Why should I care about inflation?

Runaway inflation on our consumer goods and services can cause consumers to panic-buy large purchases and stockpile food.  When prices seem like they are going higher and higher consumers believe that they would be better off making large purchases now rather than wait for later when they really need it.  This pushes demand for goods higher, which in turn raises prices as supply for these goods diminishes. In reaction to higher prices and the overall cost of living, people demand higher wages.  It is a reactionary and cyclical phenomenon, which eventually devalues our dollar versus the rest of the world, and weakens our economy.

Hot Take

I think the inflationary pressure that we are hearing in the media is a lot of noise.  The real issues are supply chain (particularly Covid-related shutdowns in China) and the war in Ukraine.  When the supply chain resolves itself, and we have had a full-cycle of increased inflation, it will come back to normal levels.  Inflation is measured year-over-year.  

We are already seeing a decrease in gas prices at the pump, as the threat of a recession becomes more real, people are travelling less and business are not spending as much. 

Prices for wheat and soy beans have dropped to their pre-Ukrainian war level, which means that the war is no longer effecting our food prices as severely.