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Since 2020, I’ve lost about thirty pounds. It wasn’t easy, but it was simple. And while exercise was important, I quickly learned that an entire pint of Jeni’s Gooey Butter Cake ice cream quickly cancels out all that exercise. While it tastes good on the lips, it turns into shame, regret and a much longer wait until you realize your dreams.
There’s a saying, “You can’t outwork a bad diet.” Put another way, “80% of your fitness transformation happens in the kitchen, not the gym.”
Well the analogy here is simple, but it won’t be easy. You see since 2020 we’ve printed almost $9 trillion. The dopamine hit of these gooey greenbacks made us all feel good in the moment. However, it’s now turning into economic shame, regret and a much-prolonged wait for the average American to achieve her financial dreams.
Think of the furious rate hikes from March of 2022 to June 16 of 2023 as a fat, carbohydrate addict sprinting down your street. After finishing a tub of Jeni’s ice cream, he laces up runs as fast as he can. Once home, he weighs himself and to his dismay he has gained 3 pounds.
The weight gain in our analogy is inflation. It just won’t go away. The goal is 2%. Core inflation has been stuck for six months at 7% range. Why? Because it can take months, even years for rate hikes (sprints) to lower inflation (weight loss).
You shouldn’t just blame the Federal Reserve. The politicians in Washington need the money to buy our dopamine. Every solution they come up with includes spending money that we must print into existence. Fun fact, the Federal Reserve will be taken over if they can’t get inflation under control. But who will take them over? Congress. Taking the American worker from the frying pan to the fire.
And the inflation is contagious, almost like a pandemic.
Bank of England hiked rates 50 basis points.
Turkey is trying to save the Lyra and went up 6.5%!
Australia and Canada surprise hikes
EU raised rates as it entered a technical recession with little fanfare.
In the 1970’s we had something similar, called stagflation. History doesn’t always repeat, but it rhymes. What we are experiencing now, let’s call it Fatflation. An economy weighed down with dollars with too few goods gets clogged arteries, eventually. If you'd like to learn what you can do about it, click here.
Related: Follow the Money; Beware the Traps