& BRIEFLY NOTED: For 2021-12-17 Fr: FIRST, WE HAVE a very nice reframing of the current mindset of the Federal Reserve by the extremely smart Robert Armstrong and Ethan Wu of the Financial Times: The Federal Reserve currently anticipates that their medium-run inflation target can be restored with an increase in interest rates of only 250 basis points over the next three years....
Inflation is inherent to fiat currencies. Mammonites, as a matter of faith, insist that real money is deflationary; if it's not deflationary, it can't be money. (Which is why the crypto bros are just like goldbugs; different means, but the same axiom.)
This will always generate distress that inflation -- any inflation whatsoever -- exists. It isn't a rational response. Trying to reason people out of it is not notably productive.
I am still on Team Transitory. We're looking at food supply chains and seeing things that I just don't think will be an issue latter part of next year. 2019-2021, we went from eating over half our food away from home to eating over half our food at home. We also had big ships that could move bulk ag products around the world all of a sudden had to start moving Pelotons. 2021-2022, you don't just flip a switch and watch it run back(for?)ward again. Though the logistics are known, there is enough uncertainty around omicron, that processors, distributors and warehouses don't want to be caught running full steam ahead only to have to flip the switch a second, third, fourth time. Here is a simple little example. When you are eating half your food away from home, (most) restaurants and institutions don't want shelled eggs. When you are eating at home, foodies don't want buckets of liquid eggs. In 2020, you couldn't just put the liquid back in the shell, seal it up, and put it on the shelf (there weren't even enough egg containers). The engineering on going back to what you did in 2019, is known, but you don't want to get caught making the wrong decision if omicron shuts things down again.