Supply Chain Issues And Endless Government Spending ‘Threaten’ To Drive Inflation Up

The politicians who manipulate the American and global economy are the same people who saddled ordinary working people with devastating consequences resulting from coercive COVID regulations and oppressive measures. The arrogant masters of monetary and fiscal policy refuse to accept their unpredictable and often catastrophic results. That would require intellectual honesty and humility, which sadly seem to always be in short supply.

The skyrocketing inflation hammering the American economy is likely caused by increased consumer demand following the worst of the pandemic. Supply chain and labor woes are also certainly in the mix. One other thing that politicians are likely to never own up to is the spectacular increases in government spending and money creation we have seen in the last two years.

Almost all producers face problems in modeling coming supply and demand issues to set prices and make decisions about how much and what to produce. For example, Heineken CEO Dolf van den Brink warns of “off the charts” production costs inflation that will take retail prices to unpredictable heights. Brewers in his industry are dealing with ongoing shortages as they face continuing challenges in getting products delivered to retail stores, restaurants, and bars.

Brink said it is impossible to predict how much consumer demand will decrease due to inevitable price increases. The models traditionally used in the brewing industry are breaking down. He said that “anybody’s guessing” how demands will stand up to the supply crisis and spiking prices.

Across all food and beverage production sectors, giants like Kellogg’s and PepsiCo have said that they have no choice but to pass on surging production costs to consumers. Brink added that there are severe concerns about delivering products “at any price” because of shortages of truck drivers leaving ocean freight “completely out of sync.”

The Labor Department released the latest producer price index report on Tuesday, indicating a surge to 9.7 percent last month over the last annual period. For January alone, producer costs rose by 1.0 percent, up more than double the 0.4 percent monthly number for December.

Democrats especially are sure to continue to blame corporations seeking “greedy profits” for the continuing inflation disaster they have heaped upon the country.