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Thread: COVID Triggered Inflation

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    Default COVID Triggered Inflation

    "“We are experiencing this sudden surge in inflation for two main reasons,” says Craig Kirsner, President of Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida. “First, for the past year and a half due to Covid hardly anyone was spending money. Now that the economy is back open, people are spending and traveling and, as such, there is a bottleneck with very high demand. Our system isn’t set up for this high demand level, so that causes inflation in the short term. Second, with interest rates lowered to almost zero since March of 2020, these low interest rates have spurred demand in housing which is experiencing a large backlog as well as adding to inflation worries.”

    What you’re seeing is a simultaneous confluence of one-time occurrences that have both exposed economic weaknesses and created a vicious inflationary cycle.

    “It’s largely due to a perfect storm of supply chain disruption from Covid, government spending to fill the economic void and a synchronized global recovery driven by vaccine rollout and economies re-opening,” says John P. Micklitsch, Chief Investment Officer at Ancora in Cleveland. “The pandemic is probably just the event that exposed over a decade of underinvestment in the global commodity supply chain and the vulnerability of ‘just-in-time’ inventories to this sort of supply shock.”

    There is no evidence that, without Covid, we would be facing this “supply shock” induced inflation.

    “The strained supply lines due to Covid paired with an increase in demand we are seeing now would be one of the main reasons for inflation at the moment,” says Derek S. Taddei, Relationship Manager, 401k Specialist at HoyleCohen, LLC in Phoenix. Using language familiar to anyone who has taken an ECON101 class, Taddei calls this “a combination of Demand Pull and Cost Push inflationary pressures.”

    This, however, isn’t the only Covid-based reason for inflation. Another is a simple “Snapshot-in-Time” anomaly. It’s merely the coincidence of the reporting calendar.

    “A large portion of what we are experiencing in inflation is due to the deflation which we saw in 2020 during the Covid shutdowns,” says Mike Windle, CEO at Custom Wealth Solutions in Plymouth, Michigan. “As prices work to normalize, it is causing inflationary pressure. Add to that the pent-up demand caused by the Covid lockdowns; we are seeing prices rise quickly.”

    This reason gives many people pause to say the current level of inflation will be short-lived. If we look at the last twelve months, we’re seeing the pendulum swinging wildly between both extremes. The expectation is that it will quickly settle into its normal, less volatile, range.

    “Much of the elevated inflation numbers are being attributed to the ‘base effect’ as inflation is commonly quoted on a year-over-year basis,” says Steven Saunders, a Director and Portfolio Advisor with Round Table Wealth Management in New York City. “One year ago, global economies were nearly fully shut down so the denominator in the calculation is arguably artificially depressed. As these depressed numbers from one year ago ‘roll off,’ inflation metrics will likely come down.”

    How might you explain this to your children or to someone consumed by anxiety regarding the headline news on inflation?

    “You have to look at the whole picture,” says Mike Cocco, Equitable EQH +1.3% Advisor at Equitable in Nutley, New Jersey. “First, if you are looking at the 1-year changes in inflation, those numbers will be pretty jarring, with many metrics coming in at 5%+ over the previous 12 months. However, you must also keep in mind that 12 months ago, most of our economy was shut down, and people bought less things, traveled less, etc. It was like hitting a big time ‘pause’ button on the economy. That put us into a deflationary position, as many prices and wages decreased, because no one knew what the next week would bring. It was pure survival mode and many people hoarded cash (and toilet paper!). Now, 12 months later, our world couldn’t look more different. Restrictions are all but lifted across the country, people are traveling again, buying things… it was like all of us were freed from a year and a half grounding and now we are ready to re-introduce ourselves to the world. There is so much built-up demand, which can drive up prices as we’ve seen, as consumers compete for goods and services. Let’s couple that high level of demand with low levels of supply in many areas, such as building supplies and some groceries, due to the supply chains getting disrupted by the pandemic, and anyone who has taken an Economics 101 course knows that high demand and low supply leads to higher prices… and that is what inflation is.”

    Lest you too quickly pin this whole inflation thing on Covid, realize other factors have contributed to higher prices. These factors did not need a pandemic to spur them.

    “Prices are increasing simply due to a mismatch in the supply and demand of goods,” says Saunders. “Over the last 16 months or so, pandemic restrictions closed many factories and shipping routes around the globe, resulting in less availability of products. However, it’s not just pandemic-related supply issues as the Texas winter storm in February of 2021 shut down production of many petroleum-based products that play into multiple industries like foam for furniture or resin for PVC pipes in construction. Additionally, extreme droughts around the world also have the ability to impact the supply of agriculture products.”

    But wait. There’s more.

