The FED is ignoring inflation in oil and food, and for good reason.
High oil prices are deflationary over time, as economic activity including personal consumption is curtailed by high energy prices.
Higher food prices are due to poor rainfall in many areas of the world, and America is adding to the problem by growing corn for ethanol instead of using farmland for food. One effect is natural and temporary, and has nothing to do with govt. The other is the result of govt subsidy which can easily be ended.
The bulk of assets in the world and in the USA are deflating in value. This is a situation much more worrisome than inflation.
Structural inflation requires rising wages pushing a wage-price spiral due to an overheated economy experiencing full employment. That’s obviously not happening. And that’s why the bond market isn’t paying attention to the inflation crowd. The silver and gold markets are tiny compared to world bond markets. If inflation were truly upon us, we would not have a 30 year bond under 5%.
Silver and gold bugs may turn out to be wise, but for the wrong reason. Silver and gold can be useful during a deflationary collapse. Food and farmland will be more valuable in that case however.
People thing that when the price of some things goes up, that’s inflation. There’s much more to it than that. It is not unusual to have inflation in some items during a time of general deflation. People also love to talk about Germans running around with wheelbarrows full of money during their hyperinflation. The thing to take note of is that they HAD wheelbarrows full of money to run around with due to a wage-price spiral.
Is that why farmland prices are also rising sharply, along with the freeze dried food shortages?