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Arnott also predicts recession coming. So, in a way inflation will triple is contradictory to that observation.
Now, high inflation and recession do not normally go together as during a recession, companies lose pricing power as demand decreases they have to reduce prices to move the inventory or can't increase prices. A recession also typically creates excess inventories in oil which is a major cost component of many manufactured products. Recession causes jobs losses and wage driven inflation disappears.
So, the likelihood of recessions with high inflation is very low and cannot self sustain for a long time. Either the recession ends and economy returns to growth path or recession wins and inflation decreases. The only way I can see high inflation with recession is due to food inflation. If the drought causes the food supply to be too limited, food inflation will creep in.
Thanks for posting. My take from the article is he does not think inflation will happen at the same time as the recession, but inflation will jump "toward the back end of the next recession" as he stated. So protecting yourself against inflation has to be timed correctly, and purchased near the end of the recession, or else those inflation investments will decline if held during the recession.
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Now, high inflation and recession do not normally go together as during a recession, companies lose pricing power as demand decreases they have to reduce prices to move the inventory or can't increase prices. A recession also typically creates excess inventories in oil which is a major cost component of many manufactured products. Recession causes jobs losses and wage driven inflation disappears.
So, the likelihood of recessions with high inflation is very low and cannot self sustain for a long time. Either the recession ends and economy returns to growth path or recession wins and inflation decreases. The only way I can see high inflation with recession is due to food inflation. If the drought causes the food supply to be too limited, food inflation will creep in.