Published: 1:30 PM, Apr 12, 2022
So the numbers are now in and we know that inflation is moving way faster than anyone in charge of the US economy told us that it would move.
Moving up .6% in one month means we could be looking at double digits in the summer. An absolutely staggering value when central bankers are told to try and keep price inflation at 2%.
Last year we were told it would be settling at a high of 4.3%. As we can see it is not, it is shooting past double that and where it will stop nobody knows.
The main take away from this for me is that we have people running central banks that have little or no clue as to what causes inflation. Staggering.
The US in 2008 was $8 trillion in debt, it's now $30 trillion and the economy measured by GDP has nowhere near tracked that. Printing $6 trillion over the last few years for stimulus was the straw that broke the camel’s back. Absolutely fantasy economic intervention. The US is spending $7 trillion a year just now and last year it made $4 trillion in revenues. This is the train wreck of all train wrecks about to hit.
On purely monetary terms we have to consider that the dollar will lose half it's value unless they tighten.
But despite these obvious reasons for inflation, we are being told that the geopolitical situation is to blame, that is not only nonsense it shows complete delusion which makes me worry as to how we will survive this. We could see several areas of the economy completely collapse in the coming year.
Unemployment in the west will become a massive issue for governments and again I am worried that we will just print more money to keep everyone happy. Causing massive problem feedback.
I remember reading Warren Buffet's notes about investing in equities during high inflation, the companies must make a profit of higher than inflation to actually keep the investment profitable. There are very few businesses listed that would qualify as a sound investment when inflation gets into double figures and I would say those stocks are overvalues just now. It looks to me that tech is in a massive bubble.
So, we arrive at the issue of what is a sound investment just now? Property. The value of property will always remain as it is what everyone needs. It is the value of money that changes relative to this, the most fixed of all assets.