Markets in Chaos

Where We Are Now and Heading in the Future

In the chapter on the COVID-19 crisis in the United States, I had cautioned on inflation, even though at that point in time the CPI wasn’t indicating a material rise in inflation. For those that have gotten this far in the book, you will know it is clear we were likely to arrive where we are now with soaring consumer price inflation. The Federal Reserve opted to print enormous amounts of paper money, and then consumers went out and spent this money. These actions make paper money less valuable, and consumer price inflation is stimulated. Quoting Ray Dalio, “prices rise when the amount of spending increases by more than the quantities of goods and services sold increase.” It is stunning that the Federal ...