Everyone asks, "What's up with these prices?" I know, I do too. But actually I have seen this coming for a couple years. And I will tell you why. Believe it or not, it's not the President's fault. If you remember, he signed a bill that sent money out to just about everyone FOR FREE! It was called the "Stimulus Bill parts 1 & 2", trying the help out people in all incomes, except, people making over $150K a year. Even businesses got money if they filed for it. And NONE of this you had to pay it back. Well, my opinion, that helped somewhat, but hurt us too. Some people got use to laying back and getting paid, and then when that ran out, they thought they would just start their own business. So now no one wants to work, and there is a employee shortage. $15 a hour for entry jobs is good, except some think they should get more and still use their phones while they work and getting paid.
The state of the world (not just United States) does not boil down to one factor, there are many issues, and it is complicated. Let me list the different facets of our problems. And I am no economist but just things I have researched.
1 - It was a confluence of the World's stage pattern of energy choices. Shutting down oil production during Covid, and then trying to crank it back up while countries fought over oil. Our oil from Russia was only 8%, that meant nothing. And then Putin invaded Ukraine, which threw another wrench into an already screwed up oil fiasco.
2 - The cancelling of the Keystone XL pipeline by Biden had absolutely no effect on prices at all. Plus the way it was planned by some self-righteous politicians was sort of slipped and hidden by most. It really did not become a issue until the news media announced it was being put on hold.
3 - The previous administration thought it would be good to print off tons of new money to help the economy. The problem with that is our money is backed by REAL money which the federal government did not have. On top of that, the U.S. Treasurer Secretary misinterpreted the future economy of the U.S. and increased the federal lending percentage. So mortgage loans go up and every bit of money the feds loan to banks, such as car loans, student loans, business loans, etc. When large businesses want to build a store or make capital developments, they do not use their own money, they borrow the money from banks and pay it back as they go. Grocery chains, auto dealerships, even huge corporations practice this way. They use their money for payroll, share profiting and general expenses. And the increased costs of loans rolls down to us.
4 - During Covid, China shut down as tight as a drum. And so did most European countries, In some countries, you were arrested if you came out of your house/apartment for anything except to buy food. Everyone was forced to stay home, thus factories were shut down too, and manufacturing came to a stand still. If you notice, the U.S. gets a lot of items made in China. (Discussion for another time.) We in the U.S. trade heavily with many, many other countries, (Central and South America, Europe, Asia, Middle East and Pacific Countries too) thus our supply chain was interrupted too.
5 - And there is the Ukrainian war. Many auto parts are made in Ukraine such as wiring, ball joints just to mention a couple. They also import oil and produce to much of Europe. If it hurt a lot of countries, it hurts us too. We are a big part of the world trade system. Unlike what previous presidents thought, we can NOT stand on just what we produce and live on. The world trade platform is huge! If one gets hurt, it affects us all.
As I said, it complicated. Sometimes too complicated for most to comprehend. I barely do.
What's the answer you ask? If I knew, I'd be hired to put it into action. But for now, the people in Washington, and in capitals around the world are doing what they can to make it better for everyone.
I will end this with one thought, "I like a movie that ends with 'THE END' so it doesn't leave you guessing what happens next" I see a recession in our and the world's future. Take care and stay safe. This wasn't such a joyous blog, was it? Sorry.
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