There’s No Inflation? Really?

For years, I have been confused by the government continually telling us there is no inflation.  Last week, the Federal Reserve committed to low interest rates, with some members even saying they will keep rates low even if they start to see signs of inflation.  My question to them:  what data do you look at that shows no inflation?  Have you looked at lumber prices? 

Rising demand has pushed up the cost of the lumber needed to build new homes, and framing lumber prices have increased more than 110% since mid-April, according to a new report from the National Association of Home Builders. Lumber prices dipped in the earliest days of the pandemic, but quickly recovered and then some.

“[The association] estimates that these recent gains have boosted typical new single-family home prices and apartment prices by approximately $14,000 and $5,000, respectively,” according to the report. “Without increased domestic production and reductions in Canadian tariffs on softwood lumber, these higher input prices will slow the market.”,quickly%20recovered%20and%20then%20some.

This is but one example of inflation I see every day.  Health insurance continues to rise.  Food prices have gone up.  Heck, even gas prices are up significantly over the last few months.

Solving our government debt problem only has a few possible solutions: raise taxes significantly, cut spending significantly, default, or inflate the debt.  It is becoming very clear which option our government is choosing.  Dust off the inflation playbook.  You’re going to need it soon. 

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