Last week, we covered inflation and some of the drivers for it, mainly corporate greed. ‘History doesn’t repeat itself but it often rhymes’ is a phrase we can use when looking at inflation ‘stories’ and, in particular, who gets blamed for it. There is often a boogey man, but the accounts of the energy companies, banks, supermarkets, and others don’t lie. They are making money out of your misery.
Inflation generally occurs when there are too many chasing not enough. Inflation is monitored in consumer prices and also in consumer services and goods. The real inflation has been in assets, and assets that the very wealthy have, and those assets have been much greater than inflation of consumer goods and services. They occur, for example, when the central banks pump money into the banks to subsidise them. The wealthy’s vote matters: the large financial institutions, the investment banks, the high-net-worth individuals. These are the assets inflated by the central bank’s actions but not what the Fed or central banks per se talk about, because, well that’s not the narrative.
The monopolies who control prices, the sanctions on Russia. None of these are talked about and won’t be quelled by the nuclear impacts of using interest rate rises on mortgagees. Mortgagees just aren’t the influencers of that inflation. Remember there wasn’t a shortage of gas or oil in early 2022, but prices rose, because oil companies knew they could. That’s when they should have been slapped with windfall taxes to curb their behaviour, instead of allowing them to continue to do so.
