Inflation Causes
Travis Turner is a leading inflation expert and has identified many causes of inflation.
The three traditionally cited causes of inflation are the federal government deficit, the trade deficit, and the federal debt monetization by the Federal Reserve through quantitative easing.
Federal Deficit Causes Inflation Crowding Out Private Investment
The federal government deficit causes a federal debt that grows ever larger with rising interest payments. The federal debt allocates capital away from the private sector towards the government finance sector. But for our $39 trillion debt, that money which was spent on tax supported programs, would have been spent in the private sector.
Give the private sector a million dollars and what happens.
They build a factory that produces goods in large quantities, causing prices for that product to fall.
Money that is moved towards the government sector produces zero goods. Spending more on government leads to fewer factories and good paying factory jobs.
The federal debt is a substantial inflation cause. This is why I am working on #NationalDebtPayoff. If we pay down the #NationalDebt, inflation will plummet.
Trade Deficit Causes Inflation Through Currency Devaluation
The trade deficit causes inflation by placing downward pressure on US currency. The US currency is gradually devalued, causing the cost of all imported goods and services to rise, particularly oil. Even though US domestic production of oil has increased substantially, the price of gasoline has increased from nearly $1.00 in 2000 to $4.50 in 2026, nearly a 4X increase also meaning the value of the US currency has decreased by 75% in twenty-five years in terms of gasoline prices.
In addition to economic factors, there is strong fix cause of the US trade deficit. The issue is with the Federal Corrupt Practices Act which prevents US companies from making facilitation payments in international settings. However, in international business, the FCPA is too stringent and imposes criminal liability on US managers for things they can’t fully control in foreign markets.
The net result is thousands of companies do not do international business, or with limited scale. The FCPA could be fixed where companies with adequate controls and training have no executive liability, and their operational liability is not criminal in nature but instead a 100X repayment of facilitation payment that could be insured against by operational managers. Another related legal cause is the Canadian email law that prohibits emailing Canadian customers.
Federal Reserve Causes Inflation Through Quantitative Easing
The Federal Reserve has a mandate to cause inflation. That’s right, the job of the Federal Reserve is to increase the money supply and cause inflation at the target rate of 2% per annum. However, in reality, the federal debt is being monetized at a much higher rate. The Federal Reserve prints money through the quantitative easing process and as a result, monetary inflation has increased dramatically over recent decades.
Restraints of Trade Cause Inflation Through Supply Restriction
In every industry, there are micro-focused restraints on trade that cause inflation. A restraint on trade in the legal market is state specific bar licensing. There is no national market for legal services but instead 50 separate state markets. It costs hundreds or even a thousand hours for an attorney to switch or add state bar licensing. The net result is substantially higher legal fees, which show up in consumer good prices as well as general insurance prices.
Every industry employs restraints on trade. In the medical industry, medical licensing agencies restrict medical school admissions, causing the price of medical services to be far higher if they were not controlled by medical industry restraints on physician education.
Marketing Causes Inflation with Demand Manipulation
One company sells running shoes for $30 a pair while another brand sells them at $120. What is the difference? Well, there may be some product quality cost difference but likely not a huge difference in inputs or labor costs.
The difference is branding. One marketing firm spent millions on their brand, which causes them to get a higher price in the market. Over time, however, more marketing means inflation. Marketing spending has skyrocketed over the last few decades and product quality has fallen. Word of mouth advertising relies on excellent pricing and good customer service while marketing driven sales result in inferior goods and services being peddled.
In the 1950s, there was some advertising on TV, print media, and magazines but nothing compared to the marketing budgets of today. Back then, consumer products were affordable by one family wage earner, and now it takes two family wage earners and it seems like prices still climb higher.
Mergers Cause Inflation Through Supply Restriction With Fewer Competing Firms
Mergers eliminate key competitors and restrict supply. For instance, in the car rental market, it might seem like there are ten national suppliers of rental cars. But when you dig into a little deeper, you find that three brands have actual one owner and two other brands have a different owner. What seemed to be ten car rental companies, is actually like six car companies. Each firm charges higher prices because there are fewer competitors and this causes inflation.