Appearing on Face the Nation (FtN) Goldman Sachs CEO Lloyd Blankfein discussed his views and perspectives on the economy overall and U.S. inflation specifically. Undoubtedly Blankfein has access to resources and analysis far beyond CTH scope; however, despite a statistically factual contracting GDP, Blankfein is claiming to see overall demand side inflation remaining in the macro economy.
Perhaps that view might still be true domestically on the service side (it certainly isn’t on the trade side), but demand driven inflation does not appear visible on the goods side of the economic ledger. What is clearly present as the price driver is “production side inflation,” the costs to create goods and bring them to market. If you look at economic activity in units instead of dollars, the units are contracting.
The demand for goods is now focused almost entirely on priority or essential purchases like housing, energy, fuel and food. The price for those essential products is driven by production costs, which are a direct outcome of the energy policy, environmental policy, regulatory policy, and to a lesser extent trade policy, of the Biden administration. Blankfein is pretending not to know things… WATCH:
Putting housing aside due to investment purchasing of real estate, if Blankfein was correct, and demand was still driving inflation, then a massive deflationary cycle would be coming as a result of lowered consumer purchasing of goods. There isn’t any chance we are going to see “deflation” in the next several years. [We will likely see housing prices collapse, but not consumer goods.]
Inflation is being driven by production costs, and there is no end in sight to the production cost increases as long as the crew behind Joe Biden keeps strangling the U.S. energy sector…. and then compounding the domestic price issue by creating incentives for energy exports (vis-a-vis EU sanctions). The production inflation is a purposefully inflicted wound on our economy. Production inflation is avoidable.
That interview is Wall Street gaslighting to a Main Street audience. I don’t like it one bit.
