Not good news

We're in an inflationary period, product shortages and price hikes, too much money chasing too few goods. Purchasing power comprises home equity, stock portfolios, cash savings, and net income after taxes. The big problem is a downward slide in Supply. Fewer imports, zero U.S. industrial development, shortages of oil, car parts, agricultural inputs, airline crews, etc. Consumer spending is strong despite negative GDP. Mortgage refinance is being used as an instrument to raise cash. Retirees and voluntarily idle consumers not in the workforce have been receiving more government benefits, rent moratorium and PPP money. Democrat consensus is to forgive student loans and hand out cash for child care, EVs, affordable housing for the homeless, and unarmed social worker responders instead of police.

 

This will draw to a close in the next six months for two reasons. Interest rates will rise sharply, and Wall Street will crash. Layoffs. Bank lending and purchasing power gone. If you have a variable rate mortgage or a big credit card balance, you're screwed. Government will attempt to spend more and discover that no one wants to buy Treasury bonds or agency bonds or municipal sewer and water bonds. Biden sees himself as a second FDR, which is a pleasant delusion (minus FDR's ability to speak without stumbling). Roosevelt made the Great Depression more painful, drove America into worsening industrial paralysis and bread lines. Cue Woody Guthrie, John Dillinger and Baby Face Nelson.

 

 

Hey, relax! I'm probably wrong. Just a crackpot hippie living in a tin barn. It's not like there was a serious war threat in Europe. I have to hand it to cold blooded Democrat strategists, a six month bubble bath of personal consumption expenditure and a groovy summer of love before the midterms. Joe will ride his bike to an ice cream parlor, and White House press will ask which flavor he got? (Odds on chocolate.) There will be no other news unless approved by the DHS Disinformation Moderation Board. Consumer inflation will be adjusted downward by BLS for "hedonic gains" in new metaverse skins and 5G wifi.

 

Hedonic gains understated inflation for decades. Look it up.