Where Shortages Show Up: The WTF Plunge in Retail Inventories

by Wolf Richter
Wolf Street

How messed up the economy has become, fueled by government moolah and Fed manna, when nothing and no one was ready for it.

When the government spends trillions of borrowed dollars to boost demand from all sides, and when the Fed prints trillions of dollars to monetize the borrowing binge by the government and also to inflate asset prices so that asset holders feel richer and start spending these gains (the Fed’s doctrine of the Wealth Effect), well, then you’re going to get some demand, a lot of demand, suddenly, particularly for goods. And this sudden demand has been ricocheting through the economy for over a year.

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