It was May 30th, 2021, that I published my first analysis of accelerated inflation and explain the basics in that article:
It is important to know that CPI passed above the +2 stdev in April 2021 for the first time in the past 12years.
In September 2021 Inflation just passed the +4stdev ..!
A little statistics:
In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates that the values tend to be close to the mean of the set, while a high standard deviation indicates that the values are spread out over a wider range.
If you are checking the rate of change in the past 12 months, it is 5.38%, which is much higher than September 2011 the highest reading in the past decade with 3.81% ..! (5.38/3.81=1.41=> 41% higher)
This becomes more interesting if you check the rate of change in the past 16 months: 7.11% exponential Inflation in a 16 months period which has not been seen in the past 3 decades!
For a 12 months period, it is 5.38% is the highest in the past decade! and the 3rd highest in the past 4 decades!
In the past 4, the rate of change does not show any decrease!
Now let's review the real causes of Inflation:
Milton Friedman: “Inflation is always and everywhere a monetary phenomenon".
Increased government spending is good for the economy, but it can lead to scarcity in some goods and inflation will follow.
Everyone knows this administration is willing to spend more to achieve a higher employment rate and GDP, which means more inflation!
We also experiencing Demand-pull inflation, when demand surpasses supply, higher prices are the result. This is demand-pull inflation.
Demand-pull inflation is the upward pressure on prices that follows a shortage in supply, a condition that economists describe as "too many dollars chasing too few goods."
A Broken supply chain in time of high demand:
U.S. supply chains have suffered major damage due to the combined factors of the coronavirus pandemic, short-term corporate planning, and underinvestment in logistics, a new report from S&P Global Research found.
To wrap it up:
I am not an economist and I can not find any evidence for a lower inflation rate in the next few months, but I have found many to support a higher inflation rate for the next few months!
I strongly believe anyone who talks about "Deflation" at this moment is either a fool or tries to fools others..!
Best,
Moshkelgosha
Reference article:
https://www.investopedia.com/terms/d/demandpullinflation.asp
https://www.investopedia.com/terms/i/inflation.asp
It is important to know that CPI passed above the +2 stdev in April 2021 for the first time in the past 12years.
In September 2021 Inflation just passed the +4stdev ..!
A little statistics:
In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates that the values tend to be close to the mean of the set, while a high standard deviation indicates that the values are spread out over a wider range.
If you are checking the rate of change in the past 12 months, it is 5.38%, which is much higher than September 2011 the highest reading in the past decade with 3.81% ..! (5.38/3.81=1.41=> 41% higher)
This becomes more interesting if you check the rate of change in the past 16 months: 7.11% exponential Inflation in a 16 months period which has not been seen in the past 3 decades!
For a 12 months period, it is 5.38% is the highest in the past decade! and the 3rd highest in the past 4 decades!
In the past 4, the rate of change does not show any decrease!
Now let's review the real causes of Inflation:
Milton Friedman: “Inflation is always and everywhere a monetary phenomenon".
Increased government spending is good for the economy, but it can lead to scarcity in some goods and inflation will follow.
Everyone knows this administration is willing to spend more to achieve a higher employment rate and GDP, which means more inflation!
We also experiencing Demand-pull inflation, when demand surpasses supply, higher prices are the result. This is demand-pull inflation.
Demand-pull inflation is the upward pressure on prices that follows a shortage in supply, a condition that economists describe as "too many dollars chasing too few goods."
A Broken supply chain in time of high demand:
U.S. supply chains have suffered major damage due to the combined factors of the coronavirus pandemic, short-term corporate planning, and underinvestment in logistics, a new report from S&P Global Research found.
To wrap it up:
I am not an economist and I can not find any evidence for a lower inflation rate in the next few months, but I have found many to support a higher inflation rate for the next few months!
I strongly believe anyone who talks about "Deflation" at this moment is either a fool or tries to fools others..!
Best,
Moshkelgosha
Reference article:
https://www.investopedia.com/terms/d/demandpullinflation.asp
https://www.investopedia.com/terms/i/inflation.asp