Before Regan spoke with Cortes, she provided readers with a backdrop of the word "transitory" and how The Fed ignores soaring prices of goods and services. Heck, it's a brilliant strategy by the Fed because if six months from now prices are still increasing, Chair Jerome Powell will merely say inflation remains transitory. Still, in reality, it's not and becoming more persistent...
Regan asked a very important question during in the intro of the podcast: How long can the middle class handle surging stagflation: soaring gasoline and supermarket prices and barely any real wage growth (on top of new virus restrictions).
She said the 11-14% food price increases at the supermarket are beginning to dent consumer sentiment, adding that middle-class wages adjusted for inflation aren't going as far as they used to. Many folks are living a different life than they were in pre-COVID times, and they're becoming furious that the American dream is collapsing in front of their eyes.
Regan adds a confluence of bad events, such as inflation, souring consumer sentiment, and the Afghanistan withdrawal debacle is damaging people's perception of the Biden administration.
And to circle back to the Fed, she said unless Powell and his gang of monetary wonks begin to taper or at least raise rates in the near-term, the inflationary impact will continue to crush middle America. She added that if inflation is not tamed and the Fed had to resort to former Fed chair Paul Volcker's move for drastic rate hikes to curb inflation, it would severely impact asset prices, such as stocks, bonds, and real estate.
- Source, Zero Hedge
