The only disagreement is from the bond market.
For the record, the COVID pandemic was the most deflationary event in modern world history. How do we know? Because oil went negative for the first time ever. Now it has recovered back to the pre-pandemic level and copious morons are convinced THIS is inflation.
Here we see that reflation expectations and the oil market track each other 1:1.
Last year's deflation "event" is quite clear on this chart.
There is no doubt that on the supply side, bottlenecks in the global supply chain have been exacerbated by this halting clusterfuck of an economic restart as Keystone Kops policy-makers use "science" as an excuse to implode the economy.
Unfortunately, as indicated by decade low consumer sentiment, there will be NO demand-side follow-through to keep this level of "inflation" sustained. Even less likely now that the pandemic emergency unemployment program has officially ended.
Nevertheless, it's clear that today's economic illiterates still haven't learned that "inflation" is always highest at the end of the cycle and lowest at the beginning.
With the CPI report due out this week, I have no doubt that we will be hearing plenty of inflation hysteria. All of which is highly reminiscent of September 2008 when the collapsing banking dominoes were ignored due to end of cycle inflation concerns.
I can't see how artificially bidding up prices to unsustainable levels AND thereby maximizing liabilities ahead of a burgeoning global debt crisis makes any sense. One thing we know for certain is that it has certainly raised the political stakes resulting from the fallout of this failed gambit.
Here we see that auto loans have been going parabolic since the pandemic began. At a level not seen since the Y2K Tech bubble:
I believe this is a bad idea.
Auto loans, $ change billions
Gamblers are also ignoring the fact that the prime beneficiaries of this "inflation" bubble have been the mega cap Tech deflation trades. Stocks that have been on a parabolic rise higher since the pandemic began.
This chart shows that the average U.S. stock gave up ALL of its past decade gains during the pandemic. It shows that Tech stocks accounts for virtually of the "market" gains. Which means that the S&P 500 has turned into a closet Tech bubble.
Another warning sign. IGNORED.
I've heard many people claim that this is a "stagflationary" event. However, the stagflation of the 1970s took place when capacity utilization was near record highs AND labor share of the economy was AT record highs. Today, both are at RECORD lows.
Imagine how happy Jeff Bezos is now that he has millions more drivers to deliver bon bons in real-time. Now yuppies can click a button and hear the doorbell ring :15 minutes later.
True paradise.
In summary, this is all very reminiscent of September 2008, only this time the stakes are 10x higher.
"Evergrande has the distinction of being the world’s most debt-saddled property developer and has been on life support for months. A steady drumbeat of bad news in recent weeks has accelerated what many experts warn is inevitable: failure."
Observers are watching to see if Chinese regulators make good on their pledge to clean up the country’s corporate sector by letting “debt bombs” like Evergrande collapse"
Back in September 2008, the Fed let Lehman collapse. And then the Disney markets shit a brick when they realized there IS such a thing as real losses.
Position accordingly.
