MCViewPoint

Opinion from a Libertarian ViewPoint

EconomicPolicyJournal.com: There is No Price Inflation (As Long as You Don’t Eat)

Posted by M. C. on September 12, 2020

https://www.economicpolicyjournal.com/2020/09/there-is-no-price-inflation-as-long-as.html

As can be seen in the chart above, the 12-month annualized price inflation rate dived after the COVID-19 lockdowns started and only started to climb after the May bottom.

Now, the annualized Consumer Price Index through the end of August stand at “only” 1.3%.

But breaking things down a bit, things look much different.

Food prices are soaring. Meats are up 7.1%, dairy and related products are up 5.7%, non-alcoholic beverages are up 5.1%, limited service meals and snacks are up 4.8%, tobacco and smoking products are 5.0% and medical care is up 5.3%.

What is driving the general index down is declines in goods we are not using anymore, or are using a lot less. Airline fares are down 23.2% and energy is down 9.0%

But the goods people are actually buying are way up.

It should be remembered that President Nixon in 1971 imposed wage and price controls when the CPI was only 4.0%. Most food prices are climbing at a faster rate than this now.

I fully expect the general CPI number to continue to climb as the prices that are declining start to bottom out and the climbing prices will have more of an impact on the overall CPI number.

Sometime next year, I expect price controls to become a very real possibility regardless of whether Trump or Biden is president.

RW

Be seeing you

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: