A friend recently sent me a link to an article about the precarity of the US Social Security system. The headlines read:

Social Security’s Finances Erode Further, Risking Benefit Cuts

The nation’s key program for retiree benefits continues to see financing shortfalls. Unless Congress acts, those drops could lead to payment cuts in eight years. [NYT 6/18/25]

Photo courtesy Pixabay

Of course it scared her. She noted: “Not good news for us old folks.” I had to respond: The solution is either to find remedies or go broke. 

I am not as worried as my friend. I don’t think any politician will be willing to reduce payments to current seniors receiving benefits or to those soon to receive benefits. That would be suicide. (Voter participation by age; Voters by age group Table 1) 

On the other hand, I do hope that eventually (actually sooner rather than later) our legislators will have enough sense to do one or more of the following (and it will need more than one): 

2025 is already upon us, and it’s time to update the M&Ms Inflation Index. Like some of you, I remember when a 1.69 oz packet of M&Ms was 5 cents. Yes, that’s back in the 1950s. Today, the price of that same packet has gone up to $1.79. 

For you mathematicians, that’s a whopping 3,480%! And that means the dollar’s purchasing power has gone down in the opposite direction, maybe something approaching the same amount only in reverse.

M&Ms are made by the Mars Company. (By the way, the Mars family has quite an interesting history.) They have made it a point to offer the 1.69 oz packet since the company began to make them, come hell, high water, or monetary inflation. Of course they also understood that a variety of sizes and prices can please the public, so you find their products in a plethora of different packaging.

So for the economists among you, here below I have updated the chart for the 1.69 ounce pack:

Here’s a chart giving the price of cocoa for the last five years, from TradingEconomics.com:

The price has risen about 340%in the past year and a half – quite extraordinary, and most probably not just due to monetary inflating of the money supply.  J.P. Morgan has what I judge to be a reasonable explanation of the cocoa phenomenon. They describe the causes of the increase in the price to be mostly due to local economic, political, social, and market pressures, not linked directly to monetary inflating, other than on the retail downstream product level. One supposes that the local and international devaluation of money through monetary inflating could indeed bear some responsibility, but it's difficult to determine how much.

 We’ll just have to see, if and when the farming problems are solved, whether the price goes down. Cocoa prices have indeed subsided a bit, but on the retail M&M level will the reduction be reflected in your M&Ms? What’s your bet?

What trajectory did the US gold reserves follow in the last century?

Below is a World Gold Council chart that might be accurate, although there is some debate today about exactly how much of the US gold reserves are accurately accounted for. Some say a portion of it is no longer there, some say that a percentage has been used in financial transactions that would involve claims to some of it. But the chart is probably not far off.

You can see that gold began leaving the country starting in the mid-1950s. By the end of that decade a few wise financial advisors were recommending investing extra savings – i.e. savings one could afford to risk – in numismatic gold and gold stocks. (It was illegal to hold gold outright.)

The reason was that the gold standard kept the official dollar price at $35, but there was so much dollar inflating going on that foreign countries were smart enough to get gold instead of holding onto dollars (which dollars had been received in payment for imports), and this was causing the unofficial market gold price in dollars to rise.

That’s why in 1971 Nixon probably looked at a similar chart and finally said stop, no more, we’re “closing the gold window.” And that’s when the dollar price took off, as wise advisors had predicted it would. More accurately, that’s when the exchange rate for dollars plummeted and price inflation in the US began to explode. (Yes, price inflation can be late to the party, but it always follows a period of monetary inflating.)

Someone recently asked me to explain the term “Stagflation."

Some of you probably remember the Nixon years, the early 1970s. This is the period when Stagflation was flagrant. It’s simply the combination of two words, stagnation and inflation.

My electric bills have been going up for the past few years, so I decided to analyze the data to figure out what was changing. Was it the consumption? Was it the per kWh charge? Was it the taxes? Maybe the service charge(s)? Or something else?

The consumption was pretty predictable and regular. Interestingly enough during these inflationary times, the per kWh charge was exactly the same over an eight year period. Taxes and other state charges didn’t seem to be modified very much, and the monthly service charge was also unchanged.

So where is the culprit?

In California, they have come up with what was supposed to be a credit to our account due to the use of renewable energy. They must have thought that renewable energy sources would provide less expensive electricity. 

Starting in 2016 in our case, this line on the bill was a very tiny credit. But as time has gone by, that column has morphed into a charge climbing steeply. See the result on my chart below.

This “Energy Cost Adjustment” has become a way for the company to increase our price while maintaining the per kWh rate. Perhaps they’re just trying to deal with California’s crazy laws, but it’s still VERY SNEAKY, don’t you think?