So we got really hot consumer price indexes this morning–darned near double the consensus estimates.
Really with the CPI at .9% and even the core CPI at .9% you have to assume that the rate of inflation is more than transitory–and even if these huge increases are transitory I would assume that inflation in the months later this year and into 2022 the CPI will be running double the Federal Reserves 2% target.
I initially though that both stocks and bonds might react more sharply than they have today–the 10 year treasury jumped a couple basis points to as high as 1.42% and then promptly started lower and now at 1.36%. I guess hot inflation is simply a yawner to bond buyers with no where else to go to earn a couple penny’s.
As I mentioned a week or so ago until we see true reductions in bond buying by the Fed I don’t think rates are going higher–inflation or not–the demand is simply overwhelming.
So far, for now, we continue to play the same investing games–have a base position of 60-70% invested and playing the dividend capture and ‘flipping’ new issue game with free cash. That has worked spectacularly so far–I can’t even whine about the low coupons because if I can squeeze a 1 or 2% gain out of new issues what do I have to complain about? Even this month, which is likely to show more modest gains, it still looks like I can get a 1/2 to 3/4% increase in assets–whats to complain about?
71 thoughts on “Transitory?? Doesn’t Seem Like it”
House prices are up over 100% in the last 10-years, that’s 7.5% annualized, this is not reflected in the CPI’s silly rent equivalent calculation.
If inflation is transitory is inflation in asset prices transitory too?
I believe that there are three reasons that inflation will persist:
The inflation indices include the cost of housing to about 40 percent of the index yet the housing index lags increases in housing prices.
Instead of importing deflation like we have for the last 15 years, we are now importing inflation from China. Note that China is actively trying to fight their inflation by selling commodity reserves which can’t continue forever.
Third is wage inflation. Since we now have an effective minimum wage rate of at least $15, it will be reflected in prices.
Since the first casualty in major conflict is truth, perhaps the second is semantics as Orwell suggests. The term “infrastructure “ will never be the same. Now Larry Fink suggests that inflation should be distinguished between bad inflation and good inflation or wage inflation.
Finally, am I the only one that suspects that Biden’s new offensive on competition will be used to “jawbone” price increases: announcements of price increases will be deemed to be evidence of non-competition?
And wage inflation is only going to get worse as the workforce shrinks from baby boomer retirements. the peak years of the baby boom in the 1950’s are hitting Social security age right now and the retirements outpacing new entrants to the workforce is going to continue for a few more years.
We’re a long way from full employment. What cynics call the “real” unemployment rate (U6) is 9.8%. It could go higher as the recovering economy pulls more people into the labor force.
Even pre-pandemic, folks like Kashkari were saying we weren’t at full employment. Although he’s much derided for being unorthodox, it looks like the consensus continues to inch toward Kashkari’s worldview. The monetarists who have been screaming hyperinflation since 2010 will never admit being wrong and are finally having their moment in the sun. It will likely be a brief moment.
See the “The End of the End of Inflation” by Cochrane. An interesting discussion.
“For 25 years, inflation has seemed stuck on a downward trend. Those of us who worry about inflation seemed like end-of-the-world sign holders who couldn’t leave the 1970s behind. It’s hard to buck the trend. A famous economist advised me to give up studying inflation—inflation is 2 percent, he said, that’s all you need to know. ”
This guy reminds me of the perma-bears and doomsdayers who got so excited about being right for a hot minute in March 2020.
If you’re not familiar with Dr. Lacy Hunt, here’s a decent intro:
As far as data is concerned, the Hunt presentation is a great orientation to velocity issues which I have been trying to find. I found his conclusions somewhat stilted or strange and am not sure how his presentation supported them.
I also wonder about the relationship between velocity and the loan/deposit ratio. He implies causation based on correlation and a marginal revenue product analysis that seems derivative from the correlation. If anything, his charts on velocity would suggest that velocity has never been lower and is bound to increase, perhaps prompted by an increase in lending. That would seem to suggest a rise in inflation.
I wished he had said more about the rise in reverse repo’s. He implies that the Fed’s accomodation of reverse repo’s avoids negative short term rates. I am unclear how that works.
Thanks for the link
See Napier article that examines velocity with conclusions opposite to Hunt.
