Having once been the happy owner of a 13.75% mortgage -- obtained through a state program for first time home buyers at a time when the bank was advertising 18% -- the inflation rate of the early 1980s is not something for which I'm nostalgic. But for those longing to bring back the days of Ronald Reagan, this should warm those cockles.

U.S. wholesale prices took another unexpectedly steep jump in July and shot up at the fastest year-on-year rate in 27 years, according to a government report on Tuesday that was certain to fan fears about a potential surge in inflation. ... The Labor Department's Producer Price Index, which measures prices at the factory door, climbed 1.2 percent after a 1.8 percent gain in June.

"Core" inflation, for those people who don't use energy or eat food, was also up sharply, while home building took another plunge. The decline in gas prices next month will probably cool things down a bit, which is good, because if we continued at an average of the last two months we'd be looking at an 18% annual rate.

But be of good cheer! So far wages aren't coming close to keeping up with this new round of inflation, so that traditional "price-wage-price" spiral is only "price-price-price." That's better, right?

The Wholesale Price Index (WPI) went up 1.2 percent last month, a huge jump. It amounts to, at this point, close to 12 percent per year. It will show up in retail prices at various times in the coming weeks and months, depending on the item being manufactured. The increase is likely to be multiplied by the time retail pricing is set.

Some of that is because of fuel prices but not all and, some say, not even a lot.

Prices going up in a big way while wages are stagnant or decreasing and unemployment is increasing? Does that make any sense at all?

(Editor's note:  Ok, we have a winner! Out of the entries received, I am going with jfromga's pick.  Sorry no prize..hrmm, maybe in the future I should hold a contest? Anyways, congratulations jfromga!)

For anyone whose read my pieces in the past, knows that I hold a certain disdain towards former Reagan White House OMB Associate Director/conservative-libertarian Ayn Rand acolyte Larry Kudlow.  It's nothing personal against the guy, it's his ideas and economic policy objectives that I find fault with.  For the past couple of months, he's been going on about this is the "Goldilocks economy."  Essentially, that we're worrying about nothing because one bad economic indicator is being offset by a good one (mind you, he's often just used productivity as that one).  Well today, despite his claims that all is almost well, we got some news that just proves Larry Kudlow wrong!

Below the fold are excerpts from various reports I read today trying to understand why the future of Social Security and Medicare is such a problem and what the possible solutions might be.

Each party has an intrinsic interest in keeping their bases happy. The Republicans promise more Tax cuts and the Democratic party promises universal health care for all.

While both promises are great for getting politicians elected, neither is possibile without seriously harming our nation's future. Read on to find out why.

John McCain and Barack Obama testified before a large audience of Southern Baptists at the Saddleback Church in Orange County, California. They also used up a large chunk of prime time television.

It's not the debate that irks me a little; it's the idea that somebody's religious views are pertinent to the kind of leadership the country needs to get over the unholy mess created by our born-again President.

How about settling first on what's important in making a person "religious?" In the same way wearing a flag pin doesn't make someone patriotic, believing abortion is a sin doesn't make somebody Christian. After all, the views of fundamental Muslims and fundamental Christians regarding drinking are identical, as are the prohibitions on pork by Muslims and Jews.

I propose leaving religious debates to religious leaders and their followers and allowing the TV producers and their anchors to concentrate on the truly important rapes, murders and sporting events by which they uplift and enlighten our lives.

    It is becoming more apparent with each passing day that the American lifestyle as it currently exist is unsustainable. For more than three decades we have accepted the false narrative that we can live beyond our means and there will be no cost for the extravagance. Not only has our government accepted and promoted this falsehood, but we as a nation have accepted it as well. It has become so ingrained into our national psyche that anyone who dares to point out its inherent flaws is immediately ridiculed by politicians, the media, and their fellow citizens. You see rather than looking at the real culprits of our failed domestic and foreign policies we want to create these "bogeymen" who want to destroy our sacred way of life. The truth is that it is always easier to blame others for our shortsightedness and faults.

Greetings ladies and gentlemen to the latest episode of Manufacturing Monday. Couple of interesting things to discus today, and some interesting numbers to watch this week.  First we have what appears to be a new take on price fixing by manufacturers.  Next we explore the recent collapse in the price of grains. Our last piece is a story from the Financial Times where companies and groups are hiring the very element that help drive up their costs, speculators, to well...sorta fight speculators.  Kinda reminds me of those old westerns where they hire a gunfighter to take on the baddie.  Finally, as mentioned, there are numbers we're watching, the Producer Price Index being released tomorrow, Jobless claims and the Philadelphia Fed Survey on Thursday.

