Locator: 49963BIDENOMICS.
AI prompt: the US personal savings rate dropped to one of its lowest points in June, 2022. What was going on in the US economy then?
Bidenomics:
The real reason for inflation: it's still hard to believe that the smartest economists and the smartest CNBC analysts still can't figure out why we had such high inflation in 2022 and 2023. At the end of the day, prices (and, subsequently inflation) are determined by supply and demand. Too many dollars chasing too few of what people want --> higher inflation.
In 2022 - 2024: the perfect storm --> literally overnight,
- the Covid-19 lockdown ended and pent-up demand from US consumers, exploded;
- those US consumer had a gazillion dollars to spend (see above); and, again, literally overnight,
- the US had three million uninvited guests that needed three things:
- housing: that's why rents shot up;
- food: that's why grocery prices shot up;
- used cars: that's why the price of used cars shot up;
- combined with fact that there was a supply shortage of parts that auto manufacturers needed, couldn't get, and cars become a real shortage
- eggs? Oh, give me a break. Bird flu decimated the flocks. This is not rocket science, but the media had to sell the news during the Biden administration, and then under Trump it became political. Quick: what's the price of eggs now and when did The New York Times last run a story on the price of eggs?
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US Personal Savings Rate
I don't recall when I last post the US Savings Rate. But after this morning's job report and the recent booming MMF figures, I was curious.
Link here. If you look at the one-year or the three-year, the US savings rate might be concerning, but the five-year chart show nothing out of the ordinary.
Three-year:
Five-year:
