I am not convinced that our inflation isn't really just a different name for our dollar becoming worth less and less due to the incredible creation of American dollars when the administration was trying to deal with the pandemic with, literally, trillions of new dollars.
Now throw in the incredible greed of the oil companies!
this is another of them "in the fullness of time" things.
Yes, the government invested vast amounts of money on things during the pandemic, but that is not what caused inflation. The cause, instead, was the recovery. Infrastructure spending does not cause inflation.
There are two primary drivers of current inflation -
increased demand, because more people have money to spend on "things" (as we are currently at "full employment"), and
reduced supply - primarily the after effect of supply-chain disruption (including the war in Ukraine). That's it, and we are going to be living with this for awhile.
Gross price-gouging is driving up inflation. "ExxonMobil, the country's largest oil company, reported its net profit more than doubled to $5.5 billion from a year earlier. That was even after booking a $3.4 billion charge from exiting its operations in Russia. Meanwhile, Chevron reported its highest quarterly profit in nearly a decade, while Shell posted its highest earnings ever."
Meanwhile, they are not increasing production substantially - dragging their feet to increase prices. "Oil companies are increasing production, but they are doing so measuredly, given the pressure they are under from investors and given that they are constrained by supply chain and staffing challenges." The good times are rolling for Big Oil. 3 things to know about their surging profits
The good times are rolling for Big Oil. 3 things to know about their surging profits (NPR)
Broadening the picture, food prices are tied to fuel prices and scarcity. Russia and Ukraine are significant producers and exporters of several commodities including wheat, corn, sunflower oil, and fertilizer. "Beginning in February 2022, already elevated global wheat prices surged in the wake of the conflict between Russia and Ukraine, who together accounted for 28 percent of all wheat exports in marketing year 2020/21." Meanwhile, "Throughout the current marketing year (2021/22), tight supplies have been forecast for key exporting countries including Argentina, Australia, Canada, the European Union, Kazakhstan, Russia, Ukraine, and the United States. Collectively for these countries, ending stocks are projected at the lowest level since the 2013/14 marketing year."
U.S. wheat prices surge in wake of Russia-Ukraine conflictt (USDA)
Then there is real estate. "2022 has been difficult for those trying to afford a home. In January, home prices were rising fast, but at least mortgage rates were near record lows, offering some comfort for those trying to afford a home.
That’s no longer the case. Mortgage rates have quickly raced toward 6%, rising two whole percentage points since the start of the year. And at the same time, home prices have kept going up, although the rate of increase has started to slow a little bit." ... "The median sales price for an existing home in May was $407,600, up 14.8% from a year earlier, according to data from the National Association of Realtors (NAR). Home prices are rising dramatically, but the pace has slowed a little bit in recent months. Sales prices were around 20% higher year-over-year earlier in the year."
"The supply of available homes is down, due to fewer people choosing to move out of existing homes and the underbuilding of new houses in the past decade. “We have not been keeping pace with the demand for homeownership for a decade now,” says Clare Losey, assistant research economist with the Texas Real Estate Research Center at Texas A&M University.
Demand is higher because of demographic shifts – millennials are in their prime homebuying years – and the rise of remote work is allowing more people to move further from jobs and city centers."
Waiting For Home Prices to Drop? ‘You’ll Likely Be Waiting for a Long Time,’ Experts Say (TIME)
