If Disney is Doing it, it Must be Bad…
Despite protests to the contrary, inflation isn't a thing of the past. Companies are still raising prices, and governments are still encouraging inflation...
Perhaps it’s not representative of the whole economy.
But it is telling.
And, in our view, it helps prove a point.
The point is that as much as the mainstream would have you believe it, inflation hasn’t gone away.
It’s still here, and who knows, maybe it’s even getting stronger.
We’ll share our reasoning on that idea here today…
Bloomberg headlines with, ‘Disneyland Raises Prices by About 6% for Most Popular Days’.
A 6% increase isn’t an insignificant amount… not on prices that are already at the high end.
The Bloomberg story continues:1
‘Walt Disney Co. is increasing ticket prices for its two Southern California theme parks by about 6% on most days.
‘The most expensive tickets — typically weekends and holidays — are climbing 6.2% to $206 a day, the company said Wednesday. The lowest-priced admission, available for at least 15 days in January and February, will stay at $104, unchanged since 2019. The Disneyland and California Adventure parks have seven pricing tiers in all. The new prices take effect immediately.’
Aha! But its lowest price admission hasn’t changed in five years. Surely that’s proof inflation can’t be that bad.
We believe the phrase there is that Disney is ‘throwing the public a bone’.
It’s no surprise that the January-February period is, by Disney’s own admission, one of its two least busy periods of the year. From Disney’s website:2
‘Mid-January through mid-March is another time when potentially lower crowds are expected.’
The other less busy period being mid-September to mid-November.
Anyway, the point is, for all the talk you hear of the Federal Reserve and other central banks beating inflation, the reality is different.
Prices are still going up. Granted that some are still playing ‘catch up’ after resisting raising prices. But the result is the same.
But that’s not the only proof we have.
Again, from Bloomberg:3
‘Ever since President Xi Jinping sought to draw a line under China’s slowdown last month, investors have clamored for him to back up monetary easing with a powerful fiscal stimulus to help fuel one of the nation’s biggest stock rallies in years.’
China will stimulate its economy. Just as it has done for the past 40 years.
And the West is no different. The clamouring for stimulus in China is the same as the clamouring for stimulus in the West.
The Chinese and Western economies aren’t much different. Both are the product of government spending, manipulation, and central banks providing easy credit.
They are also both centrally planned… albeit to different degrees.
We wrote recently about how the markets are starting to think about the world’s economies completely avoiding a recession. The only way that can possibly happen is if there is more inflation.
All the signs are there. It’s what they’re pushing to achieve.
The lack of a recession may seem like a good thing… but the cost will be a longer inflationary cycle… where the majority of the public will suffer greatly.
Gold remains high. It may be the best, perhaps only, protection.
We look forward to seeing you back here tomorrow.
Kris Sayce
Editor, Crack of Doom
Issue 43 of 10,000
(We believe in the importance of setting goals. And we figure what better way than to set a big goal from the beginning. If all goes to plan, our final issue of Crack of Doom will be sometime in the 2060’s!)
Disclaimer: The content provided in this communication is for informational purposes only and is not intended as financial advice. The information is provided "as is" without any representations or warranties, express or implied. We do not offer financial advice through this communication. You should not rely on this information as a substitute for, nor does it replace, professional financial advice. If you have specific questions or need financial advice, please consult a professional advisor.
Thomas Buckley, ‘Disneyland Raises Prices by About 6% for Most Popular Days’, Bloomberg (Web Page, 9 October 2024) <https://www.bloomberg.com/news/articles/2024-10-09/disneyland-raises-prices-by-about-6-for-most-popular-days?srnd=homepage-americas>.
‘Theme Parks - Frequently Asked Questions’, Disneyland Resort <https://disneyland.disney.go.com/faq/parks/best-time-visit/>.
‘China Markets Warn Xi That More Stimulus Is Needed to Fuel Rally’, Bloomberg News (8 October 2024) <https://www.bloomberg.com/news/articles/2024-10-08/china-markets-warn-xi-that-more-stimulus-is-needed-to-fuel-rally?fromMostRead=true>.