I stop reading whenever anyone mentions monetary velocity. It’s a ridiculous Keynesian/Monetarist concept that has been thoroughly discredited by the Austrian School, but of course the mainstream talks about it like it is a real thing. Here’s a primer: https://mises.org/wire/problem-velocity-money
The reason inflation has been “low and falling” for decades is because government has been continually redefining (ie lying) it down to harvest the difference between real inflation and reported inflation. Inflation has been continuous since the 60’s. They could hide it in CPI through redefining it but couldn’t hide it in the price of metal which caused them to remove the silver from dollars in the 60’s and break the link with the dollar in 1971, which of course was the link for the whole global currency system at the time. Since then it has been all inflation, all the time. Mr. Hunt and Mr. Napier are extremely intelligent but have to be respectable and speak in the language of the mainstream, but the velocity arguments don’t hold water. Even so, I do agree with Mr. Napier’s conclusion.
The reason inflation is so big now is because its getting so out of control they are having trouble manipulating it down. Be prepared!
Quantitative Easing (QE) is deflationary as it slows the velocity of money.
Technology is deflationary as it robs from employment.
Demographics are deflationary as society ages it consumes less.
For inflation to occur:
You need an exceedingly tight labor market with employers head hunting talent. This is happening but only in specific limited industries.
You need loan growth/bank balance sheet expansion. Loans create money. No bank is going to lend with 9% unemployment.
You need consumers/businesses to spend money today no matter the cost thinking tomorrow the prices will go up substantially. Presently only thing going up in input costs and inventory. (Consumers are rejecting higher prices)
A few months back, a large group of posters here, many on this very thread, were freaking out about higher rates and predicting they would just keep going up and how everyone needed to get defensive and take interest rate risk out of their portfolios. From what I can recall, I was the ONLY person here advising against that. Instead, I was buying OPP-A as low as $23.20 or so (now at $24.95 with a coupon paid out). Many here instead were selling at the lows.
So here I am today, having been the only person to expect the recent decline in yields, still trying to explain to you all how the actual economy works, and I get a crowd of politically motivated bashers telling me I’m the politically motivated one. It’s all so precious.
Glad to know we are keeping you entertained.
Thanks Karma, I value your opinion. I think you are a one of a kind investor that understands where the market is going, rates and risk analysis, what to invest in at the right times, and an economist that interprets the overall impact to investing. I have been searching 20 years for an economist that actually gets it right, and my search is over, as I am following your advice. I am finally making some money this year. On the OPP-A alone I made enough for a few steak dinners. Many thanks!
” I have been searching 20 years for an economist that actually gets it right, ”
Your search is over. Read Lacy Hunt.
Please take your victory lap (figuratively speaking) as you deserve it, IMO. You were and are, correct – regarding your posts on inflation. The facts are, well, the facts… and that’s the problem. In the face of the cancel culture activists, pump and dumpers, and dinner $ flippers – you stood your ground and made your case regarding inflation and investing. The reactions to your postings yesterday/today, further affirm just how right you are. When the reactions and deflections are substantially out of proportion with the actual subject matter, you know you’re over the target of truth. Some forums are lauded for being open, that is, until you dare step out of line and post opposing herd views.
Hat tip to you, my friend.
Oh wow, thanks for the reminder we peons here are blessed to be in the presence of greatness. We are so lucky to be graced by the presence of “The ONLY person” who understands investing and how the economy works.
Please, we look forward to your new words of wisdom and market guidance with bated breath
Leonard Cohen said it most simply: Everybody Knows. That the Fed is an enabler of the current governments Biden’s Bankrupt America Plan. People like to forget that the US has already been downgraded from AAA to AA….next stop is V for Venezuela.
The Fed will not react to inflation for the same reason it will never raise interest rates. They’ve successfully annihilated a passive middle class over the last 13 years. And for some reason, the middle class has done nothing tangible to reverse its decent into oblivion.
Wait until Congress seizes up over the next debt ceiling hike. And remember the reason for the downgrade was the hostage taking in Congress over the debt ceiling negotiations. Though the partisan control has switched since then.
So if the next debt ceiling bill is filibustered or filled with poison pills, I can easily see S&P downgrading again to a single A.
The other thing that might give rise to a downgrade is the federal tax collection as a percentage of GDP is the lowest of any sovereign with a AA rating.
What is important in this inflation debate is what each investor believes in and acts on. Each investor will have to listen to all of the arguments and decide where to place their bet.
