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Inflation Is in Sight Like pilgrims crossing the Atlantic, we keep our eyes on the horizon, watching for land. Consumer price inflation… it must be out there somewhere. We’ve been headed in that direction for many years. And lately, huge gusts of big spending/big printing… from Donald Trump and Joe Biden… have been driving us forward. Headed to InflationLand In 2020, the feds spent $3.7 trillion they didn’t have. In 2021, the Biden Bunch is still adding to the total deficit… U.S. debt topped $28 trillion last week. It’s not as if there were any mystery to what happens next. There’s a huge, sad continent out there – InflationLand. And it requires no navigational skill to get there. Just keep going in this direction… We’ll hit landfall soon enough. And what’s this? A seagull! We must be getting close. CNBC:
March’s rate, if it were to continue, would put the PPI well into double digits for the year. Then, the wholesale prices would work their way down the chain to the retail shelves… where people would begin to notice. So far, the numbers are relatively small. But with enough careful management by Treasury Secretary Janet Yellen and President Joe Biden, it shouldn’t be too long before we run onto the rocks. Full Speed Ahead You get to InflationLand, grosso modo, by discouraging production and encouraging consumption. Then, when the quantity of money increases faster than the goods and services you buy with them, prices rise. The feds (with the collusion of federal, state, and health officials) “turned off” whole industries last year. Even today, many shops are still closed. Note that they didn’t shut down demand; they closed off the supply of goods and services. Meanwhile, they gave out money. Here’s The Seattle Times:
But with so much stimmy money headed in their direction, a lot of people are apparently deciding not to go to work. Businesses report that it is hard to hire people for entry- and low-level jobs. No Turning Back Economists predict a big “surge” in GDP this year. But it is mostly a surge in spending fake money, not in creating new goods and services. In other words, it’s not the gentle wind of an honest, productive economy that we have to look forward to… it’s the gale of out-of-control inflation. MarketWatch:
But there will be no high real interest rates imposed this time. The monetary system won’t be rescued. InflationLand is where we’re going. There’s no turning back. Stay tuned. Regards, Bill Like what you’re reading? Send your thoughts to [email protected].
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