Why's Inflation Higher in U.S. Scary LinkedIn Indicator! I Missed Something HUGE!

    Today’s blog is a “random show” – hitting a few (really interesting) topics briefly.

    Something Huge I Missed: Rising Incomes!

    In my blog yesterday about putting rising housing payments in perspective, I missed one of the most important points: RISING INCOMES!

    Incomes have risen sharply since 2015, particularly in the tech world, greatly offsetting the increase in housing payments.

    I revised the blog (linked above) and recommend re-skimming it for the added perspective.

    The “LINKEDIN” Indicator – Even Scarier!

    A few weeks ago, I blogged about the car wash indicator, pointing out how the absence of ostentatious young men in fancy cars at the car wash is a very accurate recession indicator.

    But, since then, another even more accurate and scarier indicator has surfaced: “The LinkedIn Indicator.”

    As the owner of a business, I am always inundated with messages from sales people who want to be my “best friend,” and who also coincidentally want to sell me something. 😊

    (If you ever get lonely, start a business, and you will instantly have hundreds of new “best friends.”)

    Anyway – my LinkedIn inbox has been inundated with more sales related inquiries than I have ever seen, by a factor of about 10, and now I am certain we are in for a doozie of a recession.

    Money for Nothing and Chicks for Free: Why Inflation Is So Much Higher in the U.S.

    The above subheading is actually taken directly from the famous 1980s Dire Straits song: Money for Nothing.

    It was a great song (well worth a listen) but the band clearly did not understand macroeconomics!

    In this recent Eurodollar University Podcast, Jeff Snider explains exactly why inflation has been so much higher in the U.S. than elsewhere in the world: Americans got way too much money for nothing.

    In other words, Americans received far more stimulus than everyone else via the CARES Act, the Paycheck Protection Program, and the American Recovery Act, among other things.

    This actually put more money in many Americans’ pockets than they would have earned if COVID had never hit, and it drove demand artificially high right when supply was most restricted due to lockdowns.

    It also caused many productive Americans to retire early – which exacerbated supply issues.

    And sadly, American supply and demand issues made inflation worse for the rest of the world too.

    The podcast is short and fascinating, as it sharply rebuts the theory that our inflation was a result of “printing money,” and I highly recommend listening to it.

    Jay Voorhees
    Founder | JVM Lending
    (855) 855-4491 | DRE# 1197176, NMLS# 310167

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