Dear Fellow Expat:
Good news, everyone: We've finally solved the source of inflation. All that monetary destruction eroding your wealth.
Got it dead to rights.
Turns out, it wasn't governments taking on trillions in new debt. It wasn't all the money printing.
It wasn't the lack of supply-side solutions to increase production and capacity.
Funnily enough, it had nothing to do with economics.
European Central Bank president Christine Lagarde dramatically revealed the cause of all this inflation: Climate change.
As your attorney, I advise you to pour yourself a glass of wine.
No, It's Not Climate Change
Over the last week, I've conducted an unofficial survey.
In 2019, the National Highway Traffic Safety Administration (NHTSA) had an interesting data point about car accidents.
It found that 52% of car accidents happen within five miles of someone's home. And 69% of accidents happen within 10 miles.
I've asked 40 people to explain why this is happening. They guessed that it was due to several variables.
They suggested that people get overconfident or drop their guard, or they get to comfortable because they "know the roads."
My respondents suggested it might be linked to people driving drunk between their homes and nearby bars and restaurants.
Some opined that most places are residential, where speed limits are 25 miles per hour - "they're likely speeding."
They suggested that people work late and get tired driving home.
My respondents were certainly creative, but no one really got to the core issue.
No one considered the very basic point within the data.
Even the NHTSA failed to consider the obvious in its analysis.
Consider this basic statistic.
Within five miles of a person's home is where they drive the most often.
Short trips, round trips, whatever.
People don't drive a ton outside of that 10-mile radius.
It's just the nature of driving. You drive the most on those roads, therefore, you are, statistically, most likely going to get into an accident there.
I'm telling you this... because the same goes for inflation.
The obvious answer, the simplest answer - Occam's Razor - is the freaking answer.
When it comes to inflation, we have central bankers suggesting that climate change costs are driving up inflation.
But the central banks and the governments are the ones responsible for expanding nations' debts and pumping trillions of cash into the system.
You can't just increase the U.S. money supply by 35% and then expect prices to remain constant.
We printed too much money.
That's it. Hard stop.
Don't waste time digging through any of the other reasons for inflation.
To suggest otherwise if to be completely unserious about understanding the fundamental drivers behind inflation.
To your wealth,
Garrett Baldwin
Florida Republic Capital (Available on Substack)
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.