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CPLIE - The Exponential Inflation Mega-trend

Economics / Inflation Nov 21, 2022 - 10:13 PM GMT

By: Nadeem_Walayat

Economics

People need to learn to forget about graphs such as this (Annual percentage change in CPLIE) -


And instead focus on graphs such as this (10 Year change in CPLIE) -

Which as far as I am aware currently I am the only one posting this measure of Inflation. This graph far better illustrates where we stand in terms of the Inflation pain that is yet to come that will be hidden in the former graph, where the inflation pain to date is a mere pin prick of what is to come! If you stare at the annual percentage graph then all you will see is a series of peaks and troughs, that on the surface will not look so bad, i.e. it will appear that Inflation is being brought under control as successive peaks will tend to be lower than the preceding peak but what most will miss including ALL academic economists is the EXPONENTIAL NATURE OF WHAT WILL COME TO PASS i.e. a COMPOUNDING of the inflation pain! With the headline rate stubbornly refusing to fall to anywhere near the Bank of England's 2% target because when inflation was LOW one was not too bothered about holding onto a significant amount of cash, especially in times of economic and market uncertainty. However, in times of persistently HIGH INFLATION the last thing one wants to do is to HOLD ONTO CASH! What this means is that the VELOCITY OF MONEY WILL INCREASE in response to which there is little that the governments can do other than to trigger an economic depression, massive job losses to crush demand.

This is where we currently stand at the very beginning of this decades long exponential inflation mega-trend where once the dust settles, the 10 year Inflation graph of the 2020's will resemble that of the 1970's!

And you lucky folk continue to have several years advance warning of what is to come so as to be able act to LESSEN the INFLATION PAIN that is yet to come for all we can do is to limit the damage that will be done as it is difficult to preserve let alone grow ones wealth at a time when the economic pie is shrinking in real terms.

This article is an excerpt form my recent analysis on the current state of the embryonic bull market Intel Empire Strikes Back! The IMPOSSIBLE Stocks Bull Market Begins! that was was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Also access to my extensive analysis that concludes in detailed stock market trend forecast into the end of 2023 Stocks Bear Market Max PAIN - Trend Forecast Analysis to Dec 2023 - Part1

Recent analysis includes -

So for immediate first access to to all of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

My Main Analysis Schedule:

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Your mega-trend investing analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2022 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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