Double Digit CPI?

The long-term theme we have been describing earnestly in the past few months is that workers will get a larger portion of the pie than corporations. It’s nice to look at this objectively instead of rooting for a specific side because our/your rooting interests have no impact on what happens anyway. It appears the political tailwinds are towards granting workers more rights and higher pay. The centralized control the mega-corporations have will be challenged. Many observers actually believe the largest corporations have more power than the US government. That won’t be the case after this cycle ends.

As you can see from the chart above, 62% of Americans support raising the federal minimum wage to $15 per hour. We don’t have the state-by-state breakdown, but fewer people in states with lower costs of living probably supported this increase. 27% of people who oppose raising it to $15 think it should stay at $7.25. That equates to about 10% of Americans. Essentially, 90% of Americans think the minimum wage should be higher than it is now. That is powerful support for the long-term thesis we described above.

Inflation Is Here

It’s incredible to see the large rapid spikes in commodity prices in the past few months while seeing CPI stay below 2%. Easier comps will eventually get it to 3% this summer, but that doesn’t seem like enough. As you can see from the chart below, the Bloomberg commodity index is at a 2 year high. It won’t peak at the range it was in, in the few years before the pandemic. Copper closed at a 9 year high on Monday. It’s up 92% from last year.

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Disclaimer: The content in this article is for general informational and entertainment purposes only and should not be construed as financial advice. You agree that any decision you make will be ...

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