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Originally Posted by RICH1
Who really understands Supply Inflation? How are high Interest Rates going to control rising labor and material costs? Does demoralizing the American citizen ever create a positive growth experience for the future of this country…sales of “ happy pills” by the Pharmaceutical companies are reaching an all time high..
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I'll take a shot at that. Supply inflation is caused by the higher cost of a barrel of oil due to Russia's war with Ukraine. Also, China mismanaged its Covid problem which leaves fewer imports from China which drives up prices, resulting in increased inflation. The answer to the 2nd question is that the FED uses its only tool, the prime interest rate increases, to make large companies and home buyers pay more for loans thus discouraging building more factories and homes. The ripple effect is like applying BRAKES to the general overheated economy. Thus hoping to cool the general economy down. many experts think that the FED began the BRAKING too LATE this time and now may NOT get it exactly right - thus driving the economy into a recession. Historically, the FED has misjudged roughly 80% of the time.
As to "happy pills"........I believe that the Pharmaceutical Industry got EXTRA greedy and OVERHYPED oxycodone. Then China and maybe Mexico wanted to cause chaos and make drug money in the US and ended up supplying Fentanyl, which has succeeded in killing a whole middle age demographic group in the US. Lots of ruined lives!!!!!!!