It is too late already to unleash any definitive knock out punch against inflation. Damn it, it isn’t TRANSITORY. Stop that nonsense.
“Do not listen to this Big Red Car. Inflation will be 2%. Trust me. OK, maybe 4%. Sorry, PPI is 8.6%, so CPI will be double digit, but it’s TRANSITORY. It’ll come down in 2030 or 2035. I promise. My husband is one of the 17 Nobel economists who says Build Back Bolshevik will cure male pattern baldness. He can’t be wrong.”
It is here; it is deep; it is pervasive; and it isn’t going away any time soon.
Let me tell you why I think it is deep. It is embedded in commodities.
[Rod Serling Twilight Zone music in the background.]
Suppose you are the greenest of the Green Wet Dreamers in the history of Green Wet Dreamers — yeah that person. You recycle gum wrappers and you carry a plastic baggie of kale with you wherever you go — full disclosure: love kale.
You drive a bloody electric vehicle.
You are so committed to electric vehicles you are prepared to ignore the reality that we will have to 6X the electric grid to make it work and that that will take decades to do and will require nuclear power. Screw crawl, walk, run — freeze in the dark and $10/gal for gasoline? Fine with y’all cause, well, because it is.
But, here’s the bloody rub — the price of lithium carbonate, critical ingredient in car batteries of the type needed for EVs — has gone to the moon and is still trending higher plus China controls most of it.
Priced in “yuan per tonne” but you can see the trend, right?
POTUS Biden comes into office in Jan 2020 and what happens to the price of lithium carbonate? Goes through the roof.
This one change in commodity prices will increase the price of an EV by $500-1,000 and is continuing upward.
This is why I say inflation is already here, deep, pervasive, and isn’t going away any time soon. It is everywhere.
Have a great weekend. I will be rooting for Georgia over Alabama for the SEC championship. You?
“WTF have I done? Everything is more expensive. Is this Big Red Car right? He must be because I’m always wrong. Oh, well, weekend at the beach house for me and Jill baby. Damn, she’s hot. Glad I have a good job with a great house, free transportation, and a chef. I got mine.”