More, much much More of this... In Denver, after Denver, every day please.

"My opponent John McCain," he said as the crowd began to boo, "John McCain, you know, he has been talking about how he puts country first, but I have to say it is not an example of putting country first when you say that George Bush’s economic policies have shown great progress. He said that just a few months ago -- that, you know, we made great economic progress under George Bush. Then he started running ads saying 'oh, Obama just going to raise your taxes and he will lead to an economic disaster.'"

"Mr. McCain let me explain to you, the economic disaster is happening right now," Obama continued, "maybe you haven't noticed!"

McCain is such an easy target... it's all low hanging fruit.  This is all a decision on Obama's part.  Get real tough or stay on vacation.  I think Obama has seen the polls and hopefully the real tough Obama is now here to stay.

Do you remember the proposed $7500 tax credit in the new housing bill for first time home buyers?  Well, turns out it is really an interest free loan, and not a true credit.  More on this below.

In case you missed it, Barack Obama's historic grassroots fundraising operation passed a huge milestone last week: two million donors. It's people like us, the ones giving $10 and $20 at a time, who allow him to run a truly publicly financed campaign while enjoying even greater monetary advantages than his opponent, a candidate funded by special interests and lobbyists.

Ed Prouty of New Hampshire was the two millionth person to donate to the campaign. He's a contractor who specializes in HVAC, and since I used to work for a plumbing and HVAC supplier in the area, I feel like it could've been me. It could've been any of us.

His reward? A phone call from Sen. Obama himself, thanking him for the contribution.

You are going to have to do it yourself.

  The one thing I've consistently seen on the progressive web sites whenever someone points out an economic problem is an attitude of, "Just wait until Obama gets in. Then he'll fix this."

 This is delusional thinking! It's as bad as the mindless, head nodding of the Republicans when Bush told them that people hated America "because of our freedom."
 For instance, there is talk of a "New New Deal". Obama is promising universal health care.

Where exactly is this money going to come from?
  First of all, we need to get a grip on what we are facing.

From IBD:

It's the 5th bank [Wachovia] to agree to repurchase auction-rate securities under pressure from federal and state regulators who said the banks misled investors. It'll buy $8.5 bil worth that investors couldn't sell. Citi, (C) UBS, (UBS) JPMorgan Chase (JPM) and Morgan Stanley (MS) also have agreed to buy back the securities. N.Y. may sue Merrill Lynch over the issue and is probing Fidelity and Charles Schwab. (SCHW)

Here's an interview I recently did that I thought might raise some good discussion here.

As we mercifully approach the end of the Bush Presidency, the pundits will mercilessly begin the process of evaluating his Presidency.  He has failed in so many areas such as foreign policy, diplomacy or lack of it, respect for the constitution and rule of law, the economy, trade and social security to mention only a few, that it is a challenge to know where to begin.  Since the President recently intoned with great bravado and chest-thumping that the fundamentals in the economy are sound, it sounds like a good place to start.

What happens when Income is less than Outgo?

one word: Recession.

[US Inflation Trend: All Items]
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What's a Working Class citizen to do?

His Time is Short
By David Glenn Cox

Were the US economy a patient in a hospital, this is the part when the doctor walks out, shaking his head, and talks to the family. "I’m sorry, we’ve tried everything that we know to do. We’ve cut interest rates three times and we can’t cut anymore. We’ve put the banks on respirators to keep them functioning, but it's done no good. We’ve even pumped in rebate checks to get money circulating back into the economy, but the effects were only temporary. The body just used them to pay past-due bills."

In my opinion, recently, the public debate has been sideswiped by discussion of foreign affairs and national security issues.

The Georgian false flag has been dropped...we are sinking into crisis mode and the fearmongers and flagwavers are out and about.

In this climate, we have stopped debating universal healthcare, and also talking about poverty.

I have not seen one commercial about Obama's healthcare plan, since the end of the primaries.

This isn't the a major current issue but it was brought up in tonight's... whatever it was. So!

Merit pay for teachers is a stupid idea. Yet another one which is popular among the uniformed. It's also an easy way out as it provides a convenient someone to blame.