    “At the same time as the global supply chain was experiencing large scale disruptions, stimulus payments resulted in many individuals with excess disposable income,” says Saunders. “Since much of the economy was shut down during that time period, individuals shifted their spending away from services such as eating out or travel to buying physical goods like TVs or materials for home improvement. Since fewer products were available, people had to pay up for these products, resulting in increasing inflation.”

    It’s clear the “Demand Pull” that Taddei referred to isn’t just coming from lack of spending last year. It’s also coming courtesy of Washington policy-making. Here, Taddei refers to “The three rounds of stimulus that have taken place, as well as a possible 4th round, and even more proposed spending which may or may not be paid for with funds already allocated to unemployment and Covid stimulus from local governments.”

    If many point a finger at Covid causing inflation, many point a second finger at national leadership.

    “Legislation from Washington has likely played a role in increasing demand for goods over the last year,” says Saunders. “The CARES Act distributed direct cash payments to individuals and also increased unemployment benefits. These had a direct impact on increasing incomes and savings rates of many individuals. Along with these transfer payments, the Act also allowed for those in need to defer payments on mortgages and student loans, ‘freeing up’ more cash for individuals to spend on goods and services.”

    But it’s not just individuals going on this government-subsidized spending binge.

    “In addition to the ‘free-spending’ behavior of consumers in this current environment, the US Government has not been afraid to take aggressive measures to provide aid to the economy as it was navigating a Covid-world, and they have kept on the path of providing additional assistance to families, businesses, and local state and municipal governments, to ensure a full recovery from this pandemic and the shutdowns,” says Cocco. “To be specific, to date, the Federal Government has approved and earmarked more than $5 Trillion towards Covid relief bills. The latest bill passed (as of 6/29/21) was the American Rescue Plan, which will provide almost $2Trillion of relief to many different areas, ranging from more direct payments to individuals and families, aid to state and local governments, tax incentives, etc. Additionally, Congress is very close and may have framework on a new infrastructure deal, which would be the largest infrastructure deal in our nation’s history, to build and repair roads, bridges, railways, internet broadband, water supplies, etc. Passage of this bill will pump more money into our economy which can certainly create additional inflationary spikes in the short-term.”

    Some feel this government intrusion will only worsen the inflationary situation.

    “Injecting large amounts of cash into an economy through stimulus and other spending programs like the proposed trillion+ dollar ‘infrastructure’ bill will ramp up economic growth, and will certainly not decrease inflationary pressures,” says Taddei. “It is a combination of issues, fiscal stimulus, the Federal Reserve’s loose monetary policy and the subsequent increase in money supply that creates more money chasing fewer goods and services.”

    This is where the vicious cycle really starts building on itself.

    “The U.S. economy is powered by the consumer and we are currently seeing consumers with a lot of extra cash,” says Windle. “This has led to a greater demand for goods and services without supply chains being able to fully recover from the shortages that were created due to shutdowns over the past year. Gasoline prices are still elevated from the shortages that were caused during the Colonial Pipeline shutdown and as businesses try to entice employees back into the workforce, we are finally seeing low-wage workers getting raises, signing bonuses and other benefits whose costs are being passed on to the consumer.”

    Plenty of reasons exist for the sudden surge in inflation. Alone, they may have just caused an annoyance. Together, they can do some real damage if not contained.

    Which begs the question: Are you prepared to live with longer than expected inflation?"

    Covid Or Policy: What’s Causing This Inflation Surge? Chris Carosa, Forbes
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    Thank god I read this article. I thought Biden destroying much of the US oil industry and the resulting dependence on much higher priced imported oil was a major contributor to my gas tank fill-up increasing by $25 or my 20# tank of propane jumping by 30%. I guess truckers hauling goods over the roads has little to do with the cost of bread and milk in the partially filled grocery stores.
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    Quote Originally Posted by PoliTalker View Post
    "“We are experiencing this sudden surge in inflation for two main reasons,” says Craig Kirsner, President of Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida. “First, for the past year and a half due to Covid hardly anyone was spending money. Now that the economy is back open, people are spending and traveling and, as such, there is a bottleneck with very high demand. Our system isn’t set up for this high demand level, so that causes inflation in the short term. Second, with interest rates lowered to almost zero since March of 2020, these low interest rates have spurred demand in housing which is experiencing a large backlog as well as adding to inflation worries.”

    What you’re seeing is a simultaneous confluence of one-time occurrences that have both exposed economic weaknesses and created a vicious inflationary cycle.

    “It’s largely due to a perfect storm of supply chain disruption from Covid, government spending to fill the economic void and a synchronized global recovery driven by vaccine rollout and economies re-opening,” says John P. Micklitsch, Chief Investment Officer at Ancora in Cleveland. “The pandemic is probably just the event that exposed over a decade of underinvestment in the global commodity supply chain and the vulnerability of ‘just-in-time’ inventories to this sort of supply shock.”

