cheering this pushback, and moving in lockstep to denounce a Musk takeover, openly advocating for continued censorship on the platform.
As Greenwald observed, no one likes to admit that they favor censorship, and so euphemisms like “content moderation” are the preferred lingo of the modern era. Major media corporations are proclaiming the loudest how this content moderation is essential, and they’re no longer pretending that it’s to save lives — it’s now openly admitted that it’s just to prevent wrong-think.
Much has been made of Elon’s “billionaire” status and how bad this would be for freedom of speech. The fact that Bloomberg and the Washington Post are so loudly on this bandwagon reflects just how lacking in self-awareness the media really is.
By Will Sandoval, NBTV Associate Producer, and Naomi Brockwell.