'..Another critical characteristic of the earlier inflation era was frequent temporary reversals in inflation, only to be followed by new peaks. That same pattern should be expected in the months ahead .. Much more aggressive policy moves against inflation may arouse some controversy. Nonetheless, they are needed..''This situation has been termed “inflationary psychology.” Consumers purposely advance their purchases in order to beat anticipated future price increases. Firms readily pass along higher costs to consumers, including the future cost increases that they anticipate.
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Importantly, the majority of today’s consumers did not experience the accelerating inflation of the 1970s. Most have personally experienced only very low inflation, with a few short-lived spikes in oil prices. This lack of experience has magnified their reactions to the higher inflation rate that now prevails. Another critical characteristic of the earlier inflation era was frequent temporary reversals in inflation, only to be followed by new peaks. That same pattern should be expected in the months ahead.
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Much more aggressive policy moves against inflation may arouse some controversy. Nonetheless, they are needed. Adam Smith’s legendary invisible hand describes how individuals acting in their own self-interest can create unintended benefits for the entire society. Unfortunately, the country now faces the potential for an inflationary hand that can transform self-interested decisions into losses for the entire economy.'
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Inflationary Psychology Has Set In. Dislodging It Won’t Be Easy, April 7, 2022
Context(Global Stagflation)(Inflation out of control) - US inflation at new 40-year high as price increases spread .. well beyond energy, June 10, 2022
'U.S. inflation is currently 6.8%, the highest rate in the developed world .. Almost universally, rates have been kept lower than the Taylor Rule had suggested.,' December 11, 2021
(Stagflation) - 'U.S. Inflation Storm..''Inflationary Psychology is Embedded' - '..global central banking inflationist experiment. This exercise has failed..''..a process of transition toward the only world financial order..' - Jesús Huerta de Soto