    There is no evidence that, without Covid, we would be facing this “supply shock” induced inflation.

    “The strained supply lines due to Covid paired with an increase in demand we are seeing now would be one of the main reasons for inflation at the moment,” says Derek S. Taddei, Relationship Manager, 401k Specialist at HoyleCohen, LLC in Phoenix. Using language familiar to anyone who has taken an ECON101 class, Taddei calls this “a combination of Demand Pull and Cost Push inflationary pressures.”

    This, however, isn’t the only Covid-based reason for inflation. Another is a simple “Snapshot-in-Time” anomaly. It’s merely the coincidence of the reporting calendar.

    “A large portion of what we are experiencing in inflation is due to the deflation which we saw in 2020 during the Covid shutdowns,” says Mike Windle, CEO at Custom Wealth Solutions in Plymouth, Michigan. “As prices work to normalize, it is causing inflationary pressure. Add to that the pent-up demand caused by the Covid lockdowns; we are seeing prices rise quickly.”

    This reason gives many people pause to say the current level of inflation will be short-lived. If we look at the last twelve months, we’re seeing the pendulum swinging wildly between both extremes. The expectation is that it will quickly settle into its normal, less volatile, range.

    “Much of the elevated inflation numbers are being attributed to the ‘base effect’ as inflation is commonly quoted on a year-over-year basis,” says Steven Saunders, a Director and Portfolio Advisor with Round Table Wealth Management in New York City. “One year ago, global economies were nearly fully shut down so the denominator in the calculation is arguably artificially depressed. As these depressed numbers from one year ago ‘roll off,’ inflation metrics will likely come down.”

    How might you explain this to your children or to someone consumed by anxiety regarding the headline news on inflation?

    “You have to look at the whole picture,” says Mike Cocco, Equitable EQH +1.3% Advisor at Equitable in Nutley, New Jersey. “First, if you are looking at the 1-year changes in inflation, those numbers will be pretty jarring, with many metrics coming in at 5%+ over the previous 12 months. However, you must also keep in mind that 12 months ago, most of our economy was shut down, and people bought less things, traveled less, etc. It was like hitting a big time ‘pause’ button on the economy. That put us into a deflationary position, as many prices and wages decreased, because no one knew what the next week would bring. It was pure survival mode and many people hoarded cash (and toilet paper!). Now, 12 months later, our world couldn’t look more different. Restrictions are all but lifted across the country, people are traveling again, buying things… it was like all of us were freed from a year and a half grounding and now we are ready to re-introduce ourselves to the world. There is so much built-up demand, which can drive up prices as we’ve seen, as consumers compete for goods and services. Let’s couple that high level of demand with low levels of supply in many areas, such as building supplies and some groceries, due to the supply chains getting disrupted by the pandemic, and anyone who has taken an Economics 101 course knows that high demand and low supply leads to higher prices… and that is what inflation is.”

    Lest you too quickly pin this whole inflation thing on Covid, realize other factors have contributed to higher prices. These factors did not need a pandemic to spur them.

    “Prices are increasing simply due to a mismatch in the supply and demand of goods,” says Saunders. “Over the last 16 months or so, pandemic restrictions closed many factories and shipping routes around the globe, resulting in less availability of products. However, it’s not just pandemic-related supply issues as the Texas winter storm in February of 2021 shut down production of many petroleum-based products that play into multiple industries like foam for furniture or resin for PVC pipes in construction. Additionally, extreme droughts around the world also have the ability to impact the supply of agriculture products.”

    But wait. There’s more.

    “At the same time as the global supply chain was experiencing large scale disruptions, stimulus payments resulted in many individuals with excess disposable income,” says Saunders. “Since much of the economy was shut down during that time period, individuals shifted their spending away from services such as eating out or travel to buying physical goods like TVs or materials for home improvement. Since fewer products were available, people had to pay up for these products, resulting in increasing inflation.”

    It’s clear the “Demand Pull” that Taddei referred to isn’t just coming from lack of spending last year. It’s also coming courtesy of Washington policy-making. Here, Taddei refers to “The three rounds of stimulus that have taken place, as well as a possible 4th round, and even more proposed spending which may or may not be paid for with funds already allocated to unemployment and Covid stimulus from local governments.”

    If many point a finger at Covid causing inflation, many point a second finger at national leadership.

    “Legislation from Washington has likely played a role in increasing demand for goods over the last year,” says Saunders. “The CARES Act distributed direct cash payments to individuals and also increased unemployment benefits. These had a direct impact on increasing incomes and savings rates of many individuals. Along with these transfer payments, the Act also allowed for those in need to defer payments on mortgages and student loans, ‘freeing up’ more cash for individuals to spend on goods and services.”

