Loading ...Please first one statistic. From 1970 to 1980 the CPI increased 100% while the DJIA increased a net of 3.5%. End of stats.
I finished the Army and then college in 1971 when inflation was just getting started, thanks to government spending on Vietnam war (thanks for the travel “opportunity”), the space race, creation of Medicare, and the new War on Poverty aka the Great Society. All combined they were far less than our government has just printed and given away for nothing in return. That is the stuff of pure inflation, but just like last time, it takes a little while to take hold. Other differences from last time:
- It was 1977 before Americans could own gold.
- The baby boom was more and more in the workforce.
- Inflation psychology drove purchases of major appliances, cars, and houses. Houses especially. Buy a house with payments you can’t afford today, because you’ll get a raise next year and be able to afford them, plus next year the house will cost 10-12% more if you wait. That popular approach bit thousands when the music stopped and they had no chair. Suddenly people had houses they couldn’t afford and they didn’t get raises, plus the same house across the street had been foreclosed and was for sale for 20% less than you paid for yours. The end of inflation can be as painful as inflation itself. Or worse.
- Slogans. I remember WIP (Whip Inflation Now) buttons. How about, during the gas shortage, “Don’t be fuelish!”
- Illegal aliens. We didn’t have 30 million of them expecting amnesty and welfare–which now will necessitate printing even more money.
- On the other side, we didn’t have 1.4 billion Chinese depending on sales to America. Huge unknown factor that could mitigate or exacerbate the inflationary forces at work here, depending on how the CCP decides to take advantage of our problems.
I started complaining about this before the first big giveaway last year. Giving away money for nothing can only create inflation. The only real unknown right now, is how will the DNC blame inflation on Trump next year during the midterm elections.INFLATION===