A response to a comment; If the covid stimulus is spent, why is inflation still so high?

If the inflation was caused by the Covid stimulus and direct cash payments to Americans, shouldn’t it be ending on its own pretty soon, given that Americans are poorer than ever? The jolt is gone.

Carlos

The covid stimulus was only the beginning of a grand plan to punish the world with inflation

Initially, covid created massive supply chain issues simultaneously to the monetary injections. The results were clear

As you read this, please understand that there are no mistakes from the top levels of the monetary and fiscal authorities. While we may believe that certain actions from the top are foolish or misguided, I submit that this ongoing inflationary wave has been executed as part of a multi-step plan.

Based on my ongoing observations, I have to believe that these PTB wish to establish an everlasting inflationary cycle that will grind the people to a nub. It is just part of a grand plan. Remember, there are no mistakes here.

Okay, with this preface out of the way, let’s delve into some specifics.

  • First, the inefficiency of the covid stimulus kicked off this ongoing inflationary spiral as this money injection caused massive waves of demand-pull inflation. I knew enough about economic theory and public policy to know that these stimulus programs were engineered with purpose, because their future effects on the asset markets seemed obvious to me. The PhDs at the Fed certainly knew of their ramifications as well.
  • Second, the central banks knew what they were doing by allowing their easy monetary policies to be maintained for much longer than was needed. We estimated that by the end of 2020 the Fed needed to at least begin raising the Fed funds rate. This reluctance helped to undermine confidence in the central banking system.
  • We are here. The economy has faded and the stimulus is now consolidated onto the balance sheets of those with the income-generating assets, but the supply side issues remain.

    Third, the ongoing supply-side constraints seem to have a centrally managed source. If the entire globe and all the national governments climbed aboard the covid bandwagon with almost identical rules and vaccine mandates, then it’s safe to assume that the ongoing bottlenecks and constraints have a centrally managed source as well. Why have there been so many coincidences in the past couple years that have all worked, without exception, to drive up prices via supply side shocks?

  • Fourth, this sudden new war against the reformed Soviet Union seems to be oddly timed to coincide with these supply chain issues. It only adds insult to injury.
  • Fifth, the global economy has been rapidly transitioning from a relatively free economy with less restrictions to one that is now directed by powerful edict. Through the excuse of the covid crisis, the world has been quickly transforming into a Soviet-style command economy. Turn in your guns, please.

War: This nascent and escalating military conflict has caused the world to divide into at least two separate camps. As this adjustment progresses, prices will continue to escalate due to the inefficiencies that are created from a less cohesive global trade regime. Its odd timing also smells of being manufactured, with both sides under orders to act as they are. While this conflict is being portrayed as a dialectic of clashing philosophies, its immediate effects are punishing the world’s population with ever increasing scarcity and higher inflation.

Oil and gas industry faces a hostile government: I marvel at the openly hostile stance of the Biden regime with the domestic oil and gas industry. Rather than encouraging the industry to expand supply, the Biden regime has expressed only recalcitrance instead of cooperation.

Any president who truly wishes to alleviate the pain of the average worker should be encouraging the energy sector to increase production as much as possible. Instead, it seems that Biden wishes to impose windfall taxes on production and profits. Instead of helping to expand refinery capacity, it seeks to shut it down.

If I were president, I would be working with the energy producers and guarantee certain rules and regulations, which would provide a stable framework that these upstream producers could rely upon to ensure future investment for increased production. The Biden regime even raises lease fees on government lands and continually changes the lease rules to make it more difficult for drillers to plan. The current Federal government has done everything it could to undermine production at the worst time. The only answer I can provide you is that the powers that be are doing this intentionally.

Covid’s everlasting impact on housing and rental markets: The covid lockdowns, rent moratoriums, and heavy-handed restrictions are still impacting us in a number of ways.

The rent moratoriums, while no longer in effect for the most part, have caused many of the small mom and pop landlords, which traditionally charge less than full market, to disappear entirely. This only works to centralize the rental market into the hands of the large institutions. The mom and pop investor effectively provided a subsidized form of rental housing to the tenant and the government authorities knew all about this.

For instance, all of my non-subsidized rental properties are currently leased out at rates that are anywhere from $400-$1,000 below full market rent. I’m fine with this as I still make a profit, but these properties may not be in the best shape, since it is difficult to remodel a property with a long-term tenant inside. Unfortunately, for every person like me who remains in the business, there is someone getting out or deciding to no longer rent out their properties. The government agencies implemented all of these heavy-handed restrictions on purpose in order to flush out as many small investors as possible.

