BLS August CPI at 5.3% – Will Inflation Really Be Transitory?

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Source: U.S. Bureau of Labor Statistics

Federal Reserve Chairman Jerome Powell says inflation will be transitory and that the “process of inflation” will stop, but that’s not what I’m seeing in the real world. Every where I look (or shop), I see more and more signs of the effects of monetary inflation on prices–commodities, rents, real estate, food, and financial assets have all been skyrocketing as the lock downs have eased.

Here is just a small sample of the numerous headlines that lead me to question this transitory inflation narrative:

An inflation storm is coming for the U.S. housing market

Container shipping rates between U.S. and China exceed $20,000, hitting a record

Aluminum Tops $3,000 For First Time Since 2008 On Supply Woes

One Of The Largest US Supermarket Chains Warns Inflation Is About To Impact More Americans

Fed On Verge Of Losing Control: Consumers Expect Inflation In 3 Years To Hit A Record 4

Food Inflation Hits Record High, Prices Up Sharply on Beef, Chicken, Pork, Turkey, Eggs, and Fish

Inflation was hot in July, but rent isn’t showing up yet and could drive prices higher

The late great Robert Wenzel provided an amazingly accurate overview and analysis of US inflation back in April 2021. His assessment was very prescient, and I definitely believe it still applies today. Betting that serious inflation was right around the corner, he was also very fond of exclaiming, “Hug your gold coins!” His cautionary words still ring in my ears, more relevant now than ever. RIP Bob.