    But it’s not just individuals going on this government-subsidized spending binge.

    “In addition to the ‘free-spending’ behavior of consumers in this current environment, the US Government has not been afraid to take aggressive measures to provide aid to the economy as it was navigating a Covid-world, and they have kept on the path of providing additional assistance to families, businesses, and local state and municipal governments, to ensure a full recovery from this pandemic and the shutdowns,” says Cocco. “To be specific, to date, the Federal Government has approved and earmarked more than $5 Trillion towards Covid relief bills. The latest bill passed (as of 6/29/21) was the American Rescue Plan, which will provide almost $2Trillion of relief to many different areas, ranging from more direct payments to individuals and families, aid to state and local governments, tax incentives, etc. Additionally, Congress is very close and may have framework on a new infrastructure deal, which would be the largest infrastructure deal in our nation’s history, to build and repair roads, bridges, railways, internet broadband, water supplies, etc. Passage of this bill will pump more money into our economy which can certainly create additional inflationary spikes in the short-term.”

    Some feel this government intrusion will only worsen the inflationary situation.

    “Injecting large amounts of cash into an economy through stimulus and other spending programs like the proposed trillion+ dollar ‘infrastructure’ bill will ramp up economic growth, and will certainly not decrease inflationary pressures,” says Taddei. “It is a combination of issues, fiscal stimulus, the Federal Reserve’s loose monetary policy and the subsequent increase in money supply that creates more money chasing fewer goods and services.”

    This is where the vicious cycle really starts building on itself.

    “The U.S. economy is powered by the consumer and we are currently seeing consumers with a lot of extra cash,” says Windle. “This has led to a greater demand for goods and services without supply chains being able to fully recover from the shortages that were created due to shutdowns over the past year. Gasoline prices are still elevated from the shortages that were caused during the Colonial Pipeline shutdown and as businesses try to entice employees back into the workforce, we are finally seeing low-wage workers getting raises, signing bonuses and other benefits whose costs are being passed on to the consumer.”

    Plenty of reasons exist for the sudden surge in inflation. Alone, they may have just caused an annoyance. Together, they can do some real damage if not contained.

    Which begs the question: Are you prepared to live with longer than expected inflation?"

    Covid Or Policy: What’s Causing This Inflation Surge? Chris Carosa, Forbes
    The only way you can cause this kind of inflation is to print money faster than wealth creation. That is what the Fed is doing now. Of course, Biden Handler induced shortages aren't helping either.
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    The plandemic.....working like a charm. Bama bringin' this "all to privileged" nation down to the dirt. His plan continues.
    Abortion rights dogma can obscure human reason & harden the human heart so much that the same person who feels
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    More likely it was spending like there was no future that triggered inflation.
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    Hello Damocles,

    Quote Originally Posted by Damocles View Post
    More likely it was spending like there was no future that triggered inflation.
    That's true that there was increased spending, but at the same time there was also a lot of lost income. Small businesses especially.
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    Quote Originally Posted by Stretch View Post
    The plandemic.....working like a charm. Bama bringin' this "all to privileged" nation down to the dirt. His plan continues.
    Ahh, to be back in the Antebellum South, sippin' on Mint Juleps and watching the darkies work the fields, eh, D?
    God bless America and those who defend our Constitution.

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    Quote Originally Posted by PoliTalker View Post
    "“We are experiencing this sudden surge in inflation for two main reasons,” says Craig Kirsner, President of Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida. “First, for the past year and a half due to Covid hardly anyone was spending money. Now that the economy is back open, people are spending and traveling and, as such, there is a bottleneck with very high demand. Our system isn’t set up for this high demand level, so that causes inflation in the short term. Second, with interest rates lowered to almost zero since March of 2020, these low interest rates have spurred demand in housing which is experiencing a large backlog as well as adding to inflation worries.”

    What you’re seeing is a simultaneous confluence of one-time occurrences that have both exposed economic weaknesses and created a vicious inflationary cycle.

    “It’s largely due to a perfect storm of supply chain disruption from Covid, government spending to fill the economic void and a synchronized global recovery driven by vaccine rollout and economies re-opening,” says John P. Micklitsch, Chief Investment Officer at Ancora in Cleveland. “The pandemic is probably just the event that exposed over a decade of underinvestment in the global commodity supply chain and the vulnerability of ‘just-in-time’ inventories to this sort of supply shock.”

    There is no evidence that, without Covid, we would be facing this “supply shock” induced inflation.

