Financial analysts and Wall Street economists and journalists are strange thinkers: Ever since March they forecast inflation would have “peaked” by the next month, but found it kept accelerating instead; but they have accepted a single month’s apparent deceleration—from 8.9% year on year officially in June to 8.5% in July—as the clearest possible signal that “inflationary pressures are disappearing.” Leaving aside the fact that no such “sign” has been seen in European economies, this is goal-seeking in the guise of forecasting.
In fact, as EIRNS reported in late June, what is descriptively called “demand destruction by inflation"—one of the factors of recession and economic contraction—has been causing the (speculative) prices of many commodities to fall, but the real shortages of those commodities are in many cases getting worse. The worst case is in food and fertilizers. By 2023 or even late 2022, absolute global shortages will exist unless “green” policies are beaten back, cartels broken and investments greatly increased. Speculation on those shortages will drive prices further up, even as recession pulls them down, making extreme volatility in inflation rates. Even in the United States in July, for example, energy prices dropped sharply but food prices took over the inflationary drive, with “food at home” having inflated 12% over the year to July.
