Temporarily Unexpected

The authors warned that “neglecting inflation leaves global economies sitting on a time bomb.”

“Few still remember how our societies and economies were threatened by high inflation 50 years ago,” David Folkerts-Landau, Deutsche Bank chief economist and head of research, wrote in a paper co-written by his colleagues Jim Reid and Peter Hooper. ”The most basic laws of economics, the ones that have stood the test of time over a millennium, have not been suspended. An explosive growth in debt financed largely by central banks is likely to lead to higher inflation.”

“We worry that the painful lessons of an inflationary past are being ignored by central bankers, either because they really believe that this time is different, or they have bought into a new paradigm that low interest rates are here to stay, or they are protecting their institutions by not trying to hold back a political steam roller,” Folkerts-Landau added. “Whatever the reason, we expect inflationary pressures to re-emerge as the Fed continues with its policy of patience and its stated belief that current pressures are largely transitory.”

Don’t worry, it’s temporary: The Consumer Price Index (CPI) for May came out this morning. At 5 percent, it was higher than expected.


31 Replies to “Temporarily Unexpected”

  1. We need to change the US from having ‘reserve currency status’ as its inflation is transitory.
    On top of our corrupted politicians spending spree in ALL levels of government.
    And they want you to pay for it…

    1. Don’t you worry your pretty little head there boy!
      Mark Carney has your back!
      So does Larry Summers (former Obama Treasury Secretary)!
      (LOL, sarcasm)…….


      “In his remarks, (former Bank of Canada and Bank of England head, current Liberal Party advisor Mark) Carney said that he thought there was a risk higher inflation would persist even beyond the Fed’s willingness to tolerate price gains to make up for this past undershooting. The balance of risks is headed toward “the prospect of inflation being above target for longer than the makeup of the past undershoot,” Carney said.”

  2. We have words for persons who borrow credit with no intention of ever paying it back.
    Conman,thief,bandit,Politician and Bureaucrat.
    Bankrupting a country through massive borrowing and printing of IOUs(Paper moneys) is fraud.
    Doing massive damage to a countries ability to operate,is treason.
    And indebting children yet to be born,is Evil.
    Maliciously selling our grandchildren into future wage slavery,for present pleasures,is malicious,pernicious evil.
    This level of treason is deliberate,incompetence can only carry you so far.

    How about we form our New Country and impose a reward for the capture or death of all those who killed the old country?
    That would be one way of removing the parasitic overload.

  3. 5% is as low of a lie that is believable. Is there anything that went up less than 10%? A lot of stuff went up 20 to 30% or more.

    1. Passing on the massive more regulatory changes…
      Also, many stores have had massive losses that ‘just two weeks’ turned into a year and a half so far.

  4. Hope no one here holds any bonds. When the criminal Federal Reserve finally raises interest rates, it will make the bond massacre of the ‘60’s look like a child’s birthday party, by comparison. (. Btw TIPS use a government controlled inflation calculation, so don’t think you’re safe if you own them.)

  5. “Then [the Fed] excluded surging food prices and the idea of ‘core’ inflation took shape. Subsequently, more and more items were excluded”

    If you exclude all those prices that are rising, it turns out that prices aren’t rising at all.

  6. Well it ain’t a surprise! Anyone that buys gas, food, lumber, and other stuff, is well aware of the rise, er Mercury type lift off, acceleration, eruption, explosion of the cost of everything the past year or so. funny though, my pension, and most incomes have not “exploded” to match that rise. Strange that, gee, I wonder what on earth could be causing a repeat of the late seventies? I’m at a complete loss, Hmmmm.

    1. my pension, and most incomes have not “exploded”

      Your and my pension is indexed to the Consumer Price Index. They are hiding the inflation to screw old people just after they got through with killing us with a pandemic. Giving everything to the shithole world while attacking people who have paid taxes in Canada all their lives.

    2. OR ……… purchase some guns

      with guns you can get all of the above eh?

      Including the afore mentioner rostered Sister Wives .


  7. As a saver I welcome higher interest rates “it’s about f*cking time”. As an investor, waiting for the crash. As a Canadian, watching the country devolve into a Third World shithole to be run by a political mafia self styling as Marxist liberators.

    1. Mind you…
      The terrific deals you get from China with no taxes and free shipping.
      I have picked up quite a few unique items never before available by shopping on line.
      My ‘man-cave’ is turning into a gold and silver room. Really going to be impressive when I’m done.

  8. It’s gonna get bad for a very long time. If you are not prepared, you don’t have much time. The four G’s, Gold, Grub, Guns, and Ground should be adopted. Also, a place to grow food, or share with someone who does, start pressure canning protein, storing dried goods, stuff for trade, booze, cigarettes, toilet paper, medical supplies, fortify your residence, and have backup propane and gasoline.

    I invite others to add to this list.