1) If you believe that inflation is here to say, say long term greater than 3% and increasing, then all of your fixed income investments will likely suffer capital losses. Bonds, preferreds and baby bonds in particular will suffer as interest rates increase. (I will ignore common stocks for the time being.)
2) OTOH, if you think that inflation is transitory and will fall back to <=2%, then your fixed income investments should be fine. No reason to take any action.
It appears that inflation being transitory or not has evolved to a political partisan type argument. I am doubting that anyone's mind will be changed by any argument that is presented. So don't waste your time. People are gonna believe what they believe and ain't changin their mind. .
As an investor I don’t predict the future as much as I react to the present. Sure I have opinions but always remember the cardinal rule of investing, “Don’t invest based on emotion.” Which is what political and social debates are largely about. We need to filter that part out when making investment decisions.
People love to have it both ways. They want to believe one thing due to their politics but then invest the other way because they actually want to make money.
The fed is more focused on climate change and equity to consider long term inflation ramifications to those least able to deal with higher prices!
10 year inflation expectations are 2.33%. I’m guessing the bond market is smarter than any of the talking heads on CNBC. If we actually achieve 2.3% inflation over the next 10 years, that would be more desirable than 1.7%.
Btw, the Fed isn’t buying TIPS, so inflation expectations are not distorted. If anything they’re overstated as the Fed is artificially depressing regular Treasury yields in comparison to TIPs, raising breakevens.
Oops, actually lower 10 year yields would lower breakevens. So, Fed purchases would distort that rate.
“Indeed, as BofA found in a separate report published overnight, such negative payback scenarios could lead to substantial transitory disinflation over the next year that could bring broader core inflation below target, despite improving persistent inflation.
Finally, as to whether any of this data will impact the Fed’s actions, BofA does not believe this report changes much. As BofA summarizes, “transitory price pressures remain rampant in the core inflation data and could be nearing their end, with risk of a negative payback over the next year. Persistent inflation, reflected largely by OER, has improved although it is not signaling troublesome inflation.”
Have you bothered to look at the components that are causing the CPI to be so high? The biggest contributor is used car prices, which have had a once-in-human history surge due to huge demand from car rental companies, and supply problems due to a shortage of new car computer chips. How could you possibly look at that and think it will be an ongoing source of inflation?
I wanted grapes really bad over the weekend. I paid 6$/lb for grapes. The most i have ever paid for them, but I had to get my fix.
Then i talked to a few neighbors. One bought a new chainsaw for over $400 and he said last year’s model was $325. A used boat that is 2 yrs old is more than what it costs 2 years ago because you couldnt buy them so they are going for brand new prices. I had my driveway resurfaced for $1,800. I asked why so high? He said, go find a cheaper price if you can, you will be back. So I was back. He said noone wants to work for $13/hour. Workers want over $20+ /hour to work, so he has to pay his workers more than he did last year to keep them or he will lose them. I hear story after story on prices on anything. I had some friends come over, so i went out and bought ribeyes… i wasnt expecting to pay $21/lb, at the grocery story, but I did. Last year i paid $12/lb. Yep, maybe this is transitory, but it has been going on for a bit. But then again, i didnt look up and maybe definition of transitory is a decade vs a couple of months.
Yes, some prices are up. Culver’s raised prices and that really hits me where it hurts. But that doesn’t mean we have entered a never ending inflation surge.
Per CNBC – The latest inflation numbers surprised even the economists. This can be traced to the binge spending by the Biden administration. And they want to spend even more
And no it is not just used cars – lots of itens
Here are the items really driving up inflation:
Car rental 87.7% (y/y change)
Used cars 45.2%
Laundry machines 29.4%
Fresh fish 6.4%
New cars 5.3%
Rent (OER) 2.3%
As usual, there is likely no single reason, but a concantenation of events caused by spending of the the current and last administrations, pent up demand, and shortfalls in inventory.
Furcal – You win the Big Word of the Day Award…. spelled it wrong but I only know that because I had to look it up… concatenation – noun: concatenation; plural noun: concatenations – a series of interconnected things or events.
Thanks! Now I’m ready for my next spelling bee contest… I might even be able to use it in a sentence…don’t know the origin though.. lol I don’t thin ever think I’ve heard the word before… ah, what we learn here – Thanks, Tim…
Points off for spelling–glad you were able to discern what I meant . I think I first heard the word and looked it up when listening to an economist and commentator whose name escapes me now, but was popular during the oil crisis a decade ago. Canadian guy, I think.
