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Inflation Risks Rise Sharply In Latest CPI Data

May 12th, 2021 Comments off

The U.S. Bureau Of Labor Statistics has released its April figures, and they have surprised analysts. They show a CPI rise of 0.8 %, , far higher than expected. In the past twelve months, inflation in the United Sates stood at 4.2%, and is clearly accelerating. As many observers note, even this worrying data understates many price increases more reflective of what is impacting the typical American consumer.

This blog has warned previously of the growing threat of inflation and eventually stagflation-high inflation in conjunction with a severeĀ  inflation. At present, inflationary pressure not only in the U.S. but globally are rising. In the case of America, there are a number of volatile factors accelerating inflationary pressure in the U.S. economy. The trillions of dollars in new public debt accumulated in only one year since the outbreak of Covid has overloaded the economy with monetary stimulus, creating a highly inflationary dynamic. The pandemic and public policy responses have

Sheldon Filger-blogger for GlobalEconomicCrisis.com

also added to the inflationary matrix. Then there are the unexpected but increasingly more common cyber attacks, a growing geopolitical reality.

The recent cyber attack on a critical oil pipeline in the U.S. has generated economic shockwaves, leading to gas shortages, long lines at gasoline stations and double-digit price rises. The response of the Biden administration: It is strictly a private sector decision on whether or not the company pays ransom to the hackers, and the government has no official position on the matter.

The example above does not leave grounds for optimism. The impotence of Washington D.D, is itself a contributing factor to inflation. Investors are already beginning to anticipate an eventual end to the near zero-interest policies of the Federal Reserve.