Wall St. For Main St., Released on 7/26/21

Last week Chipotle Mexican Grill announced a 2nd price hike on its menu in just the last few months bringing cheers (and stock upgrades from Wall Street stock analysts).

Chipotle warns it could raise prices even further to stave off labor issues and supply chain struggles https://www.businessinsider.com/chipo…

Taco Bell, McDonald’s, and Dunkin’ are raising prices. Here’s how much more you’re paying for coffee and food. https://www.businessinsider.com/dunki…

However, in this case what is good for shareholders is bad for the consumer.

One one hand, many people on Wall St are talking about how inflation will go down a lot soon due to base effects, while on the other hand companies that admit that inflation is much worse than the CPI for them raise prices and it is being cheered on by Wall Street investment banks and stock analysts.

What are base effects?

1) https://www.investopedia.com/terms/b/…

2) What are base effects and how do they distort inflation?: Yahoo U https://www.msn.com/en-us/money/marke…

Higher costs will now go into global supply chains from 3 main factors that are not priced in yet or Wall St is not accounting for yet:

1) Higher Oil prices up a lot in the last 12 months

2) Wage increases in certain industries (mostly forced by politicians, bureaucrats and unions) although there’s demand for labor in some industries driving wages higher too

3) Price hikes by companies that hurt consumers but help shareholders

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Jason Burack is an investor, entrepreneur, financial historian, Austrian School economist, and contrarian. Jason co-founded the startup financial education company Wall St for Main St, LLC, to try to help the people of Main Street by teaching them the knowledge, skills, research methods, and investing expertise of Wall Street. You can also find Jason’s work at his blog website at www.jasonburack.com.

  inflation, Jason Burack