A gentleman who does work for us sent me a text recently saying the price of his supplies has increased 20 percent, so he wants to increase his monthly fee 10 percent. It was a nice way to ask, and I said sure, especially given that he’s willing to take a haircut on his labor to make the increase more palatable.
Chairman Jerome Powell would be happy to hear this story, as the Federal Reserve prints mightily to push the CPI (Consumer Price Index) to 2 percent and beyond. Though perhaps Chairman Powell would prefer my tradesman to pass a full 20 percent price increase to me.
In a town with a double-digit unemployment rate, price increases are hard to pass on. Although I noticed while shopping for Thanksgiving that a small bag of pine nuts was a full $2 more than the unused, but unfortunately stale, bag I had purchased a year ago.
The Washington Post reprinted a piece from Bloomberg, penned by Ben Holland, with the curious title “With No Inflation in Sight, Why the Inflation Debate?” On one hand, fiscal stimulus is and will be racing through Main Street, some people say. Others claim that “the pandemic hasn’t altered the dynamics of the past dozen years or so when deflation, rather than overheating, has been the big threat.” I might butt in and mention that all stimuli have headed for Wall Street: stocks, bonds, cryptocurrency, and single-family housing.
In 2008, before the markets hit the fan, the Federal Reserve’s balance sheet was a steady $900 billion. As of February 17, central bank assets have footed to 8.44 times that quaint number, nearly $7.6 trillion. The Fed g
Article from Mises Wire