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Three bizarre reasons why inflation is here to stay

When I was about five years old in the early 1980s, my dad brought home our first computer.

I’ll never forget it– it was an clunky IBM with a tiny, orange, monochromatic monitor, and dual floppy disks. It had 640 kilobytes of RAM, and no hard disk.

I loved it. With that computer I learned how to program, how to navigate a command-line interface, how to design algorithms, and how to solve constant problems… because it was ridiculously buggy and would break down all the time.

It was also painfully slow. The boot-up process could easily take an hour, from the time I flipped on the power switch, to the time I saw the ‘DOS prompt’.

Sometimes I think that computer is a great metaphor for the global economy. Turning it off is nothing; you flip the switch and the power goes off. But starting it back up again takes a long time. And the process isn’t so smooth– sometimes it crashes during bootup.

Last March when the Great Plague was upon us, nearly every industry, in nearly every country in the world, practically shut down.

And many businesses went bust, never to return.

Eighteen months later businesses have largely reopened. But like my old computer, the reboot process has been riddled with critical errors and system failures.

For example, right now there are countless businesses in industries from retail to manufacturing that are experiencing severe labor shortages. Supply chains around the world are breaking down, resulting in product shortages and major transportation bottlenecks.

The end result of this dumpster fire is that prices are soaring. And I wanted to spend some time today connecting the dots to help explain some of these important trends.

…click on the above link to read the rest of the article…

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