Let’s get straight to it. Inflation is being DRIVEN by the upper class who have the money to pay higher prices. To be more specific, it’s mostly due to the purchasing power of the top 1%. Yes, I am blaming the rich, but it’s not really their fault that they are doing better than most people. I’d do the same thing if I knew how. The rich are pushing prices up because the world economy has changed. Due to globalization and the rise of the investor class, and the wide variation between skills in the working class and upper 1/3 of the population, our economy has become dangerously unbalanced.

In the past, the middle and some of the working class* could afford housing, groceries, transportation, and a little leftover for leisure and emergencies. Plus, the majority of workers had the financial security of employer-provided benefits for health insurance and retirement funds. These benefits are the same as being paid money, but large employers could purchase them cheaper than individuals. Many things have changed over the past 50 years between employers and workers. Now many workers get no benefits at all and not even full-time hours. Small businesses struggle to compete with the ability of multinationals to compensate their employers better. Competition for workers is pushing small businesses out of the marketplace and sending those former business owners back into the job market as workers.

But the real issue today is that the over 50 demographic who have worked for companies that paid well and had retirement funds and benefits are in a much different financial position than the lower 2/3 of the population.

The rich can afford to pay more. This ability to pay has naturally caused businesses to raise their prices to keep their profits high enough to stay competitive in their various industries. This works fine for the people in those groups, but not so good for the rest of us.

2/3 of the American population has no money in savings. Inflation is ‘high’ for those of us who have little ‘cushion’. And this inflation is on necessities.

Buying things on credit is no longer affordable. Houses and cars and appliances that the working classes used to buy on credit are now so expensive that the payments are too high. For example, buying a house requires a large enough down payment that will keep your monthly payment within your budget or you won’t be able to get a loan. Due to this, many people are spending as much as half of their income on rent. There is also increased demand for rentals from those who can afford a higher rent which raises the overall rents.

In conclusion, inflation is caused by strong demand from the upper income class which raises the prices of everything for the rest of us. The upper 1/3 doesn’t rely as much, or at all, on wages. They have multiple income streams. Workers usually only get money from their labor and most do not know how to invest it to make it grow. This is called wealth inequality. This difference between the financial conditions of the classes is called a two-tier economy and is common in developing countries. America is regressing.

This kind of inflation is not an easy problem to solve, however, which is why the Fed’s actions are not helping. The actual problem is that there are not enough opportunities to make enough money to afford prices at the level of the upper 1/3.

America’s job market is becoming divided into mostly service workers and low level technical workers and investors, government employees, and professionals in the upper 1/3. Thanks to technology, there will be a reduced need for all of these jobs, except for government employee jobs which never decrease.

This means that only those who know how to acquire and use money to make money, such as by investing and starting businesses, and by buying and selling assets such as real estate , and by providing credit services and loaning money at interest to the lower classes, will be able to thrive in this two-tier economy.

Educate yourself, get marketable skills and financial skills, because inflation and income/wealth inequality is not going to magically improve, no matter what the government tells you. Their plan is to take from the rich and give to the poor, the lower 2/3 of the country, via welfare programs such as a Universal Basic Income. While this might sound good to some on the surface, UBI will create new problems. And UBI does not solve the actual problems of inflation and a two-tier economy. UBI will be the nail in the coffin for the American Dream of doing better financially than your parents.

So, what did you learn was the SECRET cause of inflation in 2023? The upper 1/3 of the population, especially the upper 1% which make TEN times the national average income, are keeping prices high because they can afford to pay more for things than the rest of us. Remember that when considering differences in ability to afford the cost of living, income and wealth make a difference, not just income, because having wealth(assets) allows you to handle economic ups and downs much better.

Note about the middle class and the working class today:

The middle class and the working class make up most of the population. In the past they had different financial situations. However, the lines between these two classes have become increasingly blurred in recent years.

Traditionally, the middle class was defined as those who have a comfortable standard of living, but do not have a lot of wealth. They typically have jobs that require some level of education or skill, and they earn enough money to support a family and live in a comfortable home.

The working class, on the other hand, was defined as those who work in manual labor jobs or low-paying service jobs. They typically have less education and skill than the middle class, and they earn lower wages.

However, the lines between these two classes have become increasingly blurred in recent years. This is due to a number of factors, including:

• The decline of manufacturing jobs: Manufacturing jobs were traditionally a major source of middle-class jobs. However, manufacturing jobs have been declining in recent years, and this has led to a decline in the middle class.
• The rise of the service economy: The service economy has been growing in recent years, and this has led to an increase in low-paying service jobs. These jobs are often filled by working-class workers.
• The rising cost of living: The cost of living has been rising in recent years, and this has made it more difficult for middle-class families to maintain their standard of living. This has led some middle-class families to fall into the working class.

As a result of these factors, the middle class has been shrinking in recent years, and the working class has been growing. It is now becoming increasingly difficult to distinguish between the two classes. _Google Bard