The headline from MarketWatch says it all:
Thus despite the lip service paid to the markets by the ECB, the final output costs of higher energy prices is now filtering through to the German and thus all of Europe’s economy. Trading Economics provides a 25 year chart to illustrate how high and fast this increase truly is; but note this data is based on the German government’s information:
That rate was 7.9% but per the European harmonized standard it is at 8.7% which means that the ECB is letting it run out of control.
Now think about what we are witnessing in Europe. The complaint that this is all “Putin’s fault” is nonsensical since prices were starting to accelerate in the summer of 2021 as insane energy policies began to create supply disruptions around the world.
After reflecting on that idea, then think about what happens to the US inflation rate when the throughput costs of higher petroleum prices hits via plastics, packaging, etc. during the later summer months of this year.
It would be wise at this moment to ignore the “inflation has peaked crowd” as they are the same ones that said that equities will never suffer a bear market again thanks to modern technology.
Reality is about to bite folks, and it will be a lot uglier than most could ever imagine.
Got food and gold?