The record-shattering 9.6 percent rise in producer prices indicates a startling level of inflation inflicting the U.S. economy.
Things are even worse once you get beyond the headlines. Further out on the supply chains, prices are rising even more rapidly, suggesting that product shortages and even more inflation are yet to come.
When you look at goods that are processed by U.S. manufacturers for sale to other businesses, such as an appliance manufacturer selling to a retailer or a software maker selling to an digital game store, prices are up by more than 26 percent. …
This indicates that there is a lot of inflationary pressure built up in the pipelines of the economy.
The central banks need to keep a 1970s level inflation of about 10 – 15% (which the CPI will record as perhaps half that) for about 10 years in order to work down the level of debt back into the healthy range.
Too bad for lenders and people to whom grocery prices matter, but great for borrowers. If you’ve borrowed megabucks to buy assets, this will be great (until the markets tank).