One of the recurring themes I touch on when discussing inflation is the impact of price distortions. In some regards the absolute percentages of headline inflation are almost trivial. The real economic damage is that food, energy, and "core" inflation are all increasing at different rates, creating a perpetual …
One of the recurring themes I touch on when discussing inflation is the impact of price distortions. In some regards the absolute percentages of headline inflation are almost trivial. The real economic damage is that food, energy, and "core" inflation are all increasing at different rates, creating a perpetual disequilibrium for consumers.
But nature never tolerates disequilibrium for long. Eventually there is that "reversion to the mean"--it can be slow or swift, but eventually the disequilibrium will correct itself, and that correction will sweep over everything and everyone without fear or favor.
There is a huge disconnect.
One of the recurring themes I touch on when discussing inflation is the impact of price distortions. In some regards the absolute percentages of headline inflation are almost trivial. The real economic damage is that food, energy, and "core" inflation are all increasing at different rates, creating a perpetual disequilibrium for consumers.
But nature never tolerates disequilibrium for long. Eventually there is that "reversion to the mean"--it can be slow or swift, but eventually the disequilibrium will correct itself, and that correction will sweep over everything and everyone without fear or favor.