Via BBC: Why is inflation in the US so high?
Inflation is at a nearly all time high in the US at 8.6%. This is amazingly high, higher than in most other countries in the world.
In an attempt to protect the socialist policies put in place, the BBC points the finger firmly at the people of the US spending so much.
A recent study by the Federal Reserve Bank of San Francisco concluded that pandemic relief packages probably contributed to 3 percentage points of the rise in inflation until the end of 2021 – a factor that goes a long way to explaining why US inflation outpaced the rest of the world.
Oscar Jorda, senior policy adviser at the bank and one of the people who worked on the study, cautioned against reading too much into the exact percentages, but said the overall picture is clear.
“These programmes… were a considerable infusion of liquidity into consumers’ pockets at a time when perhaps industry wasn’t quite ready to respond to an increase in demand,” he said in an interview in May. They “signified a big push of what I would call demand push inflation”.
There you have it. Because you were out of work because of shutdowns and the government handed you a few dollars, YOU caused the inflation when you spent it.
If you had just saved that money then inflation wouldn’t be so bad.
Historically, when inflation gets bad, people spend money as soon as they have it to convert money into hard goods. To put this in perspective of today, people are moving to keeping their vehicle gas tanks mostly full.
The cost, to me, of filling my tank last week vs filling my tank this week was about $8.50. That’s a $0.50 increase in the price of gas. When you are afraid your money will be worth less tomorrow, you want hard goods now. We bought a 1/2 cow because we know the price of beef is going up. We bought more chickens, we know that the price of eggs is going up and making our own eggs reduces our weekly food bill.
In addition to all of the above, the demand continues to grow for hard goods. This also increases prices.
If you are interested in a good introductory book on economics:
Basic Economics, Fifth Edition: A Common Sense Guide to the Economy by Thomas Sowell