The national average fuel price at the time of the 2020 elections was $2.00. It’s now $3.37 — a 68 percent increase in 15 months. In another five months, that same price will look cheap as energy prices ripple through the economy, which makes them an important indicator of what is happening.
Hedge fund manager and TV personality Jim Cramer said that he expects some of the inflationary pressures in the U.S. economy to continue before it gets better. “As I peel the layers off the rising prices, I keep finding deliberate rules and processes that are safer and cleaner and less authoritarian than anywhere else, but also promote inflation in a seriously negative way,” he said.
Cramer pointed to rules that deal with hours of service for truck drivers during the driver shortages, or policies for hog slaughtering and their impact on meat supplies. He said that these rules are what the government pays for in order to have a safer, better and more free society.
Inflation in the U.S. is at its highest pace in decades, and the Federal Reserve expects to raise its benchmark interest rates in March. This tool is what the banks use primarily to combat inflation and deliver price stability. While Cramer said that he does believe there will be a natural improvement, he pointed to raw material costs as a contributing factor to price increases.
“So many companies saw such large raw-cost increases last quarter that now they have no choice but to pass these costs on to their customers by raising prices now. And those price hikes are hitting you now,” Cramer said.
He also noted that customers will see the same price increase in any store or restaurant in the next two months. The consumer price index (CPI) rose by 7.5 percent in January over the same period last year, marking the highest year-over-year increase since February 1982.
However, these published numbers are not a measure of what a person pays in the next month for groceries, gas, heating or even ammo. Comparing the CPI for 1980s to 2022 is a rigged way of reporting a lower rate of inflation.
What actually happens is that prices rise when demand outstrips supply and when deficit spending is paid for by increasing the money supply and keeping interest rates artificially low. Between now and a disaster scenario, people will likely experience a grinding impact of increasing inflation in their daily lives. The political situation also makes it unlikely for the administration to make a strong effort to curb the climb in CPI or real interest rates.
Based on inflationary periods from the early 20th century up to the 1970s, it is possible that 2022 could see inflation steadily increasing over the 7.5 percent annual rate in January since only relatively limited actions can be taken to curb the inflationary spiral.
If it remains unchecked, inflation could double by November 8, and continue to climb in the first half of 2023.
Republicans like Senator Rob Portman of Ohio, blame the inflation partly on the amount spent in the American Rescue Plan. “You can’t just throw the stimulus in and change the policies on the supply side as well and not expect inflation to rage,” he said. (Related: No end in sight for inflation: Consumers and small businesses will continue to suffer as long as the money printing continues.)
Senator Mitch McConnell, meanwhile, links the high energy costs to President Joe Biden’s policies, such as shutting down the Keystone XL pipeline and limiting offshore drilling. He noted that if the president is serious about providing relief for Americans and cutting Russian President Vladimir Putin’s manipulation of energy markets, then there should be a pause in his administration’s anti-energy policies.
Senator Rick Scott of Florida believes that the solution comes down to cutting regulations. “Stop spending money. Stop making it difficult to open and build a business. Stop making it difficult to run a business,” he said.
Watch the video below to learn more about inflation in the United States.
This video is from the Thrivetime Show channel on Brighteon.com.
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