You're missing the point: if the boat sank to the bottom of the ocean but then floated up halfway, you're still underwater and dead. Despite what everyone here wants to believe, the boat is the economy and the move up is irrelevant because we're STILL DROWNING.
You conflate strong price action and a strong and healthy economy. These things are not the same. I thought the discussion was about price increases, ie. inflation. Not about real GDP growth.
If the boat is prices, it's more like it sank to the bottom of the ocean and popped right back up and started flying.
You sound like a central bank official here. Price increases are not really price increases if they are due to supply chain disruptions?That's what the past year and a half has been. We are in the middle of the biggest deflationary event of history. Like I keep saying, there's supply chain issues and dislocations but there is no inflation.
Now even the FED has recently shifted its tune from "nothing to see here, there is no inflation" to "ok but it isn't our fault, it is despite our best efforts !"
Stagflation is high inflation + low GDP growth.Would you agree that we have stagflation
I don't think anyone here is arguing that we'll have high inflation + high growth.
So far the most important deflationary force has been labor cost arbitrage through globalization - China basically. That was at the (hidden) cost of making supply chains fragile. There could be a paradigm shift now that the fragility of globalized supply chains has revealed itself.I agree in theory that most macro forces are deflationary minus current supply chain hiccups.
Black line : M2 growth (money printing)
Red line : inflation
The spike in inflation could be delayed by a few years, just like what happened after WW2 or in the 70s and 80s. But it would be strange if it never happened.