Hold onto your seats, folks! We’re diving into a whirlpool of economic decisions that could potentially trigger the next wave of consumer price inflation. This isn’t just another news cycle; it’s a seismic shift that could shake the very foundations of our economy. Are we on the brink of an inflationary spiral, or is this just another false alarm? Let’s dissect the recent policy moves by the Biden administration and their potential impact on inflation.
The October Curse: A Historical Perspective
October is notorious for many reasons, not least of which are the stock market crashes of 1929 and 1987. Could 2023 be the next in line? While there are no certainties, only probabilities. But October has another claim to fame—or infamy, depending on your perspective—the return of student loan payments for some 35 million people.
Student Loan Payments: The New Variable
The Biden administration has been playing fast and loose with student loan repayments. Despite a Supreme Court ruling against it, the White House has found loopholes to cancel student debt. Is this a blatant disregard for the rule of law, or a desperate measure to alleviate financial stress? Either way, it’s a move that could stoke another wave of consumer price inflation.
The Velocity of Money: A Hidden Catalyst
It’s not just about creating or destroying currency units; it’s about the velocity of money. The administration’s actions could shift funds from low-velocity savings to high-velocity checking accounts. Could this be the tailwind that inflation needs to spiral out of control? The government’s actions have a ripple effect. By canceling student loans, they’re essentially taking from savers to give to borrowers. This could exacerbate inflation by converting low-velocity money into high-velocity money. Is this a calculated risk or a reckless gamble?
The Political Angle: Buying Votes for 2024?
Let’s call a spade a spade. These policy moves are likely aimed at buying votes for the 2024 elections. Is this a short-term gain for a long-term pain? The numbers are adding up, and they could directly impact consumer price inflation moving forward.