Jan 5, 2022
Summary:
As we roll into the new year, we’re curious to see the economic
results from 2021. Here to talk about how these may look as well as
some predictions for 2022 is Michael Busler, a professor of finance
at Stockton University. We’ll probably see an economic growth of
about 5.5% with the unemployment rate down 4%. The downside,
however, will be inflation, since prices went up about 7.5% in
2021. The Fed thinks that inflation is largely influenced by supply
chain disruptions, but Busler talks about 4 other major factors
that contribute immensely. You won’t want to miss these key points,
so tune in for more.
Highlights:
-Busler is a professor of finance over at Stockton University in
New Jersey
-The final numbers will likely show the economic growth of 5.5%,
which is good, and the unemployment rate will be down around 4%. On
the bad side is the inflation rate, which is likely to show that
prices went up about 7.5% in 2021, which is the worst inflation
we’ve had since 1980
-We’ll probably see about 4.5% growth this year. Unemployment will
probably stay pretty constant. The major problem at hand is
definitely inflation, and we’ll probably be looking at 8%
-The Fed thinks inflation will go away on its own around the middle
of this year because they claim inflation is caused by supply chain
disruptions. Busler believes that the supply chain isn’t
significantly contributing to inflation
-Last July, the economy was operating the same as it was before the
pandemic
The real causes of inflation:
-The Biden administration has declared war on fossil fuels; there
are higher energy prices
-A large portion of the population is not returning to the
workforce; 3.6 million have left and are not returning. To bring
people back to work, we’ve had to raise wages significantly
-The federal government has been $6 trillion more than they’ve
brought in in tax revenue in the last two years
-The federal reserve is allowing all of this to happen. In the
past, they have shrunk the money supply and brought interest rates
up.
-The true measure of inflation, according to Busler, is the
consumer price index
-It’s important to analyze price increases in the goods and
services we normally buy
-Once we’re in a wage price spiral, we run into serious
problems
-The federal reserve needs to realize that inflation is a a major
issue that needs to be resolved
-Rather, the Biden administration is dedicated to resolving real or
perceived social injustices
-Normally, the stock market and housing go up in value more than
the inflation rate. The stock market will probably do well for most
of this year.
Useful Links:
Financial Survival Network
It’s Inflation, Stupid with Michael
Busler
Taxing the Rich to Death with Prof.
Michael Busler