    “The strained supply lines due to Covid paired with an increase in demand we are seeing now would be one of the main reasons for inflation at the moment,” says Derek S. Taddei, Relationship Manager, 401k Specialist at HoyleCohen, LLC in Phoenix. Using language familiar to anyone who has taken an ECON101 class, Taddei calls this “a combination of Demand Pull and Cost Push inflationary pressures.”

    This, however, isn’t the only Covid-based reason for inflation. Another is a simple “Snapshot-in-Time” anomaly. It’s merely the coincidence of the reporting calendar.

    “A large portion of what we are experiencing in inflation is due to the deflation which we saw in 2020 during the Covid shutdowns,” says Mike Windle, CEO at Custom Wealth Solutions in Plymouth, Michigan. “As prices work to normalize, it is causing inflationary pressure. Add to that the pent-up demand caused by the Covid lockdowns; we are seeing prices rise quickly.”

    This reason gives many people pause to say the current level of inflation will be short-lived. If we look at the last twelve months, we’re seeing the pendulum swinging wildly between both extremes. The expectation is that it will quickly settle into its normal, less volatile, range.

    “Much of the elevated inflation numbers are being attributed to the ‘base effect’ as inflation is commonly quoted on a year-over-year basis,” says Steven Saunders, a Director and Portfolio Advisor with Round Table Wealth Management in New York City. “One year ago, global economies were nearly fully shut down so the denominator in the calculation is arguably artificially depressed. As these depressed numbers from one year ago ‘roll off,’ inflation metrics will likely come down.”

    How might you explain this to your children or to someone consumed by anxiety regarding the headline news on inflation?

    “You have to look at the whole picture,” says Mike Cocco, Equitable EQH +1.3% Advisor at Equitable in Nutley, New Jersey. “First, if you are looking at the 1-year changes in inflation, those numbers will be pretty jarring, with many metrics coming in at 5%+ over the previous 12 months. However, you must also keep in mind that 12 months ago, most of our economy was shut down, and people bought less things, traveled less, etc. It was like hitting a big time ‘pause’ button on the economy. That put us into a deflationary position, as many prices and wages decreased, because no one knew what the next week would bring. It was pure survival mode and many people hoarded cash (and toilet paper!). Now, 12 months later, our world couldn’t look more different. Restrictions are all but lifted across the country, people are traveling again, buying things… it was like all of us were freed from a year and a half grounding and now we are ready to re-introduce ourselves to the world. There is so much built-up demand, which can drive up prices as we’ve seen, as consumers compete for goods and services. Let’s couple that high level of demand with low levels of supply in many areas, such as building supplies and some groceries, due to the supply chains getting disrupted by the pandemic, and anyone who has taken an Economics 101 course knows that high demand and low supply leads to higher prices… and that is what inflation is.”

    Lest you too quickly pin this whole inflation thing on Covid, realize other factors have contributed to higher prices. These factors did not need a pandemic to spur them.

    “Prices are increasing simply due to a mismatch in the supply and demand of goods,” says Saunders. “Over the last 16 months or so, pandemic restrictions closed many factories and shipping routes around the globe, resulting in less availability of products. However, it’s not just pandemic-related supply issues as the Texas winter storm in February of 2021 shut down production of many petroleum-based products that play into multiple industries like foam for furniture or resin for PVC pipes in construction. Additionally, extreme droughts around the world also have the ability to impact the supply of agriculture products.”

    But wait. There’s more.

    “At the same time as the global supply chain was experiencing large scale disruptions, stimulus payments resulted in many individuals with excess disposable income,” says Saunders. “Since much of the economy was shut down during that time period, individuals shifted their spending away from services such as eating out or travel to buying physical goods like TVs or materials for home improvement. Since fewer products were available, people had to pay up for these products, resulting in increasing inflation.”

    It’s clear the “Demand Pull” that Taddei referred to isn’t just coming from lack of spending last year. It’s also coming courtesy of Washington policy-making. Here, Taddei refers to “The three rounds of stimulus that have taken place, as well as a possible 4th round, and even more proposed spending which may or may not be paid for with funds already allocated to unemployment and Covid stimulus from local governments.”

    If many point a finger at Covid causing inflation, many point a second finger at national leadership.

    “Legislation from Washington has likely played a role in increasing demand for goods over the last year,” says Saunders. “The CARES Act distributed direct cash payments to individuals and also increased unemployment benefits. These had a direct impact on increasing incomes and savings rates of many individuals. Along with these transfer payments, the Act also allowed for those in need to defer payments on mortgages and student loans, ‘freeing up’ more cash for individuals to spend on goods and services.”

    But it’s not just individuals going on this government-subsidized spending binge.