Thanks for trying to expand our vocabulary. We can be a tough audience.
FWIW – I only knew what you meant because concatenate is a pretty common term in tech (esp. programming). It is also the name of a function in Excel.
Origin is Latin- Catena – chain, Catenarius- relating to a chain.
We now say catenary- chain like, a u-shaped curved line, etc.
I knew about concatenation & catenary, but looked-up the Latin root. Love words.
My wife and I will be traveling for a week in late August. The rate on the rental car will be more than 2 airfares combined. It’s almost as if Apple has taken over the rental car business. Wring every last farthing from the customer!
I hear you Bob – I have done and have planned a few trips – and the price of rental cars is ridiculous. Like you said, they are way more than both our roundtrip airfares Combined. The only option is you are lucky enough to figure out a way to game the system 🙂
Maverick, how can you tell how much inflation came from Trump spending vs. Biden spending? Both were record breaking. You must have some amazing analytical tools (or nothing but a political view).
I rely on the experts – and that quote came from economists on CNBC, not me. The only reason for you to try and dismiss it is because of your political views
The vast majority of Americans see significant inflation in costs in their day to day lives.
Lol, yes economists on CNBC are guaranteed to be unbiased, right?
I have no idea what is the political leaning of the economists on CNBC – but yes, economists on CNBC are more likely to be unbiased than you. Again, The only reason for you to try and dismiss any of this is because of your political views
Meanwhile, after the Biden regime burning through $1.9 trillion on the “American recue Plan”, an unnecessary boondoggle with tons of unrelated spending and political payoffs when the pandemic was basically over – which in itself was one of the largest spending plans in US history – now the Biden regime is back at the trough wanting $3.5 trillion in their budget reconciliation boondoggle AND another $1 trillion in a separate infrastructure bill. The $3.5 trillion alone is the size of the entire 2010 federal budget
If people think inflation is spiraling out of control now, just wait when this administration continues to light money on fire. Our kids and grandkids will bear the brunt of this money printing fiasco
To Maverick61 & KarmaChameleon; WOW, I never thought the day would come when I defended your comments. But I just can’t contain myself. You see by Karma’s comments that its nearly impossible to argue or make a point with a hard core DEM. I have given up on the idea. Anyone that trys to blame this rampant inflation on Trump is just plain crazy. Biden has been printing money like there’s no tomorrow and the result is this crazy inflation biting all of us on the ass. It started with gas prices but now has exploded to nearly everything. Case in point even something so simple as your car rental example. The big problem is we send people to DC that don’t even have a fundamental understanding of economics or finance.
Seeveral factors contribute to inflation. Government overspending going back many years along with loose Fed policy created a delicate economy. Biden administration inherited the problem and then poured gasoline on the inflation fire. BOOM!
Printing money is inflationary (“Don’t bother budgeting for it, we’ll just create money out of thin air.”) Since stimulus is typically done during a downturn the inflation is muted. Shutdowns are deflationary so covid emergency stimulus didn’t escalate inflation right away. The shutdowns ended and the money printing not only didn’t end it was extended to non-emergency spending instead of budgeting for it. Yellen and Powell enable the problem so we don’t get thrown into a recession.
I think you concisely summarized my thoughts better than I could express them. I do not see a single sentence in this discussion that inflation is being blamed on the previous president, so I do not why that was even mentioned. Likewise, anyone who thinks inflation started with the new administration is misguided. Aggravated it, yes that appears to be the case. Has anyone read on the leading cause why car prices are up? Has little or nothing to do with either administration and a lot to do with rental companies selling off their fleets last year and a shortage of chips causing a slow down in deliveries. How can this be blamed on a president again? But as mentioned, trying to have a rational discussion without someone bringing up politics is a fools game so I will quit my sophomoric attempts to temper the thread and go back to looking at Tim’s lists. Cheers, and may the force be with you. P.S grabbed some METCL at 25.38.
That’s a laugher.
good list but you left out lumber and homes 🙂
Biden is responsible? He must be WAYY hungry…enough to get a used car and drive pick up his own groceries! The markets are run by millions of decision makers, even shoppers. If you are forming decision driven opinions by listening to CNBC, good luck. They sell media time and eyeballs. Can you imaging trying to come up with that stuff EVERYDAY?
People use used cars to get to work everyday…pay me so I can show up!
Try on quiet thinking , slow methodical research and close scrutiny all by yourself for about a month. It’s a real challenge. Real returns are TOUGH.
