Inflation is on the rise in the US

Amid the economic and health crsiis that was (and is) the COVID-19 pandemic, the federal government and Federal Reserve decided it was the right move to print trillions of dollars. This money was intended to be used for relief, for businesses to obtain grants or low interest loans to keep the doors open and in the form of stimulus checks directly to individuals. There were many supporters and critics about this level of money printing, but chief among them on the critical side was the threat of inflation. Well, flash forward to today with the economic recovery and strong employment that the US has, and inflation is here.

As of October 13, US inflation rates stood at 5.4%, a 13 year high. Housing, rent prices, and construction materials are still on the rise after slightly plateauing off, and energy costs (electricity and gas) have soared by 25% in the last year. But the most major of macro trends is occurring in consumer goods, which includes food and household goods. There was a huge downward supply shock in the middle of 2020 that led to both falling prices and decreased production. However, the economy and demand have recovered so quickly that there is now a supply shock as production can not keep up. The result is a price spike in most categories of goods.

No matter how one felt about the quantitative easing by the government at the height of the pandemic, no one would argue that high inflation is good for anyone, except for the nominal value of revenues and profits for businesses. Inflation hurts the value of the dollar for all, as savings accounts deteriorate in real value. A large percentage of households rely on only savings accounts or live paycheck to paycheck, so a high inflation disproportionately hurts these households. High inflation is not a good way to close the income inequality gap, in fact it does the opposite. Low levels of inflation can be healthy for an economy as it grows, but not levels like we are seeing now - this high inflation could threaten to cripple the US economy. 

The Fall of Afghanistan

It is mid-August here in the US, and the major news of the week has been the fall of the Afghanistan government to the hands of the Taliban, the major triggering event of which was the US deciding to withdraw the remaining troops in early August. After the US withdrawl, it took only 11 days for the Taliban to take control of the country by entering the government buildings in Kabul. First, they took over less populated and mountainous regions in the rural parts of the country, and then they set about taking over major population centers like Kandahar, before being able to set its eyes on the ultimate prize, the capital city of Kabul.

How the heck did this happen so quickly? Mostly and most directly, as most news source agree, it is because the American trained and supported Afghan army stopped getting paid. When the Americans left, they simply put down their weapons and walked away from the job; they were not going to stick around and fight the Taliban which was already powerful and accepted in most parts of the country. The Afghan soldiers had a choice to either join them or fight to the death against them. And to what end? There was none. Clearly, there was never a stable government that America and its allies actually set up. As it turns out, anyone in government power was actually just a puppet regime. The Taliban still remained in power in the country. 

The US intelligence community saw this as a potential option, just not so quickly. The US Embassy had to be evacuated (as apparently they didn't have the foresight to do that before withdrawing US troops) and hundreds of Western journalists were stranded there for days in a life threatening situation. It was a miscalculation of epic proportion, and it took days to rescue everyone safely (and luckily they were able to).

While shocking news when the whole situation unfolded, it is easy to see how the instability was a foregone conclusion. The region never wanted America or any Western nation to meddle in their affairs, and we were just wasting time and money occupying these lands.We should have gotten out a long time ago as we were clearly serving no purpose. Trillions of dollars of wasted taxpayer dollars and 20 years later, here we are.