THE DEEPER DIVE: Old McDonald Has a Farm Plan to Save you from Scorching Food Inflation
The Donald also has swamp land to sell to farmers in order to help them avoid drought as well as bridges to sell to make it easier for them to get their produce to markets.
Just as tariff-caused inflation began to show up, we entered this war with Iran. The two causes of inflation will now be inextricably mixed, so it likely will not be possible to say how much of the coming inflation is due to the tariffs finally being passed through, as major businesses reported they would start doing early this year.
Last month we saw a notable uptick in reported inflation, and I noted that was certainly all due to the tariffs because the war began on the last day of the month (February) that was being reported. At the same time the Supreme Court terminated most of President Trump’s unconstitutional tariffs and paybacks to business hit by the tariffs are already being implemented, albeit with Trump threatening businesses in his typical mafia style by saying he “will remember” who seeks paybacks as well as those who do not (implying favoritism to the companies that leave the paybacks alone).
So, by court mandate, the tariff inflation is set to start fizzling just as it was starting to pass through, and that may cause businesses not to start passing their tariff costs along this year after all, especially if they are collecting the tariff payback so they don't need to. Still, Trump immediately imposed another temporary tariff of 10-15%, which is not nearly as hot as the tariffs the court cancelled, but it will still add some inflationary pressure.
Therefore, I won’t likely spend time trying to sort out how much inflation is due to tariffs, and will presume a major portion of price increases we start seeing at the consumer level will be due to the war on oil.
The absolutely certain major hits from the war are going to be soaring fuel prices, transportation costs AND FOOD INFLATION due to soaring farm costs and food scarcity that is already becoming facts on the ground (or in the ground)! The path to scarcity is already laid in and cannot be fully averted by government rescue plans, even IF such plans happen, as I’ll explain below.