This is NOT a chide but a method of success. Good Skills!
Aren’t those numbers mostly just a reflection of how poorly the economy was doing a year ago?
Have you shopped recently? Because if you have you would know the answer to your question is in the vast majority of cases they are not just a reflection of parts of the economy being shut down last year. An economist could do a price comparison between 2018 and now or 2019 and now and you would see virtually the same large inflationary increases in prices
A year ago airlines were begging people to fly and there was speculation one or more of them would go under. Why is it so concerning that prices have moved up 24% from that low point? Same thing is true with lodging and other discretionary items.
A more realistic approach might be to measure from where things stood in 2019, before a ‘once in a century’ event threw a monkey wrench into the world economy.
Are these year-over-year price increases? If so, the comparison with 2020 does not mean much due to pandemic effects then. For example, used car prices crashed last year as rental companies sold a lot of cars to stay afloat. Now there is excess demand for new cars, which raises the prices of used cars, the alternative.
We need to be careful about choice of base year. How about 2019 as base?
Tom, FWIW, CPI-U January 2019 was 251.712. This June release is 271.696. So if my math is correct that is 7.93% increase in past 18 months. We are a bit anecdotal in these things as our own personal rate varies and are ability to substitute. The only thing that CPI-U matters to me is June to June as that is where I get my COLA. So I’m bagging a 5% increase with my pension.
Personally my costs are certainly not up 7.93%, but I just bought a new car 2 years ago, and am not house looking so that helps a lot.
This will probably be my biggest “deflationary” year ever as my health premiums are going to drop 80% once I join my GFs plan in a few months. Also refinanced house and dropped rates 100 bps going forward. But, I have had many years were my costs were well above CPI-U too. So maybe the screws and the breaks even out over time.
Yes I have looked at the data–and yes used cars are a heavy item—but I see it every where–in the report and in my personal life. More importantly I am looking at the cost of labor (or lack of labor since everyone is having trouble hiring).
There is an incredibly long history of people thinking their personal inflation is multiples of CPI. I have been hearing people say this for decades, no matter what the actual inflation rates are.
If you had no choice to buy a car recently, that’s unfortunate that you got dinged with higher prices. Just about every other major price increase is related to travel. If you’ve been spending a lot there I have good news, you’re probably wealthy.
Karma–actually we bought a new one 3 weeks ago–well not new as I never buy new–but a 2019 with 10,000 miles. In our case we bought a brown small SUV and traded a white 2013 Acura TL with 163,000 miles on it–the dealer gave us 8800 on the used trade. Brown Infinity QX50’s don’t sell well in rural MN so we got a very fair net price on the deal. The dealer has our old car listed at 11,800. We had another dealer offer us 5500 on the trade for a near new Toyota Highlander. It is a crazy market.
I just placed a order for a new F150 XL with a V6 2 days ago with about 2 months to wait. Ford confirmed With a DORA and am now waiting for a assignment of a build date and plant and VIN to be issued in my name. Had a disclaimer of prices subject to change so I am crossing my fingers.
I figured it was worth it even if Its about double what I paid for my last new truck a 97 Ford ranger that lasted 24 yrs and 496,000 miles. I figure that’s not bad for inflation although I doubt I will drive it as many years as my last truck since ICE days are numbered
Karma,What world are you living in? If anyone is spouting political views it is you.
If I can insert my thought here, no one doubts that we are seeing an increase in prices across several categories. No doubt the Feds will work their magic and manipulate the numbers as they always have, across every administration, to show it lower than real life. I am guessing that Karma took offense at the original poster mentioning the current president, as if the current inflation spike was his fault. Any rational American should recognize that the current situation has been building for many years (eg, low interest rates), and has been aggravated by the pandemic and its fallout, along with supply chain issues. The current administration is certainly adding to the money supply and likely aggravating the situation but the inflation problem did not suddenly begin in January. To think otherwise is myopic. P.S. I blame all politicians, who always take the expedient route rather than make the difficult decisions.
On behalf of myself and (I suspect) most other readers, let me apologize for Karma’s rudeness. You shouldn’t have to put up with that kind of nonsense on your own (free!) site.
Used car prices are just crazy. One of my boys just sold the car he bought a few months ago for an almost $6000 profit (not a hot sports car – a recent model ford SUV). Of course, he had to come borrow one of my cars to get around….
