Post 356: 35 Years of Easy Money and the Generational Wealth Divide

• A Wall Street Journal article looks at how older Americans are significantly wealthier than the next generation.
  • Spoiler alert, it’s a result of bad policy.
• As cocoa bean prices soared, chocolate consumption fell.
  • Now it’s the bean prices that are falling and government imposed minimum prices are causing an inventory glut.
• Amazon sales continue to soar.
  • Especially in web services.
• Inflation in the US continues to fall: Disinflation.
  • But beef prices continue to soar.
• Core inflation numbers in Canada also fell.
  • But food prices are getting out of control.
• We take our first look at Dallas-Based Wing Stop.
  • Sales were extremely strong until early last year and now they are falling at an accelerating rate.
• Meanwhile, McDonald’s has turned things around with its value offerings.
• After eight quarters of significant sales declines, Deere Corporation has really turned things around with two quarters of accelerating sales growth.
  • And its share price continues to grow much faster than its sales.
• In Financial Ructions:
  • Financial conditions have been accommodative since 1991.
    • Yes, it’s the Fed.
• In our Book Review section:
  • We start reviewing a new book.
    • False Dawn by George Selgin
      • The book is about the impact that Franklin Roosevelt’s New Deal policies had on economic recovery.
  • In chapter 1 Selgin starts by telling us it was the first major downturn that the government attempted to fix: First Hoover and then Roosevelt.
    • PM: In my opinion, it’s not a coincidence that it ended up being the deepest and longest downturn in American history.
  • In chapter 2 we see that the New Deal was not in FDR’s mind during the election campaign of 1932.
    • And FDR even criticized Hoover for his reckless government spending.