Censoring Inflation
In today’s environment everyone who thinks against what the media, Hollywood, or left-wing politicians proclaim risks having themselves censored. Even the former President Trump has found himself censored across social media. Why don’t we hear honest talk about inflation? Could censoring work its way into preventing inflation talk as well?
More money has been printed now than they have in their entire history. It doesn’t take a Phd in economics to see that inflation is sure to follow. Put simply, inflation is too many dollars chasing too few goods. We now have over 4x more dollars in the system than we did a year ago and factories and supply chains that are not operating at full capacity because of COVID restrictions. The only reason we haven’t seen inflation yet is because people have been physically barred from spending their new dollars. Once travel and restaurants are back opened up people will begin to spend in all categories more. Economists and the Fed are either naive or purposely holding their tongues about inflation talk.
The Fed Governors have been doing everything in their power to convince the public that there is no inflation and there never will be. One aspect of inflation is that expectation, the thought that a dollar today will buy the same amount of goods tomorrow, drives half the equation. In all Fed speeches, governors from Powell to Kashkari have maintained that inflation is low and will stay low. While by their measures they may be right, they’ve had their PCE/CPI blinders on, fully. The Fed’s measure of inflation has been under-counting housing cost and shrink-flation since measures changed in the 1980’s. Now through speeches governors are pounding home their reality that there is no inflation when the public knows better.
Anecdotal evidence matters little but like a rolling snowball they start to gain mass. So far we’ve seen gas prices start to inch up despite airlines slashing capacity, manufacturers scramble at any price for materials, and just in time for lent, the fish fillet went from 2 for $5 in 2020 to 2 for $6 this year. These one off price increases will start to get noticed more once unemployment supplements and rent moratoriums wear off and people stop focusing on the virus.
The Fed has been playing chicken with a mountain of inflation for years. They will inevitably lose. However, with the COVID shenanigans it will be much sooner than most think. Inflation will show up once too many people get released from quarantine and start chasing too few goods that the lockdown has produced.
Main St. Economics 
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