Friedberg explains inflation moves through economy in stages, starting with commodities before becoming sticky in services.
“So the first thing we saw inflate was sort of hard commodities and soft commodities, things like energy and agricultural products and metals and so on.”
Friedberg reports thirty-year treasury yields crossed 5.2%, highest since 2007 financial crisis.
“If you take a look at the thirty year treasury yield, we just crossed 5.2% the in first twenty years.”
Friedberg warns that subsidized services could create a spiral requiring more free offerings to offset inflation for those who can't afford rising costs.
“create a spiral where you need to offer more stuff for free to come up with a way to cover the cost of the inflation for people that can't afford things anymore.”
Friedberg says housing, education, and healthcare inflated at 5-6% versus 2.5% average where government launched subsidy programs.
“And all three of these categories are categories where the federal government has launched programs to either subsidize or make available these categories of services to people through promises.”
Friedberg argues government student loan intervention caused 6x administrative cost increase and 8% annual tuition inflation.
“When the government intervenes in underwriting student loans and gives everyone a loan, administrative costs went up by six x and tuition skyrocketed 8% a year compounding for thirty years because the government said we'll underwrite any student loan.”