Inflation and High Interest Rates Are Here to Stay

There has been an interesting shift in the markets recently, primarily in regard to an awareness that inflation actually isn’t going to recede to a low level any time soon and that interest rates will remain high for an indefinite period, and the consequences of this combination isn’t good for the economy or consumers.  Inflation will stay up in part because debt service costs for companies grow as interest rates remain at very high levels and those debt services costs are one factor in how companies price their goods and services.  Gas prices are rising and since Bidementia already drained the strategic reserve, he can’t do it again to try to reduce them.  Health care and health insurance premiums are just beginning to increase.  Interest rates will remain where they are because of the inflation and because we have so much debt it is getting more difficult to find people to buy it.  High rates also reduce consumer disposable income.  We are entering a period akin to stagflation in which you get both low or no economic growth and high inflation.  It is miserable for consumers and the country’s financial condition.

As this wears on, one positive is that more voters will tire of the whacked pro(re)gressive economic and spending policies and see them for the fraud they are.  That short term high from the absurd excessive spending only lasts so long and the withdrawal is very painful.  So we might get a swing away from whacked Dems, but leaders in both parties have ignored warnings about the impact of huge deficits and massive debt growth.  And now we will have to live with the consequences, which will be a reduced living standard for everyone.  I and many others foresaw the coming inflation and interest rate increases when Trump first started the spending binge, but the groundwork was laid as far back as the Bush administration when trillion dollar deficits were regularized.  I knew that politicians would be too weak and afraid to do the right and unpopular thing and rein spending in.  That failure is going to cost us all.