More Bidenflation

Is there any doubt that the surge in Washington spending is instrumental in the surge in consumer prices?

If there are any doubters, the folks at the Committee to Unleash Prosperity have provided a graphic to make it more clear.

It charts cumulative new spending beginning in December 2020, after Biden’s election. It begins with a $900 billion COVID package that President Trump and Speaker Pelosi agreed to that month.   And it just keeps stacking up from there.  As you can see from the yellow bars, the cumulative spending increases now total $4.5 trillion.

That’s a lot of new spending.  

Meanwhile, the blue line tracks the Consumer Price Increases over the same period.  The CPI was running below 2 percent when Biden came into office.  Soon it had climbed to 5 percent, and then month after month over 8 percent.

As Stephen Moore writes, “The latest White House spin is that inflation isn’t their fault. It’s just an act of nature or something like that.  But Bidenflation didn’t happen as the natural course of events.  Stop us if you’ve heard this many times before on these pages, but inflation sprang to life when the multi-trillions of ‘stimulus’ money drenched the economy.” 

We don’t think a lot more convincing is needed.  By the way, unhinged spending is not limited to the US.  It is a global phenomenon and so is high inflation.

And with that in mind, we repeat our previous report that central banks bought 399 tons of gold in the third quarter this year, almost double the previous record gold purchases.  And when they buy gold, remember that they are doing so in preference to holding US dollars.  

We think they are on to something.