Why Is Inflation So Persistent?

Can't Stop Credit-Fueled Demand

Source: rupixen

CPI inflation came down as low as 3% in June of this year. Some pundits argued that inflation had been defeated and that we were well on our way to 2%.

I argued the opposite.

Turns out I was right (for now), as CPI came in at 3.7% yesterday. In other words, inflation is back on the rise (for now).

In my piece linked above, I argued that asset price inflation precedes consumer goods inflation and that ETFs for the major indices like the DJIA, SPY and QQQ were approaching all-time highs once again.

When those who own assets have a higher net worth on paper, they tend to feel more confident spending.

What I didn’t touch on in that piece, though, was just how easy it is to obtain a line of credit in the United States and the impact this may be having on inflation.

US credit card debt

Credit card debt in the US recently crossed $1T for the first time ever.

Source: Charlie Bilello

And this is at a time when servicing that debt is more expensive than it’s been in recent years.

Source: Charlie Bilello

Because life has gotten so expensive, even high credit card rates don’t seem to be stopping people from spending what they don’t have.

Credit-fueled demand

The US Federal Reserve has been clear that it’s trying to put more people out of work.

“Oh, you’re just being hyperbolic again, Frank.”

Okay. If you don’t believe me, I’ll let those radicals at CBS news explain it to you: “Buckle up, America: The Fed plans to sharply boost unemployment”

The reason the Fed wants to do this is to reduce demand for consumer goods so to help bring prices down (reduce CPI inflation).

But so long as Americans have access to credit, this will be a difficult task.

And so, with all of that sadness out of the way, let’s move on to something more uplifting…

A Bitcoin-funded trip to the top of Mt. Kilimanjaro

Last week, I had the great pleasure of interviewing Tanzania’s Man Like Kweks.

Also available on Apple Podcasts, Spotify, Google Podcasts and Fountain.

He recently crowdfunded some bitcoin (sats) to fund his summit of Mt. Kilimanjaro.

He made the trek in efforts to bring attention to his educational efforts around Bitcoin.

Also, beyond being quite the adventurer, Man Like Kweks is also a musician (I used one of his tracks as the episode’s intro music) and a man of faith.

In the interview, he shared what he thinks Jesus would have thought of Bitcoin. Very interesting stuff!

I hope you dig :)

And now let’s take a look at bitcoin and the stock for a well-established bitcoin mining company to see if they’re in the buy zone…