Are “Greedflation” and “Price Gouging” to Blame for Rising Prices?

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. Are “Greedflation” and “Price Gouging” to Blame for Rising Prices? By Nomi Prins, Editor, Inside Wall Street with Nomi Prins “Greedflation.” The term has recently caught on to explain the out-of-control prices U.S. consumers are facing. We all know that inflation has rocketed this year. We’re paying, on average, 8.5% more for our purchases this year than we paid a year ago. This has taken a harsh toll on all our budgets. And America’s middle class, the economic backbone of this nation, is cracking under pressure. As many as 75% of middle-class households recently reported that their income is lower than the cost of living. It’s gotten to a point where some 20 million homes across the country – about 1 in 6 American homes – are [falling behind on their utility bills](. Now, trade disruptions and increased costs along the supply chain are significant factors in rising prices. But the greedflation argument maintains corporate greed and price-gouging are also to blame. See, while regular people struggle to make ends meet, many large corporations have been raking in record earnings. So today, I’ll explore this argument in greater detail. I’ll also show you some ways you can level the playing field. Recommended Link Market Wizard who predicted all indexes would be negative in 2022 shares shocking new forecast: [“Prepare for Five Years of Famine”]( [image]( [Click here for the name of the one ticker you need to protect yourself.]( -- Greedflation or Not? Let’s start with a quick recap… As I’ve previously explained in these pages, the original – and correct – meaning of inflation is [an increase in the supply of money](. In other words, it is, in fact, an increase in the money supply that causes prices to increase. That’s because there’s more money chasing the same number of goods. The Fed’s broadest measure of the money supply, called M2, rose by an astonishing $3.8 trillion in 2020. That was a one-year increase of nearly 25%. That was followed by a further $2.3 trillion in 2021. Fast forward to 2022, and the inflation chickens have come home to roost… aided by global supply chain disruptions and sky-high energy prices. [Featured: The diversification method is crushing people.]( Now, there are always people (and businesses) out there who will use the excuse of inflation to hike prices. That’s just the reality. It’s commonly called “price-gouging.” One example is credit card companies. Earlier this year, Mastercard upped its transaction fees. That happened even though its net revenue for the first quarter was 24% higher than for the same quarter in 2021. But its costs haven’t been badly impacted by supply chain issues or inflation. In fact, its operating margin was nearly 60% and its net income was up more than 44%. And its own Mastercard SpendingPulse report published in May showed total retail sales up 7.2% on the previous year. In-store sales were up 10.2%. And online sales were up 92% on pre-pandemic levels. Perhaps unsurprisingly – we’ve recently seen the whole “greedflation” argument become the point of political contention. On the one side, you have Republicans pinning the blame on the Biden administration. On the other, Democrats are complaining about price-gouging corporations. Whichever side of the argument you come down on, there’s one glaringly obvious factor that continues to give it life – astronomical CEO pay. Recommended Link [Former Goldman Sachs Exec Who Predicted 2008 & 2020 Says This is NEXT…]( [image]( Life in America is not as it seems… And thanks to recent unprecedented decisions by a strange force of unelected officials… Americans may now experience a level of financial insecurity and suffocation of freedoms bigger than the crisis of 2000…2008… and 2020 - COMBINED. Months from now we may look back to – this moment – as the end of the middle class. Stephen Roach, a former chairman at Morgan Stanley, says: [“U.S. living standards are about to be squeezed as never before.”]( Newsweek says: [“[This] Will Be The End of American Freedom.”]( And HuffPost says: [“[This] Is Making The Rich Richer, and Leaving You Behind.”]( But a new “boots on the ground” investigation reveals Americans will be forced to make a drastic decision… Become one of the ‘new poor’ in America… Or the ‘new rich’. While everyone else could end up in “Permanent Recession.” [Click Here To Get The Details.]( -- The Pay Gap Is Widening Earlier this year, I showed you [how much CEOs make compared to the average American worker](. They’re earning 351 times more per year. Put another way, you’d have to work almost every day in the year to earn what a CEO earns in one day. Take another look at this chart I showed you back then. You can even see a sharp uptick in their total compensation in 2020, when millions of Americans lost their jobs… and worse. [Chart] From 1980 to 2020, the total amount CEOs are paid grew by 1,322% (adjusted for inflation) … The average American worker’s pay went up just 17.5%. But it’s been getting worse… According to a recent study, CEO pay at the 500 largest U.S. companies by revenue increased by 18.9% in 2021. Meanwhile, workers’ real wages fell 2.4%. So why do bosses’ keep earning more while their workers struggle? [Featured: My exclusive trading method could make all your financial worries go away - Jeff Clark]( Why Is This Happening? I alluded to the reason earlier… and it’s a simple one, really. Corporate profits are at an all-time high. Have a look at this next chart… [Chart] In 2021, corporate profits after tax rose to $1,666 billion. That’s a 60% increase from $1,038 billion in 2020. And CEOs are being rewarded generously. For example, Michael Miebach was appointed CEO of Mastercard in January 2021. He got a total compensation package of $16.1 million in his first year in the job. And Amazon’s new CEO Andy Jassy received $212.7 million in total compensation last year. That’s 6,474 times the $32,855 median pay the retail giant’s regular employees get. Don’t forget, [as I wrote about last week]( Amazon already hiked its fulfillment fees a couple of times this year. It’s just one of many examples of a company expecting its retailers and customers to shoulder its rising costs, while richly rewarding its CEO for just doing his job. Recommended Link [The 3-Stock Retirement Blueprint]( [image]( When most folks think about making money through the markets, they think “buy and hold.” They think “diversification.” And they think about investing in things like index funds. But one man has a different approach… It’s called the “3-Stock Retirement Blueprint.” It’s a way to play 3 stocks — yes, just 3 — and potentially make more money than you would by trading all the rest of them… Or by using an old-fashioned approach. Sound impossible? [Get all the details here]( — including the names and tickers of the three stocks. [Click here now.]( -- What You Can Do The pay gap I described above is a factor of The Great Distortion I’ve been telling you about now for a while. The rich have been getting richer, while the average American has paid the price. But, as with many things in life, there are things you can do to try and level the playing field… Because if you know where to look, you can use the distortion to your advantage. For example, like I told you in a [recent essay]( if you stay invested in the stock market for 20 years or more, you won’t walk away empty handed. One way to do that is with the Vanguard S&P 500 ETF (VOO). This exchange-traded fund (ETF) allows investors to gain exposure to the price movement of the 500 companies in the S&P 500 index. It’s a straightforward investment you can access in your regular brokerage account. The fund doesn’t try to outperform the index. Instead, it aims to replicate its performance as closely as possible. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins P.S. America has become a land of extremes, where the winners take all and everyone else settles for the scraps. Experts estimate we could see 263 million people fall into poverty in the coming months. In a presentation I recorded earlier this year, I reveal the strange force that’s strangling the middle class. And how you can get on the right side of the widening gap in American society. [Just click here to watch it](. MAILBAG Have you been impacted by increased transaction fees by credit card companies? Are there other examples of price gouging that you’ve experienced? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Are “Greedflation” and “Price Gouging” to Blame for Rising Prices?). --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG Have you been impacted by increased transaction fees by credit card companies? Are there other examples of price gouging that you’ve experienced? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Are “Greedflation” and “Price Gouging” to Blame for Rising Prices?). IN CASE YOU MISSED IT… [The First Gas Station in America… To No Longer Offer Gas]( Discover what’s happening, live on-the-scene… And why soon, this development will be spreading to your hometown. [Click here now!]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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