    “In addition to the ‘free-spending’ behavior of consumers in this current environment, the US Government has not been afraid to take aggressive measures to provide aid to the economy as it was navigating a Covid-world, and they have kept on the path of providing additional assistance to families, businesses, and local state and municipal governments, to ensure a full recovery from this pandemic and the shutdowns,” says Cocco. “To be specific, to date, the Federal Government has approved and earmarked more than $5 Trillion towards Covid relief bills. The latest bill passed (as of 6/29/21) was the American Rescue Plan, which will provide almost $2Trillion of relief to many different areas, ranging from more direct payments to individuals and families, aid to state and local governments, tax incentives, etc. Additionally, Congress is very close and may have framework on a new infrastructure deal, which would be the largest infrastructure deal in our nation’s history, to build and repair roads, bridges, railways, internet broadband, water supplies, etc. Passage of this bill will pump more money into our economy which can certainly create additional inflationary spikes in the short-term.”

    Some feel this government intrusion will only worsen the inflationary situation.

    “Injecting large amounts of cash into an economy through stimulus and other spending programs like the proposed trillion+ dollar ‘infrastructure’ bill will ramp up economic growth, and will certainly not decrease inflationary pressures,” says Taddei. “It is a combination of issues, fiscal stimulus, the Federal Reserve’s loose monetary policy and the subsequent increase in money supply that creates more money chasing fewer goods and services.”

    This is where the vicious cycle really starts building on itself.

    “The U.S. economy is powered by the consumer and we are currently seeing consumers with a lot of extra cash,” says Windle. “This has led to a greater demand for goods and services without supply chains being able to fully recover from the shortages that were created due to shutdowns over the past year. Gasoline prices are still elevated from the shortages that were caused during the Colonial Pipeline shutdown and as businesses try to entice employees back into the workforce, we are finally seeing low-wage workers getting raises, signing bonuses and other benefits whose costs are being passed on to the consumer.”

    Plenty of reasons exist for the sudden surge in inflation. Alone, they may have just caused an annoyance. Together, they can do some real damage if not contained.

    Which begs the question: Are you prepared to live with longer than expected inflation?"

    Covid Or Policy: What’s Causing This Inflation Surge? Chris Carosa, Forbes
    In that case, meaning the lawlessly hacked in tRump tyrant insurgency at enabling the spread of the covid-19 virus to which his gutter insurgency also enabled the covid death of over 600,000 Americans and with global implications too ultimately triggered that inflation. Yet, thanks to Team Biden, over 400 million doses of the covid vaccine have been administered in America with the covid rate dropping but with the advisory of remaining highly cautious at promoting the importance of getting vaccinated and wearing a mask when appropriate and necessary.

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    Quote Originally Posted by PoliTalker View Post
    "“We are experiencing this sudden surge in inflation for two main reasons,” says Craig Kirsner, President of Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida. “First, for the past year and a half due to Covid hardly anyone was spending money. Now that the economy is back open, people are spending and traveling and, as such, there is a bottleneck with very high demand. Our system isn’t set up for this high demand level, so that causes inflation in the short term. Second, with interest rates lowered to almost zero since March of 2020, these low interest rates have spurred demand in housing which is experiencing a large backlog as well as adding to inflation worries.”

    What you’re seeing is a simultaneous confluence of one-time occurrences that have both exposed economic weaknesses and created a vicious inflationary cycle.

    “It’s largely due to a perfect storm of supply chain disruption from Covid, government spending to fill the economic void and a synchronized global recovery driven by vaccine rollout and economies re-opening,” says John P. Micklitsch, Chief Investment Officer at Ancora in Cleveland. “The pandemic is probably just the event that exposed over a decade of underinvestment in the global commodity supply chain and the vulnerability of ‘just-in-time’ inventories to this sort of supply shock.”

    There is no evidence that, without Covid, we would be facing this “supply shock” induced inflation.

    “The strained supply lines due to Covid paired with an increase in demand we are seeing now would be one of the main reasons for inflation at the moment,” says Derek S. Taddei, Relationship Manager, 401k Specialist at HoyleCohen, LLC in Phoenix. Using language familiar to anyone who has taken an ECON101 class, Taddei calls this “a combination of Demand Pull and Cost Push inflationary pressures.”

    This, however, isn’t the only Covid-based reason for inflation. Another is a simple “Snapshot-in-Time” anomaly. It’s merely the coincidence of the reporting calendar.

    “A large portion of what we are experiencing in inflation is due to the deflation which we saw in 2020 during the Covid shutdowns,” says Mike Windle, CEO at Custom Wealth Solutions in Plymouth, Michigan. “As prices work to normalize, it is causing inflationary pressure. Add to that the pent-up demand caused by the Covid lockdowns; we are seeing prices rise quickly.”

