The Impact of COVID-19

The world has been dislocated by the COVID-19 pandemic in ways most of us cannot comprehend. Shortages, higher prices, and few of us are willing to work in low paying jobs with no future are outcomes of this world wide catastrophe.

When fewer items are available, consumers are willing to pay more to obtain the item—as outlined in the economic principle of supply and demand. The result is higher prices due to demand-pull inflation.

Employers have faced a number of challenges throughout the COVID-19 pandemic — most recently, a labor shortage. In order to protect profitability, companies will have to pass on the additional costs to the consumer, adding to inflationary pressures. 

There is a cargo ship bottleneck trying to get into ports along the California coast. The supply chain is backed up and affecting businesses all the way down to the consumer. Another in inflationary pressure.

Add social behavior caused by the COVID-19 pandemic and the world is confronted with an inflationary period with no ending in sight.

Government solution of aid in the form of unemployment benefits, regulations protecting tenants against evictions, and other programs to protect the unemployed causes many to believe the United States is becoming a socialist society.

Those “experts” writing their opinion pieces and appearing on news media outlets don’t really know where this situation is going.  Your opinion an my opinion is just as valid.

‘It takes just “one extra snowflake to start an avalanche — and boom!” Indeed, according to Harry S. Dent Jr., aka The Contrarian’s Contrarian, flurries could come in July: The ever-building market bubble is likely to “blow at the end of this month, if not September,” predicts Dent in an interview with ThinkAdvisor.’

The Conference Board opinion: Looking further ahead, we forecast that the US economy will grow by 3.8 percent (year-over-year) in 2022 and 3.0 percent (year-over-year) in 2023.

My opinion: The sky is not falling. Despite politics we will muddle through despite our lack of a strong leader.  Ignore the noise.