January Inflation Expected to be 7.2%, Highest Since 1982

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While the official report has not yet been released on January inflation numbers, the expectation is that consumer inflation in January rose by 7.2%. The highest rate of inflation since 1982. In 2022, however, how we combat inflation will be a very different story. The short story is, we probably won't. Because back in 1982 we had Ronald Reagan's ideas and today we have Joe Biden's. So, how did Reagan fix it? Well, it was not immediate. He was dealing with problems that stemmed largely from Carter's policies. First he had to reduce it. Reagan's plan was to curb government spending (Biden is increasing it), lower income taxes and capital gains taxes (Biden is raising them), reduce the amount of government regulations (Biden by November of last year already added nearly 400 of them, not including the ones he reversed by executive order when he took office) and tighten the money supply. The latter is the only thing Biden (or specifically the Fed) aims to do. The money supply is essentially tightened when the Fed decides to increase interest rates. There has been talk the Fed may announce the first hike in March. The one takeaway here is that if all of the other components of what historically fixed the inflation problem under Reagan are not present in today's addressing of the problem, we are not going to be doing enough, or the right things to actually fix it. There are also, admittedly, other factors that are contributing to today's inflation that were not present when Reagan set out to lay out his plan. But the underlying benefit and fundamentals of what he did would still provide a massive boost to getting inflation down significantly. The bottom line here is that I think inflation is here to stay for a while, and I suspect it is only going to get worse. Unfortunately the Biden administration will not be looking to what has, in the past, always been effective monetary and economic policy. In fact, they won't even take a page from John F. Kennedy's book. Why? Because JFK's economic policy closely mirrored conservative monetary policy, and they just don't believe in it, even though both after JFK and Ronald Reagan we saw massive economic growth and prosperity for at least two decades both times from their policies. For whatever it is worth, hold onto your wallets folks. The inflation we're going to see sucking the life out your dollars will be akin to a Dyson powered not by an outlet, but the entire output of the power plant supplying the current.