Varney: Inflation pops up in the most unexpected places
Auto industry battles supply chain issues as inflation surges in US
Stuart Varney: Inflation pops up in the most unexpected places
FOX Business host Stuart Varney breaks down 'basic economics' as the car industry sees massive demand for used cars.
"Varney & Co." host Stuart Varney discusses the car industry as the U.S. grapples with surging prices, arguing "inflation pops up in the most unexpected places" during his "My Take" Wednesday.
STUART VARNEY: Inflation pops up in the most unexpected places – sometimes it's a real shock.
This is the Grand Caravan from Chrysler. Before we get to the inflation bit, I have to tell you that when my children were young, I was driving Grand Caravans one after the other.
In the 80s and 90s, we bought 6. I look back and think it was one of the best vehicles, dollar for dollar that I ever owned.
USED CAR PRICES SURGING IN 2022: MARKET ‘ABSOLUTELY NOTHING’ LIKE WE’VE SEEN BEFORE, EXPERT SAYS
Here's the inflation part.
If I had put a three-year-old Grand Caravan up for sale one year ago, Edmunds, the car people, say I could have gotten $15,200 for it.
That same minivan would bring in $25,700 today! Up 69% in one year – that’s inflation!
Turns out, the Grand Caravan, for whatever reason, shows the biggest price inflation of any used car model!
As my colleague, Charles Payne says, that 69% gain is a better performance than 99% of all money managers. Thank you, Charles Payne.
RETAIL SALES RISE FASTER THAN EXPECTED IN JANUARY DESPITE SURGING INFLATION
So what's going on here?
It’s fairly straightforward: The pandemic lockdown and the chip shortage cut the production of new cars. So used cars were much in demand. Consumers had the money to bid prices up and that’s what happened.
It’s a basic economic lesson; cut supply, raise demand with government handouts and money printing, and prices go up. It's the same with energy, it's the same with food. It's a lesson the White House, the Congress and the Federal Reserve really have to learn.
CLICK HERE FOR THE LATEST FOX BUSINESS REPORTING ON INFLATION