Even as inflation bites, U.S. corporate profits remain flush

This article did not mention recession. Any kind of recession. The possibility of which was raised by recent inverted yield curves. And history, itself. So, inflation has already been factored into most world equities by now, sure, and investors need to return expectations closer to reality, sure. but really very few (if any) companies are taking into account an intelligent plan to deal economically with what logically comes next. Instead, we get more talk of normal buying patterns away from massive government stimulus, and the availability of ready capital to finance even more long term debt and growth. All of this would be interesting if it wasn't for the uncomfortable feeling that we are watching a slow-motion train wreck in progress.

Many people continued to get paid during the lockdowns, but stopped paying mortgages and rent with no adverse consequences. That’s how a lot of money was saved by consumers.

Hundreds of billions of dollars were fraudulently obtained from the PPP program. The banks didn’t care about vetting the paperwork because it wasn’t their money, some people were approved for millions of dollars in 5 minutes for companies and employees that didn’t exist.

Then the government forgave loans without vetting. The government has only brought 127 people to court, and will never get to the tens of thousands of people flush with cash before the statute of limitations runs out.

Plus, the billions and billions of dollars of fraudulent unemployment claims with people pulling in $30,000 per month for a year through stolen and fake identities.

The greatest fraud in the history of the world.

But that stolen money will eventually run out. That’s what’s been driving the US consumer demand for expensive cars, luxury goods, jewelry, etc. They’ve been like so many lottery winners who go broke in a year or two. When it does, demand is going to decline… hard.

Those profits ARE the cause of the inflation. Inflation does not just magic itself out thin air and invisible hands.

Even during the worst supply shortages, most of the big corporations were making record profits. Enough to see that the supply shortages were nothing more than a minor inconvenience to them.

There is an old saying, "Never doubt a corporation's ability to take advantage of a catastrophe or disaster at the expense of the customer."