Uh, Washington We Have a Problem.


Understatement. The headline refers to “a” problem. As if.

There are certainly a myriad of problems floating around out there and, sadly, most of them have originated in Washington. Most have also been festering for decades with politicians loathe to deal with easily foreseen problems. Well, time’s up. Reality is biting hard. Why? A $22 burrito. Really? A $22 BURRITO??

It’s never the big things that are the tipping points. Nope. It’s the little things that finally trigger “the last straw.” Years of zero interest rates (a/k/a free money) and their ramifications are still rippling through the economy. Those zero interest rates (and QE 1-20) incubated inflation. COVID related supply shortages and “relief funds” (free money) put lighter fluid on the simmering inflation and whoosh. Inflation, cost of living and $22 burritos.

For a long time the “official” speaking point for the Treasury and the Fed was inflation was “transitory.” Well, folks caught onto that tale pretty quickly and the Fed decided to act to quash inflation by rapidly raising interest rates to; a) ‘outrageous levels’ or b) long term ‘reasonable’ levels (you decide). Inflation has moderated BUT not the cost of living. Big difference. That difference is reality and it’s sinking in.

The $22 burrito is a wake up call.

Very obvious problems that have been overlooked are getting a new glance. Systemic banking liquidity issues? Yeah, so? Record credit debt? So what. Commercial real estate problems? Yawn. Unaffordable housing? Oh well. High gas prices? Sigh. Stocks at all time highs? Yeah, bull market.

But wait. There’s a $22 burrito? OMG! Things are REALLY bad. Inflation is out of control. The economy is in trouble. Really? A $22 burrito?

Now, in case you are wondering, its not “fake news.” Bay Area NBC News reports that La Vaca Birria in San Francisco’s’ Mission District raised the price of their signature burrito to $22 from $11 because of inflation. The owner says everything he uses to make his food has gone up. A sack of onions pre-COVID was $9. Now he says its…..wait for it….$80. The owner says regulars have decided to cut back but “It’s either raise prices or keep the prices the same, don’t make any money and we close our doors at one point.”

When burritos cost $22, it’s time to take note. Think Zimbabwe, Venezuela, Argentina. Their financial markets are NOT at all time highs. Maybe the burrito is telling us something.

Bill Taylor is the CEO of Digital Wealth News and AI & Finance and a 40+ year veteran of the financial markets.  You can also ready his weekly musings on BTC, ETH, Gold & S&P500 at “The Taylor Market Report“.