ARNOLD
People keep asking us how they should deal with this historically high inflation — what does it mean, what’s the cause and how will it impact their portfolios? We have to admit that we at the RJ Report have no idea, so we decided to ask Arnold.
RJR: Everybody seems to be worried about inflation. What is it and why is it called that?
Arnold: Well, that’s a good place to start. Most people think that inflation is when it costs more to buy things. But that’s not what the term really means. Inflation occurs when something “inflates”, and “inflates” usually means when something gets bigger by pumping hot air into it. So, tires inflate, and balloons inflate, and sometimes even egos inflate if enough hot air is tossed at it. But if cucumbers cost more, did they inflate? No! So, hot air is the primary cause and catalyst for inflation. The more people talk and complain about it, the more hot air is generated, and the bigger it gets. That’s why inflation tends to grow around election time and decrease shortly thereafter.
RJR: Is it really that simple? I thought the causes of inflation are quite complex.
Arnold: See, that’s the difference between you and me. Pigs usually find that the simplest answer is the right answer. And, as a pig, I am uniquely qualified to answer this question. People talk about things like the supply chain, the war in Ukraine, supply and demand and a lot of other economic mumbo jumbo that tends to obscure the real cause of inflation. The real reason prices go up is the same reason dogs lick their genitals, because they can. We pigs understand this. As soon as somebody anywhere utters the term “inflation” an automatic trigger is pulled in corporations across America – prices go up, profits explode, and CEOs dance.
RJR: But how about government spending? I hear all these Republican politicians blaming Joe Biden and the libs for spending taxpayer dollars like drunken sailors and causing inflation.
Arnold: Again, as a pig I’m uniquely qualified to answer this question. If government spending caused inflation, we would have high inflation all the time. Government spending never goes down. We pigs appreciate that the government trough is always full. When politicians complain about government spending, they’re really complaining about who gets to eat from the trough, not how big it is. So, as long as we pigs, and our allies the fat cats, are getting to eat, we say fill that baby up.
RJR: So what can ordinary citizens do to help solve inflation? It seems like we're all just helpless.
Arnold: Ordinary people are definitely not helpless and have the poser to destroy inflation with one simple act -- they can wear buttons. That's right, buttons! This is a proven solution that was first used in the twentieth century by the president known as Gerald Ford. They came up with a marketing slogan, "Whip Inflation Now", and produced buttons that people could wear that used the acronym "WIN". The idea is to get all Americans working together to fight a common enemy. What could go wrong? You know, sometimes the simplest solutions are the best.
RJR: Does inflation affect everyone equally?
Arnold: To answer that question I have to refer back to a painful incident in pig history – what you call the story of the “Three Little Pigs”. We in the Swine community find this tale upsetting. First of all, it’s not a fable, it actually happened. And these weren’t just three genericized pigs – their names were Fred, Ethel and Baxter. Fred had the stick house and Ethel built hers out of straw. As you can imagine, Baxter, because he came from a wealthy family, was able to build his house out of stone. So, when the Big Bad Wolf showed up (we knew him as Rocco) and blew those two houses away he didn’t just leave – he ate Fred and Ethel. Fred and Ethel tried to run to Baxter’s house but he wouldn’t let them in, so Rocco ate them. This is what happens with inflation: people who don’t have the money to build a stone fortress get eaten and nobody cares.
RJR: How do we know when inflation starts? Is there a signal we should be looking for?
Arnold: Again, you humans make things way too complicated. You run all kinds of economic models, analyze data, assess underlying and historical trends and where does it get you? I’ll tell you where – confused! We have a simpler method. We grab the littlest piggy we can find, and we send him/her/they to the market. If he/she/they come Wee, Wee, Weeing all the way back home we call it inflation.
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