    I’d like to say I’m prepared and ready, but there is never enough time or items to add to the plans, just keep “quietly” building your personal Arc. If you end up not needing it, it won’t hurt, but if you end up needing it……………..

    1. Drop gold. You cannot eat it, smoke it or wipe your ass with it. Normal everyday items and services will be the bartering standard.

      1. I agree and its too expensive.
        If you really want/need some shiny stuff for a plan B then get some silver. Its typically undervalued.

    2. @ GerryK

      I’ll add in some solar capabilities, even if just a little to charge batteries or a bit more to keep your fridge/ freezer and furnace fan running.

    3. You forgot to mention the 4 Sister Wives to do the canning for you eh?

      and other duties as assigned by roster. lolollolol

  9. Funny how the last inflation crisis they talk about coincides with another Trudeau in power.
    Then again, when you have a former head of the Bank of Canada and Bank of England praising Marxism, not for some lofty ideals it has failed to achieve, but for the failures it achieved, you know we have a problem.

  10. The Official CPI stats are a joke. They do not record the things that drive up costs of taxpayers at all, the necessities of life. Food, Fuel, etc.
    Shadow Stats who record inflation numbers the old way show inflation is now over 20% and climbing.
    I mean come on FFS oil is over 70 US /Barrel this am.
    And they never count massive taxation into the CPI at all. Yet Canadian Families Pay more in Taxes than they are allowed to keep for the necessities of life. Food, Clothing and Housing. A criminal level of taxation to keep all of those government employees in the style they have become accustomed too.

    Canada’s Total Government Debt under SHITCON Harper in 2014 was 4.1T then add 2T for SHITLIB Trudeau. Our GDP is just over 1T since Covid so make it a Debt to GDP of 6x Debt to Income Ratio.
    Canada owes more than all of the EU countries minus Germany.
    How does any adult think this will end. I mean come on get a grip on reality.
    Canada is done.

    EU Debt 2020 by country. Canada owes way more than almost all of the EU combined. With only a population of 38M in comparison to the EU population. Canada will be broken up. Perhaps seized by outside powers who knows.
    Can’t be broken up soon enough for me

  11. Now the Idiot Macron proposes at the G7 that all G7 countries sell off their physical gold to help Africa.
    Well too late Canada began selling all its physical gold reserves under the Communist SHITLIB PE Trudeau and each PM after kept selling the 1000 Metric Tonnes of Canadian Reserves and the SHITCON Harper sold the last while he was in office.
    How about doing something for our own people.
    I give a rat’s ass about the 3rd world or Africa. Let them ESAD as far as I am concerned.

      1. No John the sales started under PET and Mulroney, the biggest sales were under Chretien and Martin.
        “Canada held some 1,023 tonnes in 1965. That was the zenith. By 1985 Canada’s holdings had fallen to 500 tonnes. Throughout the 1990s and up to 2002, Canada kept selling its gold. Canada has now reached its nadir in gold holdings. None.”

        They were all in all of them.

  12. I was told just yesterday that ABS pipe has gone up 10 TIMES in price since Jan. 2020 and its really difficult to get.
    Of course oil is going up. Wait till people start travelling again be it by car or plane or dirty bus.
    Lots of groceries are wayy more expensive.
    Skilled labor is getting harder to find. That means more work requires OT pay to get jobs completed. Charging more means it costs more. OT is usually 50% minimum.
    I’ve seen companies offering hefty signing bonuses.
    This might be a perfect storm for large inflation and it certainly isn’t temporary and already hasn’t been brief.

  13. As one who works in the sheet metal business, I can tell you that most steel prices have doubled in the last year. Certain types of less widely used steel tubing can be ordered, but the supplier won’t give us a delivery date.

    1. Yup. During my work on settling my father’s estate, I sold lots of scrap steel to a recycler. Nearly 3 years ago, it was around $50/ton. Last week, I sold some more and it had tripled in between time.

  14. Vox Day had a debate on this topic nearly a decade ago, as you know, he’s an economist. The debate was about whether inflation or deflation was more likely in the future. He said deflation was, and the reality of it all has proven him correct.

    The fact that inflation is happening, as predicted, related to the corona, is not new.

  15. Who believes these official numbers anyway?
    Gas is up.
    Food is up.
    Housing is up.
    Electricity is up.
    Vehicles are up.
    Building supplies are up.
    All consumer goods have gone up.
    Other than flat out lies, they just exclude things that have gone up.

  16. Well I remember. And that’s why I locked in my low-interest fixed rate mortgage and zero-interest financing even though I could have got an even lower interest variable rate mortgage. Five years from now I’ll be paying pennies on the dollar for what the assets are worth in real terms.

  17. “…….sitting on a time-bomb”.

    That right there is what is known as an “undocumented feature”.

    While most people are either bewildered or watching the rearrangement of the deck-chairs on the “Tyranic”, the real operation will continue unabated.