You don’t have to wander too far into your local grocery to catch the unmistakable whiff of price inflation. From Charles Hugh Smith at oftwominds.com:
The global economy may have finally run up against hard limits of “infinite substitution” and “infinite expansion” funded by central-bank free money.
We are in an interesting Hall of Mirrors moment: prices are rising, yet we’re assured by the Federal Reserve that this inflation is “transitory,” and other voices are insisting the primary forces of the economy (globalization, debt and automation) are all profoundly deflationary, meaning prices of everything will eventually plummet as supply will outstrip demand. At this same moment, others are declaring the start of a new secular inflation that cannot be controlled with Federal Reserve interest-rate manipulation / bond-buying.
What do you see in the kaleidoscope of reflected images? Here’s a few things I’ve seen in the Inflation Hall of Mirrors:
— A package of three rib-eye steaks in Costco for $65
— a Ford dealership with no new Fords on the lot and a scattering of used cars
— A Nissan dealership with no Versas, Ultimas, Leafs, etc.
— used cars with 140,000 miles carrying nosebleed asking prices
— a basic breakfast in a restaurant for over $20
— resorts charging $450/day, with surcharges and taxes on top
— utility fees rising 10% to 20% annually
One can argue all of these are examples of temporary inflation generated by an imbalance of limited supply and high demand. Perhaps. But it may also be the case that the costs of production have increased in ways that are not temporary.