Car prices new and used have been on a year. What’s going on?
Flashback March 11, 2021
Please recall Biden Signs $1.9 Trillion Covid Relief Bill.
This article was originally published by Mish Talk.
Key Points
Unprecedented Jump in Used Car Prices
New and Used Car Indexes Detail
Three Rounds of Fiscal Stimulus
The US federal government sent out three waves of stimulus payments since the start of the covid-19 pandemic in March 2020. Here’s a look back at Three Rounds of Stimulus.
Why Did the CPI Finally Jump?
Free Money
Those blaming money supply have the wrong narrative. It was FREE MONEY.
Note those three spikes on that top yellow line. The biggest one was courtesy of the Biden Administration.
Those were three rounds of free helicopter drop money.
The CPI took off after Biden did a massive shotgun blast of free money to nearly everyone.
CPI Index Levels
Helicopter Drop Impact
In previous posts, I stated two rounds of stimulus happened under President Biden. Technically that is true, but the authorization of the second round was by Trump.
The third round of stimulus, Biden’s American Rescue Plan, was tremendous overkill. The economy and jobs were already in a fast recovery. Yet, the overall $1.9 trillion package was the largest by far.
In addition, the Biden administration repeatedly extended eviction moratoriums putting massive amounts of free money into people’s hands. This also ignited inflation easily seen in the charts.
Have Used Car Prices Finally Peaked?
I got a phone call a few days ago from a nearby car Toyota dealer (TD) it went like this.
Seriously, that was the call. It shows how desperate dealers are for cars. But it also got me thinking: This has to be close to the top in used car prices.
Nancy Pelosi Hoot of the Day “Government Spending Reduces Debt”
Meanwhile, I am pleased to report this exciting news: “Government Spending Reduces Debt.”
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