Originally Posted by
Nantonaku
But would high inflation rates cause a depression either from normal economic forces or due to Fed over-reaction? That would effect Delta's earnings and push down the stock price. It seems like we are headed into unprecedented economic times. Never has inflation been this high with this much debt in the system. I don't see how this doesn't turn out bad for the whole economy. In my opinion the Fed starts easing again later this year, 8% inflation is something we are just going to have to live with. I read somewhere this week that government would be unable to pay 4% on its debt.
The high inflation is a result of COVID induced money printing plus government policies over the last few years that discouraged capital investment in legacy energy commodities. It'll likely be around 3 years for all this to shake itself out. Inflation growth will stabilize but we likely looking at high energy prices for a few years. Thank our lucky stars that we have a high paying job in the United States vs the lower class in many emerging markets where these high energy prices will drastically change their access to basic necessities(water/food/shelter).
As high income earners with ample disposable income, the personal impact of inflation can easily be hedged thru cashflowing Real Estate investing or Energy equities.
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