Everyone loses with price inflation and always the current White House Administration gets the blame. Well, maybe we need to take a step back. Inflation happens when one of two events happen: either supply decreases or demand increases. Today we have both phenomena present. COVID around the world has drastically reduced the supply of almost every product; and pent-up demand–which had been silent during the height of the pandemic–is just now being unleashed. Cars, homes, food items, building materials, and every other product is in very short supply. Demand–like coming out of a cave after a big storm has passed–is trying to access severely reduced supplies. Take heart!1 This is not a political occurrence; it is the same economic cycle we have seen since the industrial revolution. Whenever a society depends on products made by the manufacturing sector (as opposed to a farming community) we will have supply-demand glitches–they are temporary. While the Federal Government tries to cope with oil/gasoline prices it faces global disruption from the Ukraine/Russia war, OPEC unpredictability, turmoil in Venezuela and Mexico. So solving inflation in the middle of all these unrelated events will take time. Regardless of any Biden promise, world-wide inflation will continue for at least two more years. Blame Biden if that’s your opinion–but it won’t help because whoever lives at the White House during the next term will still be hoping for an end to rising prices. A calm sea always follows a perfect storm. Be patient.
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