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Don't call it inflation...

Don't call it inflation...

Wednesday, 5/12 - 66º/46º, 10% chance of rain; Inflation, action movies, property taxes, housing boom, etc.

In its most elemental form, inflation is too much money chasing too few goods. Everyone focuses on the "too much money" part of the equation—and we all know by now that the Fed has increased the money supply to record levels—but, no one discusses how we get "too few goods." That often comes from government regulations which restrict the supply of goods and services available. Whether it's from too much money, too few goods, or both, inflation is taking hold in the U.S.

There are many historical precedents to study inflation if one is so inclined:
    🏛 54 AD Nero famously debased the silver dinari to fund a series of ambitious public works projects in Ancient Rome [1].
    🏗 1873 AD Following the Civil War, the US got a taste of inflation when it adopted the Greenback to aid in funding Reconstruction of the South [2].
    🇩🇪 1921 AD Weimar Republic in Germany, saddled with war reparations from WWI, printed money to pay their bills and experienced wild inflation [3].
    📉 1971 AD And most recently in the US, Nixon's failed efforts to restore confidence in the inflating dollar during the 70s [4].

In the wake of the Colonial Pipeline cyberattack, talk of inflation has returned. The Biden administration having to rescue an industry it despises underscores the future impact of an aggressive shift to "green" energy [5]. The cyberattack forces them to admit the reality that the country cannot run without gasoline.

The looming supply shock set alongside a weak April jobs report and Biden's soft admonition of citizens forgoing work for stimulus checks seems to be the perfect setup for an inflationary punch line [6]. In this instance, government policy decisions exacerbated force majeures that lead to gasoline, labor, lumber, and microchip shortages [7].

Rampant speculation—another ingredient for inflation—has manifested in ironic crypto assets like Dogecoin and short squeezes of limping companies like $GME. History could offer no greater avatar of the times than Elon Musk. Just the mention of his name invokes the specter of one hundred financial—and, possibly, cultural—bubbles. Even Musk's business ideas have a whiff of inflation about them. A penal colony on Mars? A glorified hallway to avoid traffic [8]? A brain implant that downloads a calculator into your amygdala?

Meanwhile, Bezos and Musk swap places atop the wealth leader board like juiced up thoroughbreds at the Kentucky Derby, the luxury yacht industry booms, and anecdotal chatter tells of dentists passing out veneers as effortlessly as Jesus feeding the multitude.

Throw all this in the shaker with Biden's hydrocarbon jihad and the American Rescue Plan and you've got a strong inflation cocktail. It all seems so obvious. But, as Jay Powell insists, "Inflation may be here, but it is transient."

There is, of course, another side to this argument. Outlets like the Washington Post insist that the labor shortage has nothing to do with the stimulus checks and, instead, spread the gospel that the American people are "reassessing" their relationship to work [9]. Supply shocks, such as the lumber shortage, can be attributed to slacking sawmill activity which can be tied back to the labor shortage which can then be attributed to the global pandemic, which is to say, a transitory shortage. It's worth noting that a virus, by its nature, does not cause supply shortages, but government bent on asserting its power can. That's just science.

And speculation? Have you heard of Elon Musk? He's making civilization multi-planetary. How can you be against that? We're going to Mars. Shit, Dogecoin is going to the moon [10].

By most accounts, government has set the table for inflationary conditions to arise. According to Friedrich Hayek, inflation is "engineered by governments for the gain of governments." At least we'll know who to blame if the hammer drops.

Fresh Reads

Jerod Hollyfield talks about the history of the action movie and how—despite the all consuming popularity of the superhero genre—it still speaks to Americans.

The Last Action Heroes
‘Nobody’ and ‘Fatman’ Face the Twilight of the Genre Star

Nashville News

💰 Davidson County Election Commission agrees to hold a referendum election on the property tax hike imposed by Mayor Cooper at the beginning of the pandemic. The vote is scheduled for July 27th (Tennessean, Lookout). "More taxes are good, actually," many citizens pray in penance (WPLN). The referendum also includes proposals for:
  + Capping all future property tax increases to 3% without voter approval
  + Eliminate lifetime or other benefits for elected officials
  + Lowering the amount of signatures needed to trigger a recall election
  + Making it more difficult to give away metro property
  + Returning sports venues to public if no games played for 24 months

🏠 Nashville home sales in April 2021 up 43% from April 2020 (Biz Journal)
  + Locals feeling pinched (Biz Journal)
  + ⬆️ Median home price up 16% ($330,000 to $385,000)
  + ⬇️ Home inventory down 54% (9,976 to 4,534)
  + 📈 With a large influx of jobs and transplants, market expected to remain strong for foreseeable future

🏙 Nashville Development news:
  + Ritz-Carlton slated for SoBro (Post)
  + Major project eyed for ex-Tennessean site on Broadway (Post)
  + Gulch building slated for organic food and beverage concept (Post)
  + Warehouse in The Nations eyed for major update (Post)
  + Large-scale residential project slated for Antioch area (Post)

⛽️ Gasoline shortages likely to plague Nashville following Colonial Pipeline cyberattack (Tennessean)

👨‍💻 Tech jobs are pouring in to Nashville. How many will go to local workers? (Tennessean)
  + Nashville ranks behind only San Francisco and Silicon Valley in tech jobs growth for U.S. metropolitan areas since 2010

🏟 Nashville SC, Nashville Sounds, the Opry and more to lift capacity restrictions May 14th in conjunction with Metro's easement (Channel 5

🥤 Iconic Elliston Place Soda Shop reopened yesterday (Channel 4)

👨‍🎤 Metro agencies, nonprofit groups partner to assess live music industry (Lookout)

📰 Franklin resident and Conservative commentator, David French, joins The Dispatch (Brentwood Home Page)
  + Fact-based reporting and commentary informed by conservative principles (The Dispatch)

Nashville Events

Indulge your inner medieval knight at the Renaissance Festival this weekend.

Events for week of May 10th, 2021
Your week in events featuring the Tennessee Renaissance Festival, Soundsbaseball, Strawberries, much laughter, song, & more! Events🏰 The Tennessee Renaissance Festival continues Saturday and Sunday, Info[] ⚾️ The Sounds play the Memphis Redbirds all week. Catch America’…


[1]: 200 years later, the currency was nearly valueless after successive emperors continued the practice.
[2]: Additionally strained by the Franco-Prussian War (1870–1871), and major property losses in the Great Chicago Fire (1871) and the Great Boston Fire (1872)
[3]: The abandonment of the gold standard as WWI began left the German currency vulnerable following the war.
[4]: Notably, his 1971 Executive Order forgoing the Bretton Woods Agreement and enforcing wage and price controls (most crucially on oil) that culminated in double-digit inflation, high unemployment, and a steady dissolution of the public's trust in the competency of government.
[5]: One of Biden's first moves as President was to nix the Keystone XL Pipeline.
[6]: Employers number one competitor is stimulus money from the government. With Biden's tax credit, the wage replacement ratio is close to 100% for those making less than $25 pre-pandemic.
[7]: Even flowers and camping gear are getting crunched.
[8]: That doesn't work.
[9]: File this alongside reassessments of gender in the "safe to discard" bin of ideas.
[10]: Really.