I don’t have proof (I should have posted something a year ago) but I definitely called that “inflation” would be much higher after government decisions such as CERB and forcing businesses to shut down. I mean inflation to include money printing which I know is being done in the United States. Without getting TOO anti-political, this is frighteningly close to a welfare state.
What my focus on here is that taxpayers are now funding freeloaders (CERB, i.e. welfare) but that means that there are less available tax dollars because less people have taxable income (or the income is coming from tax dollars I suppose). So, we have a smaller pool of dollars, so governments just print more money since debt/deficit doesn’t really matter to them anyways.
I have read/heard that in the US money printing was over 20%, and that would not be factored into the CPI “basket of goods” that typically inflation is measured against. What I am saying here is that inflation as defined by a government could easily be manipulated to include a basket of goods that did not increase significantly in price. Even after admitting that inflation is higher that expected (even there is a limitation of how far this could be manipulated), I believe the reality of our time valued money is even devalued moreso.
A note on stock markets, This phenomenon which is creeping towards hyperinflation, I believe has a particularly backwards effect on the stock markets. The markets have risen double digits this year, but not quite enough to offset how much money has been printed. This gives unaware investors a false sense of gains, as the hurdle rate against the time value of their dollar suddenly got much higher. In the past, if the money printing rate was at 7% and other inflationary impact was around 3%, we could say “true” inflation was around 10% and we see index funds returning maybe 10-12% so you are growing your worth. This would now require your returns to be much higher, closer to 25-30% to have similar growth.
The bottom line here is that this is not sustainable, and there are many people unaware of the math behind this. They see 5-15% and think they are expert investors, beating the banks and maybe even the indexes, but in reality would need to see returns above the sum of the money printing rate plus other inflationary factors.
The only recourse I see, is to exploit low interest rates offered by banks to take on debt to fund more lucrative endeavors. Salary/wages will likely not be commensurate with the true devaluation of our dollars. You have been warned.