Global Macro Monitor
APR 25, 2018
Anecdotal evidence, while not proving broader points, is interesting. And enough of it becomes the basis for further investigation that does verify trends.
In-n-Out is known to pay employees well and is not McDonald’s or Burger King. Privately held, it is not beholden to every last shareholder for every last penny of earnings. But the pervasive creep of inflation, sure enough, marches ahead.
If wealth without work is one of Ghandi’s seven deadly sins, paper wealth without production that is consumed is surely inflationary. Go no further than the real estate market to confirm this thesis.
How ironic it is the global central banks that have printed trillions over the last decade to generate the asset inflation to stimulate demand to keep the global economy afloat have not suffered the inflationary consequences of their actions. At least, not yet.
The rich have become richer and spend proportionally less, and the poor have become poorer and cannot spend more.
It is clear the minimum wage in California is nonbinding — that is irrelevant — and all the bluster about raising it would cause unemployment is just that, bluster.
During softer economic times, when the minimum wage is binding, the story changes. Not now, however.
Nevertheless, it did feel prices have risen for a burger, fries, and soda since the last time I was in an In-N-Out. I think it cost me around $8.50 today.
Food prices are rising. Gas prices are spiking. My Verizon bill suddenly spiked $150 per month with new surcharges, so off to Sprint. Moreover, there is no labor to rebuild the housing market in our fire-ravaged county.
So, of course, there is no inflation.