Americans Are Officially Out Of Money To Spend — We Had To React
Tom Bilyeu and economist Jeff Snider break down recent inflation data and argue that falling prices reflect consumers running out of money, not a healthy economy.
The gist
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Snider distinguishes good deflation, where innovation lowers prices, from bad deflation, where people simply cannot afford to spend anymore.
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Prices spiked during COVID lockdowns and never came back down, so real wages never recovered and savings are now largely gone.
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TIPS break-even rates have dropped sharply, meaning professional investors expect very little inflation despite what officials are saying publicly.
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When businesses cannot raise prices on stretched customers, they cut hours and jobs instead, which then spreads the slowdown further.
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