{"id":38,"date":"2021-11-30T11:23:42","date_gmt":"2021-11-30T11:23:42","guid":{"rendered":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/?p=38"},"modified":"2025-05-16T12:42:33","modified_gmt":"2025-05-16T12:42:33","slug":"inflation-is-possibly-turning-us-into-the-next-venezuela","status":"publish","type":"post","link":"https:\/\/www.rubinwealthadvisors.com\/rubinreport\/inflation-is-possibly-turning-us-into-the-next-venezuela\/","title":{"rendered":"Is Inflation turning us into the next Venezuela?"},"content":{"rendered":"\t\t
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Is Inflation turning us into the next Venezuela?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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A week ago, I was in a local sandwich shop and check cashing store (a traditional goods & service combination) owned by a friend, a hardworking entrepreneur.\u00a0 He seemed very stressed out and I asked him why.\u00a0 He said that he had just had to raise the price of his sandwiches from approximately $9 to just over $12 and he still wasn\u2019t sure if he was making any money this week.\u00a0\u00a0 I asked, \u201cthis week?\u201d\u00a0 He replied yes and then explained.<\/p>

He said that in the past week the price of turkey had doubled.\u00a0 The prices of other sandwich fixings had gone up by anywhere from 20-50 percent over the same time frame.\u00a0 What\u2019s more, he said that he could not count on supply because it was getting so hard to get fresh produce. \u00a0Day to day, he didn\u2019t know what he would have on hand.\u00a0 Selling 300 sandwiches a day, this entrepreneur doesn\u2019t know if he is losing money on every order and trying to make it up on volume.<\/p><\/div><\/section>

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Increasing Food Prices<\/a><\/strong><\/h3><\/div><\/section>
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Continuing my journey, I then went to the pool supply store where I talked to my pal Joe whom I have known for years.\u00a0 Joe offers up on his own that the price of chlorine has increased 25 cents in its normal unit of measure.\u00a0 He said that he has been buying chlorine from the same company for years and the typical price movement is about a penny per year in that same unit of measure.<\/p><\/div><\/section>

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Increase Chlorine costs closing public pools<\/a><\/strong><\/h3><\/div><\/section>
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Have I suddenly found myself in Venezuela?<\/p>

Everywhere I go I hear the same message from merchants.\u00a0 These two representative anecdotal stories of mine can be multiplied by tens of millions from other Americans of all socio-economic strata across the country, each of whom is experiencing the early, but rapidly progressing stages of inflation.<\/p>

The government has been lying to you about this.\u00a0 They are lying to you about the level of inflation, and they are lying to you about what is causing it. It all comes down to basic economics.<\/p>

The Nobel Prize-winning economist Milton Friedman was famous for saying, \u201cInflation is always and\u00a0everywhere\u00a0a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.\u201d\u00a0 To translate, he\u2019s saying, printing too much money leads to inflation.<\/p>

Friedman\u2019s statement should almost be considered axiomatic rather than a theory in that the only way that prices can rise across the board in a country is if there is too much money chasing too few goods.\u00a0 As the champion of monetarist theory, Friedman would point to the simple equation:<\/p><\/div><\/section>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 MV=PQ<\/strong><\/h2>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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