Thanks Private–no problem – as I have written before I often write to stir up some conversation–Karma seldom minces words.
Bloomberg reported just today that used car prices for the last month have fallen, as has lumber prices considerably. Obviously you are correct and remember the economics of higher prices lead to lower demand, as most items are not necessities.
William, incredibly lumber is cheaper now than anytime this year. It has collapsed. Of course that is a relative term as its still considerably higher than it was 12 months ago. Meanwhile my oatmeal container is still $2.48 unchanged for many years. But they jacked up my price of Freshly deliveries recently by about 10% though.
I read a bloomberg article about lumber prices yesterday. https://www.bloomberg.com/news/articles/2021-07-12/lumber-wipes-out-2021-gain-with-demand-ebbing-after-record-boom
I also heard an interview with a lumber trader over the weekend who said that some of the big home builders had purchased inventory/futures to secure supply but are now dumping some of their inventory/contracts because they don’t want to be stuck with the really expensive lumber – and their dumping is further accelerating the decline in lumber prices.
I think the rate on 10 year going down has to do with market believing Fed will taper shortly and maybe even razing short term interest rates early next year ,which will hit economy and inflation expectations. If Biden replaces Powell early 2022 with Bernie like , we can have 1970s
Dont think we will ever see 1970 again. The FEDS cannot raise rates because of the deficit . If we apply a 3 % rate to the 10 year bond as it should be. The USA will be bankrupt, we do not have the money to pay all of this.
You only can print for so long, just like using a cash advance to pay your other credit card.
As long as there is no inflation you can print until the cows come home.
In a theoretical world, maybe. Unfortunately, we don’t live in a theoretical world.
Printing money is like digging a hole with us standing in the bottom. The deeper we get:
(1) the more fragile the hole becomes, so smaller and smaller things can collapse it;
(2) when we have our next crisis (like a pandemic), we won’t be able to start digging to save ourselves (because we will already have used up that option); and
(3) the fewer tools we have to extricate ourselves from the bottom of the hole.
Eventually, real inflation (or some financial crisis) will hit and collapse the hole our government is digging, and they won’t be able to get us out of it by using the tools they are using today.
I know some economists are saying “it will be different this time” – but that is what they say before every crisis (at least all that I have lived through) and it never is.
Did not receive a delivery date from my network equipment vendor. Followed up today after 2 weeks. He stated he did not want to provide more bad news to long term customers.
Told me his system is presently providing 10 week or 71 day lead time minimum on majority of items within order.
In the past have experienced 3-5 week delays on popular items but this was a surprise. Called my secondary vendor up he had zero stock and further delays.
Chip people must be laughing to the bank. While throwing share certificates out both windows.
“Chip people must be laughing to the bank. While throwing share certificates out both windows.”
What politicians and economists do not understand is that there is NOT a short term solution to increasing chip output. You write your $10 billion check to build a new wafer fabrication area and you might get chips 18 months to 2 years later. And that is in Taiwan. If you try to do that in the US, it will take literally years to get all of the approvals, hence > 2years.
Bottom line is the chip shortages are not going to be solved any time soon. And if something ever happened to the city of Hsinchu Taiwan, the chip supply situation would be exponentially worse. Maximum iphone supply would probably be cut in half. Same for Nvidia GPU’s used to mine crypto currenices. You would see some serious inflation in chip pricing. And your network equipment would go up in price. (Hsinchu is the headquarters of TSMC.)
T2 – to extend your well-made point, the folks ought to know and consider the very long lead times that many things we take for granted require. To illustrate, the east coast of the U.S. was on the verge of a melt down because the Colonial Pipeline was down for a few days. Shortages of gas, diesel, and jet fuel were on the verge of becoming a fact of life.
Bet you, even among well-educated people, most had never even head of the Colonial Pipeline before it was attacked or had the slightest idea of how dependent they were on the thing.
So, what’s the point here? Consider the pipeline that is never built, XL being just one of the many. Years from now, when needed, they won’t be there. Same applies to almost all infrastructure projects. Not the phony projects being considered buy Congress, but real concrete and steel projects. Same goes for factories never built, etc.
The scary issue with Colonial is the company no longer has people who know how to operate the pipeline manually, so they couldn’t circumvent the disruption to their automated processes. This came out in Congressional testimony by the CEO, who admitted all the people who knew how to run the system manually had retired or moved on. Makes you wonder how many other critical infrastructures are in the same boat.