The news is obsessed with inflation and rightfully so food is up 10% and gas is up 59% for American families.
As if inflation was not enough, now companies have started shrinkflation. This is where they shrink the amount they give for the same normal price. You will see this in just about every food type from cereal to Gatorade these days. Only American companies could be this cheap and get away with it. I tell you…
Long story short we printed up way too much money during the pandemic and gave out way too many disaster loans, to the businesses. Most of these businesses truly did not need the economic disaster loans to survive. The result was way too much money in the economy, which drove up the price of goods and demand for products. Since everyone was cash rich and ready to buy everything they could get their hands on!
On top of that, there has been a shortage of goods since all of the factories have been closed in China. This shortage of goods also helps fuel inflation because the shortage means that the retailers can sell their products for more money. Since there is a limited supply of them. That upcharge also helps fuel inflation. This combo of too much cash and too little goods is a recipe for hyperinflation and that is what we are at right now in this country. This hyperinflation period will fade as the free money dries up and factories get caught up to the demand from the retailers.
The Federal Reserve Bank will continue to make changes to interest rates. But, they have been too little, too late, to be of any help so far.
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