Inflation Shoots to Multi-Decade Highs, Market Froth Accumulates, and Checking In on China’s Debt Crisis
November 11, 2021 | FIRESIDE CHARTS
The various gauges of inflation are confirming what we already see at the pump, at stores and online—prices are going up and there is little sign they will abate anytime soon. Producer inflation is particularly acute as the world-wide supply chain continues to struggle to catch up and the newest Covid wave brings more lockdowns abroad. There are more signs the markets need a rest and China’s debt crisis is getting worse. Today is Veterans Day and the anniversary of the end of World War I. Thank you to all who have served and preserved our democracy!
1. The latest CPI showed what we all already know—inflation is here and much of it does not look transitory! CPI is now running at multi-decade highs with no signs of a let-up.
Source: The Daily Shot, from 11/11/21
2. Here is the latest U.S. PPI:
Source: The Daily Shot, from 11/10/21
3. While wages have started to rise due to the post-pandemic situation, all wages are being eroded by inflation. The pace is similar to the inflationary period of the late 1970’s:
Source: BofA Global Research, from 11/10/21
4. More information on why central banks are being cautious on increasing rates:
Source: Pavilion Global Markets, from 11/10/21
5. Children are a major driver of economic activity. The cohort or pool of women of childbearing age is shrinking as is the number of children per mother. Will this be a headwind for growth going forward?
Source: The Daily Shot, from 11/11/21
6. The U.S. equity markets have had a lot of leadership change during the pandemic:
Source: S&P Global Market Intelligence, from 11/11/21
7. Another sign of markets getting “toppy”?
Source: The Daily Shot, from 11/11/21
8. As inflation and concerns over its persistence rise around the globe, TIPS continue to grind higher:
Source: The Daily Shot, from 11/10/21
9. The real estate debt crisis, exacerbated by broad government “regulatory intervention”, continues to worsen in China. So far, no signs of contagion elsewhere:
Source: The Daily Shot, from 11/10/21
10. PPI is rising fast in China. Will this inflation get exported here?
Source: The Daily Shot, from 11/10/21
10. Even Japan’s PPI is surging. Their economy has been stuck in many deflationary cycles since their real estate bubble decades ago. Is this the end?
Source: The Daily Shot, from 11/10/21
10. Perhaps this is why we have deadlock and such a political divide in Washington. Our military knows how to get things done! On this Veterans Day, we thank you for serving your country and providing us all with the greatest gift of democracy and freedom.
Source: Pew Research Center, from 11/11/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.