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Ready Cash, Pent Up Consumer Demand Fueling Inflation


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“Inflation is has been and is a continuing discussion here at HeffX-LTN since the beginning of this year and the Keynote is: the Fed wants it to run” — Paul Ebeling

A May 2021 poll conducted by Fortune and SurveyMonkey found that 87% of American adults are either concerned or very concerned about inflation according to Fortune Analytics.

Just In from contributing international economist Bruce WD Barren, as follows:

“Inflation is caused when demand exceeds supply where during the pandemic production was dramatically reduced so supply became consolidated. However, now the consumer public believes that  the pandemic is over and product demand is back..

Fueling demand is also investable cash and employment, So, let’s look first at  investible cash which is a contributing factor to demand, Well the stock market continues to reach new highs causing capital liquidity, and employment is going in the right direction with job vacancies exceeding unemployment.

Now, let’s turn to what I consider further fueling factors to increased and continual inflation.

If one follows the various comments above, consumer prices will continue to rise, So, what do you think will occur if inflation is above expectations if more people are given incentives to return to work instead of encouraging otherwise for they want to return to work. However, many are encouraged not to do because of the ‘gifts’ the government is doling not to work.

Looking at Massachusetts: the average reported annual family income is currently $85,843, yet unemployment benefit income is $64,785 with dependents or 75% of their average family income. However, the inflation rate for Boston according to the Bureau of National Statistics, the State’s largest city, is only 1.6% compared to the current national rate of 5%. 

Wow, let’s all move there despite its cold Winters!”

Then, there are latest statistics reported by the US Government: current unemployment rate reported is: 5.90% but based on the following is really 6.3% (9.5M divided by 152M), which is currently how our Government reports questionable ‘facts’ for: the latest employed persons are: 152M while unemployed persons are at 9.5M even though job vacancies remain close to 10M persons.

The Conclusion Q&A

Q: Does the problem of  inflation increases the difficulty to handle based on the above?

A: YES because the more people that go back to work which should be one of our Government’s primary objectives the more difficult it will be to control inflation, because there will be more capital available caused by new employment on the recovery’s expansion.

“The solution is complex and is not solved by a wave of the wand as policy makers would like us to believe for prices will be driven up because of the pandemic which has caused more pent-up demand.

The means prepare for inflation as it will be a continuing concern for the average American who are just squeaking by with their new disposal dollars that will become more available to spend, even for necessities such as food, gasoline (both of which are not in the current calculation of inflation) and housing as we are already experiencing.” opined economist Bruce WD Barren in an interview Friday evening

Have a positive holiday weekend, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.