Yes, inflation is way up this year. Now that the Chinese economy is teetering and the U.S. is pulling back from globalization, a re-set must occur.
Consumer prices jumped 6.8% in November, the single-highest leap we’ve seen since June 1982. That jump has contributed to the Fed’s decision to taper its pandemic-related efforts and expected implementation of three rate hikes in 2022. While everyone is panicking about inflation blowing up so much, they’re overlooking the fact that inflation has perhaps been way too low for a long time. What in the world is going on?
In the 1980s, a triumvirate of developments began a decades-long period that kept inflation in check. We’re talking about the United States’ greatly-improved agricultural output, innovations that led the U.S. to the lowest energy prices on Earth, and the rise of China as a global economic giant.
Supply chains will need rebuilding to represent the new world order, and that rebuilding takes time. We may feel the inflation pain a while longer.
