June 3, 2022

Updated: Jul 29

Inflation. The Federal Reserve's printing press is not just a current factor. The compounding effect of printing more money since the establishment of the Federal Reserve in 1913 must be accounted. Have you ever talked with your parents, grandparents, or somebody else older than you concerning how much (actually – how little!) they had to pay for bread, candy, gasoline, etc. Yes, of course, there were worse times and better times since 1913, but it is this very factor of pricing and its ups and downs in the economy, that continually factor into our immediate day and age. Sometimes businesses and the Federal Reserve do not adjust to changing market dynamics. For example, back around May 18th Target posted a 52% profit drop, but reported a 4% growth in sales – what? How does Target make money but lose so much more money? Target reported their in-store expenditures did not match overall expenses. Now think back to over a year ago when the Federal Reserve had been stating inflation was “transitory”, but in November last year, Fed Chairman Powell admitted inflation will linger into 2022 with the Fed to take measures to prevent inflation from becoming "entrenched". President Biden stated inflation was only temporary. That kind of language by the Fed and Biden left room for ambiguity. What do I mean? Well, what does the Fed mean? Not entrenched can be an occurrence in 1 day, 1, 10, 20 years, or other end point; forever entrenched is not their stated goal. Once inflation drops the Fed can point at the lower inflation and declare – see not entrenched! Now back to my original point on the factor of history. Here is a quote from Tim McMahon back in 2015, “The Consumer Price index (CPI-U) for January 1913 was 9.8. The CPI-U for September 2013 was 234.149. This means that something that cost $9.80 in January of 1913 would cost $234.15 today (my emphasis)!" In other words, $234.15 might seem high but $9.80 bought the same thing. Wages were lower in 1913, but the dollar was stronger, went further, and thus, in 1913 a smaller amount of money had more purchasing power. By mathematically adjusting for inflation, which is why the same thing cost $234.15 in 2015 compared to 1913, the purchasing power of the dollar may be measured (McMahon's website is a treasure trove of information if you want to know more). What I do know are prices are going up while the people I know have seen no wage increase to compensation for the recent inflation.



Powell's attempt to avoid "entrenchment", Biden's "temporary", and now on May 31st U.S. Treasury Secretary Yellen's admitted she was wrong and inflation was not transitory, means? Entrenched? Transitory meant inflation was not going to be entrenched, so now inflation was entrenched since it was not transitory? Again with the ambiguity. For the sake of argument, maybe all three meant the same thing somehow in some quirky way. What is known, aside from the higher prices with less pocket money, inflation had been rising since 1913. So, if I take the words of those three government officials out of context, then maybe the inflation had been entrenched since 1913. After all, unless the U.S. government stops printing money and comes up with a more stable way, if it insists to impose regulatory measures upon the economy, what used to cost $9.80 will cost $683.45. I hope in Christ, in that scenario, I am paid in wheelbarrows. And since I am still speaking out of context, I really doubt Biden wants temporary inflation and Yellen wants to rid the entrenched inflation since 1913, because that would mostly likely mean "End the Fed". Start canning, we are!

(Not ours, but we picked up some potatoes to can. We have been storing food. As I have been saying, if nothing happens then we bought and stored tomorrow's supper.)


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