As the SFR market is gobbled up by big money, rents will continue to rise higher. Only the best prepared and experienced small investors can compete with these giants. As a result, rental housing supply shrinks, and prices rise.

Covid restrictions destroyed the competitiveness of small businesses forever: While most of the covid restrictions have been lifted, their effects are long-lasting. The weight of the covid restrictions have resulted in driving many small businesses into bankruptcy. They can no longer compete with the big boys and can no longer navigate the ridiculous burden of extra regulations. Only those firms who have economic scale can make it. As competition shrinks, the power of each economic sector consolidates and pricing power increases.

A Soviet-style command economy: In essence, the world’s governments as well as the global economy have all transformed very quickly over the past two and a half years into a more centrally managed regime. The precedents have been set and there’s no going back now.

All the factors I listed are the result of central planning. There are no mistakes. As the world metamorphoses into the finished product of the Great Reset, we will evidently continue to experience painful inflation; the actions of the authorities only indicate as much. All of these adjustments happening simultaneously are not by coincidence. Welcome to the new world order and the great reset.

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6 thoughts on “A response to a comment; If the covid stimulus is spent, why is inflation still so high?

  1. Thank you ZeroHedge and its copycats….
    ———–

    The Great Recession misled millennials: It made them think high home prices will eventually come down

    https://businessinsider.com/home-prices-wont-come-down-millennials-cant-afford-homeownership-2022-6

    •The housing markets of the mid-2000s and early 2020s share some similarities.
    •However, the end of the two hot cycles will be very different in nature.
    •That’s bad news for prospective millennial buyers hoping to see home prices fall.
    History often repeats itself — but when it comes to the current housing market, don’t hold your breath.

    If you were a homebuyer in the mid-2000s, today’s hot market might look eerily familiar. Like many of your fellow Americans, you might be wondering when this housing cycle will come to a close and bring prices back down to earth.

  2. A nicely crafted propaganda piece on how renting is better than owning. Let those large real estate investors do all the dirty work for you. Blackstone is looking out for the average person.
    ————

    https://www.benzinga.com/real-estate/22/06/27633682/unaffordable-housing-is-causing-a-boom-in-built-to-rent-communities

    Excerpt:
    Demographic Shifts
    Millennials are coming of age with the oldest millennial being 40 years old. As they age, millennials likely want to move on to the next stages of life like getting married and starting a family.

    However, most millennials have significant student debt with the average debt being $37,014 in 2022. With rising home prices and mortgage rates, homeownership is becoming even more out of reach for this generation.

    Larger multi-family build-to-rent properties can help older millennials live in a house suitable for raising a family. Many of these properties can also be in suburbs and close to good schools.

    As renters, they won’t need to deal with paying to repair a leaky toilet or broken roof, which is the landlord’s responsibility. Many of these unexpected expenses can set millennial families back since the average cost to repair a roof is $1,017.

    1. ‘We’re all afraid’: Massive rent increases hit mobile homes

      Park rents are doubling or tripling, as high demand, low inventory and a rise in corporate owners take a toll on one of the nation’s biggest sources of affordable housing

      Private Equity firms have been rapidly buying up mobile home parks over last decade, often using funding from GSE lenders Fannie Mae & Freddie Mac. Once they take over one of their first moves is to raise rent”

      https://www.washingtonpost.com/business/2022/06/06/mobile-manufactured-home-rents-rising/

  3. The CPI numbers came in way hotter than expected. The overall year over year number came in at 8.6%, versus an 8.3% rise estimate.

    The month over month number came in at 1.0% versus the 0.7% estimate.

    Real earnings dropped another whopping amount, falling at -0. 7%. Last month’s drop was -1.1%.

    The typical wage earner is getting doused.

  4. Holy moly. This is disgusting. We are watching a puppet show and we’re the audience and the host is pissing all over us, even after we paid to watch.

    1. Noticed something about the news nowadays? It had been going on for such a long time so….

      Absurd, brainless, full of wordings fanning emotions and the copy and paste-like nature.

      Last week, supplies of fresh chicken have stopped in Singapore due to lack of chickens in Malaysia. Lack of fishes too.

      Just today we’ll be starting to sell those ready-made 3d printed lab grown chicken meat to the local market. Starting on the 3d printed fishes as well.

      How can all these be a coincidence I mean, when monkeypox was being rehearsed and have worldwide news spamming to report it as frequent as possible. It’s already 1k cases somewhere now, couldn’t believe it anyway…. gonna be the same crap as our chicken and with our monetary / covid nonsense. They already had solutions waiting to walk us into our cells.

      Soylent bean got the year right at least.

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