Part 1 of more: Inflation, Central Banks’ rising interest rates, rising cost of living, supply shortages, retail price increases, protests … So what does it mean? To all people, not just the indebted. There is an economic contagion afoot, but more latter. From 1st year Economics class: Purpose of Economics is to provide equal distribution of wealth and full employment. Self-confessed mission of Central Banks? Lower the domestic product output of the economy and increase unemployment. For astute readers, these are direct violations of the self-described purpose of economics. So we live in a sea of lies. what is new.Inflation is not a unity. It is comprised of supply inflation and demand inflation. Remember those supply and demand curves in first year Eco? Are there no economics students. None writing to the public. Go read any few definitions of Inflation and learn first the simple one: Too much money chasing too few goods (and services). This refers to demand inflation only. Monetarism; the adjustment of C.B. lending rates higher to admittedly lower “Inflation”. Has absolutely no influence on supply Inflation, which is the preponderant part of total inflation.
Part 2 of more: People are already pulling back their running after bling bling or whatever; they have no money net monthly bill payments on their rising credit card invoices. So, no demand inflation to speak of because not much unencumbered cash or credit available to contribute to it. How long rates either rise or stay high? Until target rate of 2% total inflation is achieved claims C.B.’s. Inflation of Dec. 7 2022 is at approx. 7.5%. NO ONE knows or is willing to tell how long except Mike Restivo. Anyone, go look up the Internet. Everybody hopes “pivot” meaning decrease in rates. To where? and When? soon. Exactly? first quarter 2023. Nope. As I have explained previously. We are in a state of stagflation that could see high rates, inflationary by themselves (!!!) persist for several years. Last time in the 1970’s duration was 4 years. Caused by OPEC turning down oil production. Solution was OPEC turning up oil production. Monetarism had absolutely no part in the solution. Same as at present 2022. Oil output down, will only give supply inflation reprieve when turned up again like before. Nobody study history? Read the Internet for free?
Part 3 of more: Public endure even higher interest rates from C.B. and then for longer duration. Their target level is impossible to reach as the structure of supply is changed due to geo-political changes from wars to belligerencies. Nat gas, LPG, petroleum permanently scarce resources. Supply inflation is permanent. Anyone who expects economy to be so slowed such that businesses go bankrupt is insane. No business, no money, no food, die. Same with unemployment. Anyone who expects unemployed, unemployable by already dying businesses, just roll over and starve is insane. Both sectors will do whatever they must do from prostitution drug sales gun manufacture and sales, the devil only knows what. to live. Remember Dirty Thirties? They are now. Students armed with knives and guns, selling drugs. Increase violence and death on streets. Gets much worse, makes truck protest look like tea party. No one listening. It is everyone’s problem now and going forward. “Get informed, get organized, get involved.” – Mike Restivo