Understanding the Real Causes of Global Inflation and Why Stimulus Didn't Play a Major Role

The Economic Context Leading Up to Stimulus

The economy was in a solid growth phase, with manufacturing on the lower end of activity. However, the last thing we needed was a debt-based injection of money into the economic system. Biden's war on oil and renewable energy policies inadvertently contributed to skyrocketing energy costs, which in turn pushed inflation to unprecedented levels.

The Dynamics of the Stimulus

Stimulus measures might have provided some relief, but it's essential to dispel the notion that it was the primary cause of inflation. The real issue lies in the global supply chain disruption caused by the pandemic—a period during which many production lines were closed, ultimately slowing down the supply of goods. By essentially shutting down our production systems, we put the economy in a precarious position. Just as a diesel truck idles during short stops for easier restart, countries around the world found it challenging to restart their production lines post-pandemic.

Think of the global economy as a massive truck that needs to be restarted after a long halt. Countries around the world, akin to reckless truck drivers, turned off their engines during the pandemic. Now, facing the challenge of reigniting their economies, many are struggling to keep up with the demand that existed before the pandemic.

Record Consumer Spending and Labor Shortage

In light of the pandemic, consumer spending hit record highs, bolstered by record high wages and near-record low unemployment rates. The surge in demand for goods was compounded by the "Biden Boom," which involved a contentious four-year campaign against imports, leading to a shortage in almost every sector, including consumer electronics, oil, and even essential goods like baby formula.

The combination of this high demand with limited supply resulted in higher prices. It's clear that the stimulus did not solely cause inflation, as it was only a couple trillion dollars injected into the economy. This amount, albeit significant, was not nearly enough to trigger the level of inflation we are experiencing today.

The Role of the Federal Reserve and Market Makers

Now, the Federal Reserve is taking action by raising interest rates in an attempt to bring inflation under control. However, much of the new money flowed into cryptocurrency and stock market investments, where it benefited the market manipulators, leaving many common people to bear the brunt of the inflation in the days to come.

To conclude, the real culprit behind the global inflation is a breakdown in global supply chains exacerbated by the pandemic, rather than the stimulus measures. As consumers hold more money but supply remains limited, we are seeing the inevitable rise in prices. It's time to focus on rebuilding our supply chains and reinvigorating our global economy to ensure long-term stability.