March 1, 2023
“Inflation: The Gift that Keeps on...Taking” by Peter Zeihan
1 March 2023
We have lived in a constant state of change in the past few years due to the COVID-19 pandemic. The resulting economic instability has caused inflation to rise sharply to 9%, with devastating effects for people’s livelihood.
There is however hope for a reduction in inflation in the next few months as supply chains catch up (it typically takes eighteen months for structural changes to filter through), energy demand decreases with Europe experiencing an unusually warm winter, and agricultural yields improve under remarkably favourable weather conditions this past year.
But don’t get used to it…
The inflationary build-out of electric infrastructure under the Biden Administration’s Inflation Reduction Act, the impact of the Ukraine war on fertiliser exports and Germany’s energy supply, and increasing Chinese labour costs will unavoidably impact medium term inflation rates.
Peter Zeihan believes that without sharp policy changes, the current low inflationary period of 2022-2023 is likely to be the best the world will see for a long time.