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Inflation has hit 5.4% again over the last month in America, which is something of concern when you take into consideration the rising cost of living and the increase in government debt interest payments. There is a strong likelihood that the interest rate could increase to reduce the rate of inflation, but this puts further pressure on the population and will also cause the government debt interest payments to rise especially for new debt issuances. There are alternatives to having high inflation and high interest rates, which can be used to minimise the consequences of the economic problems seen in America. I have written an article that presents an alternative solution, which is linked to below.
some inflation is better than deflation.
In many parts of the world,it is a fact of life,first pain inflicted is rent,if you dont own your own home,you are in shock how much of your paycheck goes to rent.
then your service providers all raise their fees,dentist,doctors,chiropracter,plumber,electric ian.
Then you feel it in consumer staples.
some inflation is better than deflation.
In many parts of the world,it is a fact of life,first pain inflicted is rent,if you dont own your own home,you are in shock how much of your paycheck goes to rent.
then your service providers all raise their fees,dentist,doctors,chiropracter,plumber,electric ian.
Then you feel it in consumer staples.
Inflation means the cost of living has increased, deflation means it has decreased a bit. Inflation also comes with the consequence of higher government debt interest repayment costs for Inflation Linked Gilts. In America 7.5% of the government debt is linked to inflation, so if inflation rises the interest payments on that 7.5% of the debt rises too. That might not be a problem for a short period but if inflation stays high for long periods or if it increases even further then the government debt will spiral out of control.
some inflation is better than deflation.
In many parts of the world,it is a fact of life,first pain inflicted is rent,if you dont own your own home,you are in shock how much of your paycheck goes to rent.
then your service providers all raise their fees,dentist,doctors,chiropracter,plumber,electric ian.
Then you feel it in consumer staples.
The risk of high inflation is not just a problem in America, it has started to become a problem in the United Kingdom too. I have linked to an article I have written about the rising risk of inflation in the UK below.
some inflation is to be expected,the kind of towering inflation in some countries have to do with political instability,currency devaluation.
Examples are Venezuela,Argentina,Turkey and a long list of African countries.
Any head of household should anticipate some inflation,you dont have to be a Nobel price economist.
Price gains are shooting higher across many advanced economies. Consumer demand, shortages and other pandemic related factors combine to fuel that burst.
The risk of high inflation is not just a problem in America, it has started to become a problem in the United Kingdom too. I have linked to an article I have written about the rising risk of inflation in the UK below.
while it was thought a lot of inflation is shortages and supply chain issues and is transitory that may not be all true .
the problem is services and labor have been increasing and that does not go back down .
those who perform a service will not go down in what they charge and are now baked in to the inflation permanently just like those 6% ss increases are
Productivity has soared and automation will continue to increase.
I think inflation from the Trade War, which is still ongoing, is longer lasting. However, re-shoring to North America just means more automation even in places like Mexico.
while it was thought a lot of inflation is shortages and supply chain issues and is transitory that may not be all true .
the problem is services and labor have been increasing and that does not go back down .
those who perform a service will not go down in what they charge and are now baked in to the inflation permanently just like those 6% ss increases are
Now that the BLS has reported 5 months of inflation data it appears the inflation could be more permanent than we think. All the issues over vaccine mandates don't help. Having so many workers quit over these issues can't help any. Will be interesting to see how many business can get the holiday workers they need.
Since it is already October may be a DIY Christmas.
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