Tony's Quarterly Newsletter

Inflation has dropped throughout 2023 in most places as a result of central bankers’ interest rate increases and drawdown in the money supply.

As expected by many, conquering inflation is proving to be more difficult than simply implementing a brief period of interest rate increases.

The surge in inflation seems to be cooling off a bit in most places. After the pent-up demand following the pandemic and interest rate increases by central banks, economies have cooled off, resulting in lower inflation.

It seems to me that the current rise in inflation to uncomfortable levels may very well prove to be more structural, or semi-permanent, rather than transitory as portrayed by central banks and some economists.

It used to be that economies expanded to the point that inflation picked up and central banks raised interest rates to cool things off.

Central banks recently flooded the world monetary system with liquidity and forced interest rates down to offset the negative effects of the COVID-19 pandemic.

Inflation has been rising quite quickly for the first time in decades.