Marc Cuniberti: Inflation is about to get worse

The latest inflation figures recently released confirm what most of us already know. Inflation is bad and getting worse. In fact, it’s the worst it’s been in 40 years.

There are many factors causing this.

Supply side shortages can be caused by the lack of available workers to staff manufacturing and shipping facilities, soaring energy prices making shipping costs escalate, skyrocketing commodity prices driving input costs higher, the Russian crisis which is taking other commodity offline, and trade restrictions.

Most egregiously is the monetary driven inflation, which is a rise in prices due to spending to fund the various COVID-19 relief programs in the last two years. Those programs range from massive unemployment payments to the CARE programs, the Paycheck Protection Programs, infrastructure spending, and other various bailout and assistance programs.

Seemingly, deficit spending considerations, once a main talking point of the GOP, is seldom discussed anymore in the ivory halls of Washington. To even mention a pullback in relief spending means the trap door to any politician that brings it up.

Although Washington acknowledges, and correctly so, the many current causes of inflation, it misses entirely the monetary cause, which is likely causing a majority of the price increases the American consumer — and global consumers — are witnessing. Simply put, after printing up over five trillion dollars in spending in the last three years or so, the amount is so off the charts, it’s a wonder inflation is not in the double digits already, although it is fast approaching that.

To put a bullet point on the entire blindness of Washington when it comes to monetary caused inflation, more spending programs are being bantered about by both parties.

With the standard of living indexes plummeting the fastest in decades as price increases leapfrog past wage increases, Washington is now talking payments to consumers to help pay for higher gas prices, with the option of repeating such payments should gas prices go higher still or persist for longer than deemed tolerable. Amounts discussed range from $300 to $1,100 per household, with little more detail given at this juncture.

Not to be outdone, our neighbor to the north, Canada, seems just as oblivious to printing press inflation as we are and announced yet another stimulus check (five hundred this time) will soon be in the mail to everyone making $100,000 or less.

No doubt with mid-term elections fast approaching, elected officials everywhere will lean into the public checkbook to shower would-be voters with cash in return for their support at the ballot box.

All this free money sounds enticing, but the question becomes, if much of the inflation is caused by spending on a plethora of past programs, will more programs help the situation or make it worse?

The proverbial observational comes to mind: “Is the cure worse than the disease?”

Or in this case, is the cure the cause of the disease, or even the disease itself?

Many analysts fear that because of the copious amounts of cash now being rained down upon the global inhabitants of the world by governments, a monetary catastrophe is in the making. It will materialize in the form of — you guessed it — even worse inflation.

No doubt, when that occurs, the Washingtons of the world will still fail to see the cause, and put the pedal to the metal once again on their monetary printing presses, and around and around we go, until the paper the money is printed on is worth more than the number stamped on the bill.

Marc Cuniberti holds a B.A in with honors from San Diego State University and is the host of Money Matters carried on 66 stations nationwide. California Insurance LIc# 0L34249. Call him at 530-559-1214 or visit http://www.moneymanagementradio.com

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