    This reason gives many people pause to say the current level of inflation will be short-lived. If we look at the last twelve months, we’re seeing the pendulum swinging wildly between both extremes. The expectation is that it will quickly settle into its normal, less volatile, range.

    “Much of the elevated inflation numbers are being attributed to the ‘base effect’ as inflation is commonly quoted on a year-over-year basis,” says Steven Saunders, a Director and Portfolio Advisor with Round Table Wealth Management in New York City. “One year ago, global economies were nearly fully shut down so the denominator in the calculation is arguably artificially depressed. As these depressed numbers from one year ago ‘roll off,’ inflation metrics will likely come down.”

    How might you explain this to your children or to someone consumed by anxiety regarding the headline news on inflation?

    “You have to look at the whole picture,” says Mike Cocco, Equitable EQH +1.3% Advisor at Equitable in Nutley, New Jersey. “First, if you are looking at the 1-year changes in inflation, those numbers will be pretty jarring, with many metrics coming in at 5%+ over the previous 12 months. However, you must also keep in mind that 12 months ago, most of our economy was shut down, and people bought less things, traveled less, etc. It was like hitting a big time ‘pause’ button on the economy. That put us into a deflationary position, as many prices and wages decreased, because no one knew what the next week would bring. It was pure survival mode and many people hoarded cash (and toilet paper!). Now, 12 months later, our world couldn’t look more different. Restrictions are all but lifted across the country, people are traveling again, buying things… it was like all of us were freed from a year and a half grounding and now we are ready to re-introduce ourselves to the world. There is so much built-up demand, which can drive up prices as we’ve seen, as consumers compete for goods and services. Let’s couple that high level of demand with low levels of supply in many areas, such as building supplies and some groceries, due to the supply chains getting disrupted by the pandemic, and anyone who has taken an Economics 101 course knows that high demand and low supply leads to higher prices… and that is what inflation is.”

    Lest you too quickly pin this whole inflation thing on Covid, realize other factors have contributed to higher prices. These factors did not need a pandemic to spur them.

    “Prices are increasing simply due to a mismatch in the supply and demand of goods,” says Saunders. “Over the last 16 months or so, pandemic restrictions closed many factories and shipping routes around the globe, resulting in less availability of products. However, it’s not just pandemic-related supply issues as the Texas winter storm in February of 2021 shut down production of many petroleum-based products that play into multiple industries like foam for furniture or resin for PVC pipes in construction. Additionally, extreme droughts around the world also have the ability to impact the supply of agriculture products.”

    But wait. There’s more.

    “At the same time as the global supply chain was experiencing large scale disruptions, stimulus payments resulted in many individuals with excess disposable income,” says Saunders. “Since much of the economy was shut down during that time period, individuals shifted their spending away from services such as eating out or travel to buying physical goods like TVs or materials for home improvement. Since fewer products were available, people had to pay up for these products, resulting in increasing inflation.”

    It’s clear the “Demand Pull” that Taddei referred to isn’t just coming from lack of spending last year. It’s also coming courtesy of Washington policy-making. Here, Taddei refers to “The three rounds of stimulus that have taken place, as well as a possible 4th round, and even more proposed spending which may or may not be paid for with funds already allocated to unemployment and Covid stimulus from local governments.”

    If many point a finger at Covid causing inflation, many point a second finger at national leadership.

    “Legislation from Washington has likely played a role in increasing demand for goods over the last year,” says Saunders. “The CARES Act distributed direct cash payments to individuals and also increased unemployment benefits. These had a direct impact on increasing incomes and savings rates of many individuals. Along with these transfer payments, the Act also allowed for those in need to defer payments on mortgages and student loans, ‘freeing up’ more cash for individuals to spend on goods and services.”

    But it’s not just individuals going on this government-subsidized spending binge.

    “In addition to the ‘free-spending’ behavior of consumers in this current environment, the US Government has not been afraid to take aggressive measures to provide aid to the economy as it was navigating a Covid-world, and they have kept on the path of providing additional assistance to families, businesses, and local state and municipal governments, to ensure a full recovery from this pandemic and the shutdowns,” says Cocco. “To be specific, to date, the Federal Government has approved and earmarked more than $5 Trillion towards Covid relief bills. The latest bill passed (as of 6/29/21) was the American Rescue Plan, which will provide almost $2Trillion of relief to many different areas, ranging from more direct payments to individuals and families, aid to state and local governments, tax incentives, etc. Additionally, Congress is very close and may have framework on a new infrastructure deal, which would be the largest infrastructure deal in our nation’s history, to build and repair roads, bridges, railways, internet broadband, water supplies, etc. Passage of this bill will pump more money into our economy which can certainly create additional inflationary spikes in the short-term.”

