One of the hot topics during for the current administration that has bled into the topics of this election season is the economy. Let’s be honest, it’s been brutal. We have seen prices increase in every major category – energy, food, transportation, building supplies, consumer goods, and the list goes on.
The big question is why.
What has driven us down this road? It is a few different things.
Let us start with money. According to the Kobeissi Report,
“Since 2020 the U.S. has printed nearly 80% of ALL US Dollars in circulation today.
To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years.
We are paying the price for trillions of Dollars that were printed seemingly overnight. Why is the Fed surprised that inflation hit a 40-year high?”
If you look at the chart, there is a SHARP increase of circulated currency since 2020. This additional money drives inflation up at a quick rate. The impact of supply and demand is the straw that stirs the drink. If it doesn’t change and too much money is available then inflation rises.
Why does too much money drive inflation up? It works like this – when there is a larger supply of money chasing the same amount of goods and services, sellers can raise prices due to increased demand, leading to a general rise in price levels across the economy, which is the definition of inflation; essentially, "too much money chasing too few goods."
The next issue is competition. If big government can regulate the economy and eliminate competition, then we all lose. That is not the free market economy America was based on.
Let us think about energy. On day one of the current administration, the Keystone XL pipeline was eliminated costing Americans 11,000 jobs. Why? That eliminated competition and gave the government even more power to regulate and control our energy dependence.
In an article on the government’s Energy and Commerce website from November 2022, they cite that,
“Cancelling the Keystone XL pipeline was only the first of many attacks from this administration on American energy production. Since then, President Biden’s anti-American energy actions have included:
- Suspending oil and gas leasing on federal lands
- Delaying permits for energy infrastructure and pipelines
- Draining our strategic petroleum reserves, compromising both our energy and national security
- Begging foreign regimes like Saudi Arabia, Iran, and Venezuela for more oil
- Emboldening Putin with Nord Stream II
Forbes published an article about the economic hardships refineries face due to the bad economic polices,
“If you are a refiner forecasting billions in losses—and you require massive investments in order to keep your refinery operating safely and in compliance with the laws—you may very well make the decision to close down.”
Competition is another major impact. Remove it and the result is inferior products and services because the buyer has little to no alternative options. Therefore your costs out pace your revenues and you are forced to close your doors. Eliminate competition and you eliminate the life blood of any business – sales.
Now let’s think about the cost of labor. When inflation, including food prices rise, and energy costs increase, we see an increase in labor costs because people need to make more money to live. These labor costs then have a direct impact on cost of goods and you get hit with another wave of increases.
Therefore right now is the most costly time in American history.
I bet this gets you excited, doesn’t it?
The key to turning this around is simply reverting back to the free market system where the government has less involvement, minimal regulation, and no price fixing. It is in this set up where innovation, collaboration, competition, and consumer based satisfaction thrives because there is a real incentive.
Companies begin making better cost conscious decisions in order to win over more buyers and command market share.
The simple macro-economic laws of supply and demand begin to more naturally follow suit and we rediscover balance.
As you consider who gets your vote in November, think about these ideas. Who will re-ignite the free market and let it drive us back to economic recovery? Do not be a blind sheep just following the media. Stop. Think. Decide.
We are in this together.
Sources
https://x.com/KobeissiLetter/status/1695809591047491857?lang=en
