Today, 01:16 PM
Have you ever heard of the analogy that inflation is like adding drops of dye into a bathtub of water? At first the drops make the water at the entry point really dark and then it slowly spreads to the rest of the bathtub. The entry point to the inflation we've been creating is the stock markets and housing markets. Now it's slowly spreading to the rest of the economy, finally everyday consumer prices.
Also I think there's something else about that analogy that doesn't get mentioned. The initial point where the dye is placed is very dark at first but then it gets lighter as the dye spreads. I think that's what's happening with inflation. It hits the stock and housing markets first and makes them go up but then as it spreads to the rest of the economy those markets actually come down. I think that's what we're seeing. The markets are coming DOWN as grocery prices are going UP. Further proof of this is a book I read about hyperinflation. The author lived thru 3 hyperinflations, 2 in argentina and 1 in chile. He said that not all prices rose. I know he said that home prices collapsed and I think he said stock prices did also.
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