Peter on a recent conference trip I polled all the business owners like me and asked what is inflation you are seeing. The lowest was 14% and the rest were between 21 and 26%. While they said they saw it coming down a little recently it still remains way above what the government index catches. When you see the wild swings we went through in 2020 and 2021 you should expect equal and opposite reactions on the back end as China goes through this with an aging smoking community and worse hospitals. It isn\’t just Apple iPhones that will be delayed 2 months, it is medicine, and lots of things China supplies. Combine the fact that China factory orders were already down 40% because of its stance on Ukraine and the moves to threaten Taiwan – supply chains Reshoring supply chains or relocating them will run up inflation more. Factories are moving before China takes Taiwan in the coming months. I think inflation will flare up again in Q2 and strikes by railroad workers in the US and unions in the EU force sticky wage inflation. The tight wire in China is bouncing and we will see if Xi can navigate it, the rest of the world is having trouble even with capitalisms many checks and balances. Communism is likely to falter in this situation in Russia and China.
Hi Peter,
Interesting article, as always. With what you describe here, does the Dow to Gold ratio come back into play over the next years?
Could you please do an article about that?
Thanks
Peter on a recent conference trip I polled all the business owners like me and asked what is inflation you are seeing. The lowest was 14% and the rest were between 21 and 26%. While they said they saw it coming down a little recently it still remains way above what the government index catches. When you see the wild swings we went through in 2020 and 2021 you should expect equal and opposite reactions on the back end as China goes through this with an aging smoking community and worse hospitals. It isn\’t just Apple iPhones that will be delayed 2 months, it is medicine, and lots of things China supplies. Combine the fact that China factory orders were already down 40% because of its stance on Ukraine and the moves to threaten Taiwan – supply chains Reshoring supply chains or relocating them will run up inflation more. Factories are moving before China takes Taiwan in the coming months. I think inflation will flare up again in Q2 and strikes by railroad workers in the US and unions in the EU force sticky wage inflation. The tight wire in China is bouncing and we will see if Xi can navigate it, the rest of the world is having trouble even with capitalisms many checks and balances. Communism is likely to falter in this situation in Russia and China.