The latest raging public topic in economics in recent weeks is accelerating inflation. CPI report this past week indicated fastest rise last month in past 31 years. It’s actually even higher. In my latest Alternative Visions radio show I take on the subject as topic for the entire show. How much inflation is Supply driven( global supply chains & domestic US supply problems) How much Demand? What about global financial commodities speculators driving up oil prices, metals, and grains? How much is just US price gouging to make up for 2020 revenue losses by raising 2021 prices faster? How long will it go? What’s the implications for Fed rate increase policies? And for Democrats in 2022 midterm elections (they’ve already lost).
TO LISTEN GO TO:
https://alternativevisions.podbean.com/e/alternative-visions-inflation%e2%80%94causes-future-prospects/
SHOW ANNOUNCEMENT.
Dr. Rasmus addresses the big topic of the week: accelerating inflation now rising 6.2% according to the latest CPI report and fastest in 30 yrs. Rasmus explains why the 6.2% is actually a low estimate. The multiple causes driving it today are explained: global supply chains breakdown, US domestic supply problems, price gouging by US companies with excessive market power, consumer demand, and the role of global financial commodities speculators. Why the latter is driving global crude oil prices to 2008 levels once again and spilling over to US economy as major factor in US domestic inflation. Rasmus explains why the mostly supply side and commodities speculator driven forces will continue for some time well into 2022. How inflation will slow the US economic recovery as it surges. And why a new causal element driving inflation is now appearing: inflationary expectations. Inflation + slowing economy + no government further stimulus = political wipe-out of Democrats in 2022 midterm elections.
INFLATION–Causes & Future Consequences-Audio
November 13, 2021 by jackrasmus
My take away from this post is that we are watching a series of negative feedback systems push the economy further down. The response to the broken supply chain precipitated by covid has created the cover for businesses to price gouge and allowed commodity speculators to gain traction by gaming critical components of the economy such as energy. This in turn produces inflation which diminishes demand which means a further push downward of the economy since the economy is driven primarily by consumer demand. The only way to break this downward spiral is major intervention by the government such as fiscal spending on the level of current monetary spending, say $5 Trillion but Biden clearly has capitulated on his many campaign promises which means he will be a one term President. So the job crisis and climate crisis deepen which in turn means we should start thinking of Biden not simply as a rerun of that has been Jimmy Carter but the end game role of Brezhnev.
David, a very prescient summing up. Thanks. I will post on my blog as an entry (not just a comment). Jack