    Some feel this government intrusion will only worsen the inflationary situation.

    “Injecting large amounts of cash into an economy through stimulus and other spending programs like the proposed trillion+ dollar ‘infrastructure’ bill will ramp up economic growth, and will certainly not decrease inflationary pressures,” says Taddei. “It is a combination of issues, fiscal stimulus, the Federal Reserve’s loose monetary policy and the subsequent increase in money supply that creates more money chasing fewer goods and services.”

    This is where the vicious cycle really starts building on itself.

    “The U.S. economy is powered by the consumer and we are currently seeing consumers with a lot of extra cash,” says Windle. “This has led to a greater demand for goods and services without supply chains being able to fully recover from the shortages that were created due to shutdowns over the past year. Gasoline prices are still elevated from the shortages that were caused during the Colonial Pipeline shutdown and as businesses try to entice employees back into the workforce, we are finally seeing low-wage workers getting raises, signing bonuses and other benefits whose costs are being passed on to the consumer.”

    Plenty of reasons exist for the sudden surge in inflation. Alone, they may have just caused an annoyance. Together, they can do some real damage if not contained.

    Which begs the question: Are you prepared to live with longer than expected inflation?"

    Covid Or Policy: What’s Causing This Inflation Surge? Chris Carosa, Forbes
    You like that covid-panic triggered inflation you caused with your panic shit every day, huh?

    It hurts a lot of Americans and you're responsible for it.
    Last edited by Matt Dillon; 10-17-2021 at 12:36 PM.

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    Americans don’t care much for Biden’s ineptitude at just about everything.

    the response to the coronavirus: 48 percent approve, while 50 percent disapprove;

    ***the economy:*** 39 percent approve, while 55 percent disapprove;

    his job as Commander in Chief of the U.S. military: 37 percent approve, while 58 percent disapprove;
    taxes: 37 percent approve, while 54 percent disapprove;

    foreign policy: 34 percent approve, while 58 percent disapprove;

    immigration issues: 25 percent approve, while 67 percent disapprove;

    the situation at the Mexican border: 23 percent approve, while 67 percent disapprove.

    This fool is under water and drowning and harming tgey American people.

    https://poll.qu.edu/poll-release?releaseid=3824
    Last edited by Earl; 10-17-2021 at 05:25 AM.

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    Quote Originally Posted by Matt Dillon View Post
    You like that covid-panic triggered inflation you caused with you panic shit every day, huh?

    It hurts a lot of Americans and you're responsible for it.
    Could not watch one minute of "news" when they were not selling their china virus fear porn and on every forum in the country, there were a few "leaders" making sure the malcontent lefties stayed in lockstep with their spoon fed propaganda from father faucci.

    Quote Originally Posted by Doc Dutch View Post
    Agreed. Shooting angry Trumpers should be a national pastime.
    Quote Originally Posted by BidenPresident View Post
    Only conclusion. Going to a Christian school causes you to be a mass murderer.

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    Many workers have quit jobs while they assess their priorities and COVID safety.

    Manufacturing of many items is running below normal production levels.

    This is causing backlogs in the manufacture of larger items.

    Supply is not keeping up with demand in many markets.

    That causes inflation.
    Personal Ignore Policy PIP: I like civil discourse. I will give you all the respect in the world if you respect me. Mouth off to me, or express overt racism, you will be PERMANENTLY Ignore Listed. Zero tolerance. No exceptions. I'll never read a word you write, even if quoted by another, nor respond to you, nor participate in your threads. ... Ignore the shallow. Cherish the thoughtful. Long Live Civil Discourse, Mutual Respect, and Good Debate! ps: Feel free to adopt my PIP. It works well.

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    Quote Originally Posted by Stretch View Post
    The plandemic.....working like a charm. Bama bringin' this "all to privileged" nation down to the dirt. His plan continues.
    They have 3 more years to throw sand and monkey wrenches into the gears of America.

    They might take 'er down this time, barring a Miracle from God.
    Kinda like when we were saved from Japanese economic takeover.

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    Quote Originally Posted by Matt Dillon View Post
    They have 3 more years to throw sand and monkey wrenches into the gears of America.

    They might take 'er down this time, barring a Miracle from God.
    Kinda like when we were saved from Japanese economic takeover.
    Having an 80s flashback there, old timer?
    God bless America and those who defend our Constitution.

    "Hatred is a failure of imagination" - Graham Greene, "The Power and the Glory"

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    Quote Originally Posted by Dutch Uncle View Post
    Having an 80s flashback there, old timer?
    Oh! You remember that, aye?

    They were trying to own everything. It was scary. Some still own houses here.

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