- Well, all of us are payingan extra $175 a month.

That's what we're now spending

on housing, groceries, and gasoline.

With no relief in sight, that could become

the new normal well into 2022.

- Well, the ongoing slow downat the nation's largest port

has a chokehold on theglobal supply chain,

increasing shortagesand driving up prices.

So what's being done to fix the problem?

CBN's Brody Carter bringsus a firsthand look.

- Here at the Port of Virginia,

they're already soakingup some of that congestion

that we're seeing in the West Coast.

They're operating very efficiently

and they're hopeful to keep that cargo

and turn it into long-term business.

- If you take your car

and you run it 100miles an hour every day,

that car begins to show wear and tear.

The industry is being runevery day at 100 miles an hour.

- [Brody] As many as 73container ships have been waiting

to unload goods at the portsof Long Beach and Los Angeles

over the last week.

The largest ports in thenation now a chokehold

to the global supply chain.

- The warehouses are full.

The truck capacity is being soaked up

because there's so muchcargo that needs to be moved.

- [Brody] LA/Long Beach processes

about 10 million shippingcontainers each year.

In comparison, all the major ports

on the East Coast process alittle more than eight million.

- And the ships keep coming.

- [Brody] The supply chainbottleneck is driving inflation,

store shelves are bare, andyou've likely felt the impact

in your wallet.

- Inflation takes its worst toll

on those who are at the lowest ladders

of income and wealth, poor people.

And so for those who are well to do,

it's just not really an issue,

but for the middle class

and those who are in lower income groups,

that's where the toll is taken

and, you know, it's likethey can't get a break.

- [Brody] Inflation is upmore than 5% just this year.

The typical American household

now spending an extra $175 more each month

on housing, groceries, and gas,

and it could be the new normal for months.

- On a 12-month basis,

the inflation rate willremain high into next year

because of what's already happened.

But I expect improvement bythe middle to end of next year,

second half of next year.- Second half of 2022.

- [Brody] Major companiesare charging more

because of rising costslike Nestle, Unilever,

and Procter & Gamble.

The US Postal Service andother shipping companies

have added new facilities,machines, and seasonal workers

in an attempt to avoid the brunt

of bottlenecks come Christmas.

- It's gonna take some patience.

It's gonna take some understanding.

And I would ask them,

if they know someone in the port industry,

thank 'em 'cause thosefolks are working hard,

and they are working hardfor the American economy.

- The strain in the supply chain,

it'll endure well pastCOVID-19 well into 2022.

Harris says they just hopethey can contain the workload

that they've already taken onto help alleviate the problems

we're seeing in the West Coast.

I'm Brody Carter, CBN News.

- Well, our CBN News financial editor,

Drew Parkhill, is with us.

And so Drew, what arethe causes for inflation

other than supply chain?

We seem to be focusedpolitically on supply chain,

but isn't energy a bigger component?

- Yeah, there are variousother things, Gordon.

For one thing, there'sa long-term price cycle

that just runs through the economy.

I want to show you a chart ofinterest rates I put together.

It's very, very simple.

But in 1940, now theseare three-month T-bills,

short-term rates.

On average, for the year,

short-term interest rates ran at 0%, okay.

But then inflation came in, and by 1981,

they're up over 14% in 40 years.

Then over the next 40 years,we saw inflation coming down,

and so last year, theywere back down close to 0%.

So there's a natural price cycle

and it's giving signs thatwe're going to see the economy,

inflation start heading back up again.

I mean, there's no question about that.

There are some other things as well,

like businesses are asking the president

to hold off on this vaccine mandate

because a lot of peoplejust don't want the vaccine

so they won't work andthat creates more problems.

- Well, are we looking atwhat we all experienced

in the '70s, which is stagflation?

- Yes, at least in the short term.

The GDP numbers for thethird quarter of this year

coming out Thursday morning,

they're expected to showa dramatic slowdown.

Now it won't be like the '70s.

But let me define what stagflation is.

It's a combination ofstagnation and inflation.

Just means high inflationand a stagnant economy.

You hit the nail on the head, Gordon.

In 1973 and '75, this wasthought to be impossible.

Inflation was running around 11% or so

and unemployment hit 9%, andthen a few years later in 1980,

unemployment was around 71/2% and inflation was 13%.

That was thought to be impossible.

Now we're probably goingto see some of that again

on a smaller scale, butit's definitely on the way.

We're living in it now

'cause the economy is slowing down

while prices are picking up,and some prices, of course,

more than others.

- Well, how's this goingto play out politically?

It didn't work for Jimmy Carter,

so how's it gonna playin the election cycles?

- It's already playing out.

You know, everybody wastalking a few months ago

about Joe Biden's socialspending and climate change bill,

gonna be 3 1/2 trillion.

Well then, there was polling done

that showed, in swing districts,

in key congressional districts,

people were just afraid of this

'cause they thought biggovernment spending, high deficits

were gonna lead to even more inflation,

so they said, "We don't wantanything to do with this,"

and then on a dime, the White House

and the Democrats start saying,

"Oh, it's gonna cost nothing,it's gonna cost nothing,"

and so they backed off a lot from that.

Now we have, the other problem is,

is that the taxation sideof it is being changed,

which I know we're gonnatalk about in a few seconds,

but Sinema and Manchin didn'tlike these corporate tax rates

and now they're talkingabout this billionaire's tax

which may be unconstitutional.

So there's still concern thatthey're gonna run deficits

despite what the Democrats are saying,

and with the Fed pouringmoney into the system,

that is definitely a problem,

and if it stays, if we keep this

through the next election cycle,

it's gonna be a massiveproblem for the Democrats.

- All right, well Drew,thanks for being with us.

I don't see any end to the deficits.

We've been running them for a long time,

ever since the second Bush.

These are incredible deficits that we have

and an incredible.