Beautiful Virgin Islands

Sunday, Sep 21, 2025

The return of the inflation monster?

The return of the inflation monster?

The younger generation – under 50s - have not experienced nor understood the evils of inflation like older folk have. And today there is a warning the world may be entering stagflation as inflation rises to the 10% mark; energy prices increase by up to 60%, and war in Ukraine drives up commodity and food prices. These are serious economic times indeed.
For decades, inflation- rising prices- has not been a concern for the world’s thinkers, organizations, and consumers. If anything, deflation – falling consumer demand and falling prices- was the major fear.

Now, deflation is the opposite of inflation and can be as destructive as inflation to the economy. Deflation, when left uncontrolled, leads to collapse in prices and further leads to economic shock and depression.

Deflation – falling prices through weak consumer demand - can cause economic depression, which is a severe and prolonged recession. Deflation can structurally damage an economy for decades, destroying the productive capacity of an economy.

OK. Confidence is a key term in economics and is another word for faith. Economics works on confidence or the lack thereof. What we believe is what is. Faith and doubt drives the global economy from the Cathedrals that are Central banking, Investment, and consumer behavior.

Falling confidence, or a lack of faith in the western economy, was evident post-2008. However, falling confidence and cautious consumers, post the Great Financial Recession, kept the inflation beast at bay. A lack of confidence – pessimism- led to weak consumer demand that depressed prices. The threat of deflation was the chief impediment to economic growth.

OK. Post the 2008 financial crisis, Central Banks led by the Federal Reserve pumped hundreds of billions of dollars into the global banking system annually- Quantitative Easing. This was an effort to lift up credit and liquidity, in an attempt to fuel consumer demand and avoid stagnation, recession, and depression. QE was a huge success in the effort to avert deflation and economic depression.

However, 12 years later, by mid-2021, there were assessments and warnings by Central Bankers and drivers of economic policy, that QE may be unsustainable, and that the result would be a rise in inflation. Nevertheless, no one predicted the severity of the inflation to visit the western world.

Severe inflation is exactly what we are all experiencing this March 2022. That invisible dance between supply and demand that decides both the cost and prices of products and services, has driven up prices for consumers.

There is an imbalance between consumer demand and supply with consumers getting the short end of the stick, and producers able to increase prices without much effort. That is the inflation narrative today. The supply side is able to drive up prices without kickback from consumers. In fact, stagflation: rising prices and slowing economic growth is the new bogeyman.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
EU Set to Bar Big Tech from New Financial Data Access Scheme
China Bans Livestreaming and AI in Religion Amid Crackdown on Shaolin Temple Scandal
Documents Reveal Mandelson Failed to Declare Epstein-Funded Flights as MP in 2003
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Harris Memoir Sparks Backlash from Democrats for Blunt Critiques in ‘107 Days’
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Japan’s ‘Death-Tainted’ Homes Gain Appeal as Prices Soar in Tokyo
Massive Attack Withdraws from Spotify Over Daniel Ek’s €600M Defence-AI Investment
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders Third Lethal Strike on Drug-Trafficking Vessel as U.S. Expands Maritime Counter-Narcotics Operations
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
Why Google Search Is Fading and AI Is Taking Its Place
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Federal Judge Dismisses Trump’s Fifteen-Billion-Dollar Suit Against New York Times, Orders Refile
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
DeepSeek Claims R1 Model Trained for only $294,000, Sparking Global Debate Over China’s AI Capabilities
SoftBank Vision Fund to Cut Nearly Twenty Percent of Staff in Bold AI Strategy Shift
Intel’s Next-Gen Manufacturing Gets a Lifeline from Nvidia’s Strategic $5B Deal
Erika Kirk Elected CEO of Turning Point USA After Husband Charlie Kirk’s Assassination
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
×