by John Rubino
Dollar Collapse
Today’s inflation report was, by any measure, horrific. 7% in a country where 2% was, until recently, the upper end of the government’s target range, pretty much guarantees some kind of aggressive response from the Fed (or the bond or currency markets or all of the above).
Here’s the Wall Street Journal’s take on the situation. See if you can spot the flaw in its reasoning:
High inflation is the dark side of the unusually strong economy
Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said what started as pandemic-specific inflation has now “broadened out across many, many categories both on the goods side of the economy and on the services side.”
“It reflects supply constraints both in the goods market and the labor market but it also is a function of still strong demand, particularly from U.S. consumers,” she added.