{"id":60624,"date":"2021-11-23T20:09:10","date_gmt":"2021-11-24T01:09:10","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60624"},"modified":"2021-11-23T20:09:10","modified_gmt":"2021-11-24T01:09:10","slug":"food-inflation-is-the-2022-crisis-not-supply-chains","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60624","title":{"rendered":"Food Inflation Is the 2022 Crisis, Not Supply Chains"},"content":{"rendered":"<header class=\"ArticleFull_header__11o5_\">\n<h3 class=\"ArticleFull_title__2cUI6\"><a href=\"https:\/\/www.zerohedge.com\/markets\/food-inflation-2022-crisis-not-supply-chains\">Food Inflation Is the 2022 Crisis, Not Supply Chains<\/a><\/h3>\n<\/header>\n<div class=\"NodeContent_mainContent__38L44\">\n<div class=\"NodeContent_body__2clki NodeBody_container__1M6aJ\">\n<p>The real trouble will start when this year\u2019s energy crisis morphs into next year\u2019s food inflation problem.<\/p>\n<p>We\u2019ve all become armchair inflation experts. And why not? It\u2019s almost impossible for anyone to keep getting it as systematically incorrect as\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-11-11\/why-economists-underestimated-u-s-inflation-s-pace-persistence?sref=6uww027M\">professional economists\u00a0have done\u00a0<\/a>this year.<\/p>\n<p>It\u2019s time for the conversation to move beyond the current obsession with eye-catching headline numbers.\u00a0<strong>That we\u2019re in a global\u00a0inflation regime\u00a0of a kind not seen for decades, is beyond doubt.<\/strong><\/p>\n<p>Interest in supply chains is at a 17-year high, according to\u00a0Google Trends, but it has become a red herring when it comes to forecasting the persistence of inflation.<\/p>\n<p>Supply-side constraints are usually a key initial catalyst in any price spiral. And it\u2019s intuitive that the vast majority of supply-side issues are\u00a0\u201ctransitory\u201d\u00a0in nature as supply eventually responds to higher prices. So, while it\u2019s\u00a0good to know\u00a0when supply-side pressures will ease, that knowledge isn\u2019t sufficient to conclude when the broader inflation threat will pass.<\/p>\n<p>What we need to establish is whether demand will take over in leading the inflation charge. And, for that purpose, inflation expectations are critical. As measured by breakeven rates, U.S. 5-year expectations have\u00a0breached\u00a03% for the first time in at least 19 years. The U.K. equivalent is well above 4% for the first time in\u00a0records\u00a0going back more than 25 years.<\/p>\n<p>Expectations of higher inflation have the double impact of encouraging people to front-load spending, further pushing up prices, as well as the more important effect of laborers demanding higher wages, thereby both directly increasing costs and the future pool of capital allocated to demand.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Food Inflation Is the 2022 Crisis, Not Supply Chains The real trouble will start when this year\u2019s energy crisis morphs into next year\u2019s food inflation problem. We\u2019ve all become armchair inflation experts. And why not? It\u2019s almost impossible for anyone to keep getting it as systematically incorrect as\u00a0professional economists\u00a0have done\u00a0this year. It\u2019s time for the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[32210,31065,265,18189,16364,13351,3237,4318],"class_list":["post-60624","post","type-post","status-publish","format-standard","hentry","category-economics","tag-32210","tag-bloomberg-markets-live","tag-energy-crisis","tag-food-price-inflation","tag-mark-cudmore","tag-price-inflation","tag-supply-chains","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60624","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60624"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60624\/revisions"}],"predecessor-version":[{"id":60625,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60624\/revisions\/60625"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}