Blog: Inflation - What's different this time. Part 1.
There are other forces than government spending.
Fractal Market Cycles and Regimes has been live now for 17 months. In that time I've written 98 blogs and newsletters. 71 of these, or 72%, are about or refer to inflation. And it appears that we'll be talking about inflation for the foreseeable future. Why is inflation such an issue? Partially it's because a large swath of the investment and economics industry has been exceptionally poor predictors of its path. Why is that? I mean, inflation is a basic concept and has been extensively researched. That makes the poor performance of pundits even more disappointing. But what continues to surprise me is the large number of analysts who blame the current inflation regime on government deficits because they've been taught that deficits are the root of all inflation evil. The lack of deeper understanding of a very complex issue is troubling.
In addition, there are many aspects to the current environment which are unique to our time. Looking at these might help us understand the present as we look to the future without having to fall back on dogma. In the fall of 2021 I wrote a three part paper for First Quadrant called The Multiple Personalities of Inflation which is available to Supporters. Inflation was just becoming an issue, but the nature of the current inflation regime was not clear. Since then we have learned much. So it's time to reopen that discussion.