By Duncan Smith

The Producer Price Index announced this week was twice as high year over year than economists expected.

Everything from gasoline to food to lumber to other commodities is rising, and quickly.

Worse, the economic policies being enacted by Joe Biden’s handlers are only going to make things worse.

They’re all multimillionaires with their hands on the levers of power so they’re not going to be hurt.

But we will be, all of the rest of us.

It legitimately is time to start thinking about what you need, what you don’t need, and what you can afford to give up because the day is rapidly approaching, without some sort of political correction, when the quality of life in our country will fall dramatically.

From an intelligence report we get:

With this week's Consumer Price Index (CPI) numbers up — a 4.2% year over year (YoY) jump, and a 0.9% month over month (MoM) increase — there's no question that inflation is taking hold. The YoY inflation is less concerning due to the base effects of disinflation a year ago, although monthly increases in food and energy prices will weigh on economic growth. While the Fed says inflation will be 'moderate and transitory,' there are some reasons to believe that inflation will finally hit the United States in a sustained way. 

The top reason is demographics. According to a 2018 study from the Bank for International Settlements, '[I]nflationary pressure rises when the share of dependents increases and, conversely, subsides when the share of working age population increases.' The researchers observe trends between 1870 and 2016, and conclude, 'Our findings suggest that the deflationary effect that the age structure has had on inflation for the past four decades will reverse over the coming decades and become inflationary.' Aging demographics in the United States could add about 3% annual inflation, according to the study, although the authors state that this isn't a projection. ( You can read the BIS study here: https://www.bis.org/publ/work722.pdf)

The latest data from the St. Louis Fed shows that the labor force participation rate among those aged 65 and older decreased substantially during 2020 and into 2021. Prior to 2020, the labor force participation rate for this demographic had been on a decade-plus upward trend (graph below). Working people tend to be disinflationary, and a growing number of post-2008 crisis seniors continued to work past retirement age. I question how strongly the 65 and older demographic will re-enter the post-pandemic workforce. A permanent reduction should lead to higher inflation.

Finally, the report concludes:

Maybe inflation will be transitory, as the Fed claims. The Fed was 'surprised' by higher than expected CPI, so I do question their judgment. … The bottom line is that if inflation does continue to worsen and become sustained, then today's prices will look great a year from now. You might consider loading up on daily and monthly goods now, rather than face higher prices in the future.

Plan accordingly. 

President Trump is Breaking Down the Neck of the Federal Reserve!

He wants zero rates and QE4!

You must prepare for the financial reset

We are running out of time

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