What does inflation really mean?

"There is another way to think about inflation–an insufficiency of supply. Two major events have reduced supply relative to demand. The Biden regime’s Covid lockdowns stopped much production, destroyed supply chains, and resulted in the permanent closing of many businesses. On top of this supply reduction, the Biden regime’s sanctions against Russia and the world further reduced supply by prohibiting existing business relationships. Thus, supply has had two major reductions. Moreover, higher interest rates themselves raise costs, thus further restricting supply.

Additionally, for the past 25 or 30 years US manufacturers seeking lower labor and regulatory compliance costs moved their production for the US economy offshore to Asia, principally China. The current combination of Washington’s trade war with China and the ongoing Chinese Covid lockdowns have disrupted the flow of goods to US markets. To move production for your own consumers to another country is an insane policy. But Washington is prone to insane policies, and we are now paying the consequences.

So, what will be the principal effect of the Fed’s interest rate rise? The principle effect will be to price some home purchasers out of the mortgage market. This will enable the private capital companies to acquire homes for rental income. The result is to reduce US home ownership, to increase rental income to the rich, and to deprive citizens of the main source of middle class wealth accumulation–the rise in housing values. In other words, the Fed’s policy is just another attack on the middle class, further reducing its numbers and thus consolidating more power in the hands of the rich."

https://www.paulcraigroberts.o....rg/2022/06/21/two-ex