Sunday, November 14, 2021

My Inflated Ego

If you are reading on a smartphone, use landscape / hold phone sideways. 

What do you call someone who has an inflated ego? Don't you dare say Tom Capone...

Someone who is egotistical is full of themselves, completely self-absorbed. The prefix ego refers to a person's sense of self, or self-importance. To be egotistical is to have an inflated view of self-importance - basically to think you are better than everyone else. 

None of this sounds good. None of this is attractive, or compelling, or a very good strategy for winning friends and influencing people. Unless, of course, you are running for President in 2016. But I digress. 

Inflation. Runaway inflation. Or, the big one - Hyperinflation - rapid, excessive, and out of control general price increases in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is rapidly rising inflation, typically measuring more than 50% per month. This also - does not sound good. Or, can inflation be a good thing, sometimes? 

I am NOT an economist. Not even close. But I have been in business since 1983. And, I got my drivers license in the 70's during the gas crisis. I am like that Insurance TV commercial: "I know a thing or two because I've seen a thing or two...."

Today, prices for everything from gasoline to groceries are surging as the economy roars back from the pandemic recession. And that is raising concerns about whether the USA is headed back to the awful economic days of the 1970's, when the country was gripped by double-digit inflation that required painful action by the Federal Reserve. 

I came of age in the 1970's and I remember what that terrible period was like. Today, I feel that the current run-up in prices is a temporary phenomenon, sparked by supply shocks tied to the pandemic, and pent-up demand from consumers - not the beginning of a persistent, upward spiral like the one that spawned "stagflation" in the 70's. 

We lived it. It was not that long ago. The BEST thing that anyone can do, is to do a little personal research on exactly what inflation is - and what it is not. By 1983, inflation had retreated back to just over 3%. 

But it was a painful correction, taking many years. Nearly 4 million people lost jobs in back-to-back recessions in the early 1980's. But for the last four decades, inflation has not been a serious problem in the U.S. 

The generation that were adults in that high-inflation period will always remember it. But there are a lot of Americans that never lived with inflation at all. So naturally, they don't expect it - and they certainly don't understand it. 

If you want to fill your brain with some easy to understand inflation stuff, click here

In 1970 the cost of a cup of coffee was $0.25. 1980, $0.45. 1990, $0.75. 2000, $1.00. $2010, $1.25.  $2020, $1.75. Now hot water is hot water, so - did coffee beans really change that much over time? Now - what is the cost of a cup of coffee when YOU make it in YOUR OWN KITCHEN, and fill a thermos to take the coffee WITH YOU to work? Or - do you work at home - so no need to buy coffee at all? See, you have more control than you think you do. 

Inflation is powered by choices - the choices that we (all) make. You, me, all of us - we have way more control over inflation that we think we do

How we buy, what we buy, and when we buy it - is what makes inflation - or even deflation! It's a dance, folks. Inflation occurs when the process of goods and services rise, while deflation occurs when those prices decrease. Moderate inflation is good because it increases national output, employment and income. Whereas deflation reduces national income and brings the economy backward to a state of depression. 

Inflation, like most things in life, has two sides to the same coin. Everything in moderation, right? Just like ego. A healthy ego, vs. a narcissistic ego. Since you got to have an ego, you might as well have a healthy one. 

"Everything in moderation, including moderation." ~ Oscar Wilde. 

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