MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Commodity Price Surge Deals Stagflationary Blow to World Economy

davfordavfor
in Other Investing
The commodity price surge is getting my attention. It feels to me to be too soon to sound an alarm. But there seems to be an increasing amount of smoke in the air. Just how long does "transitory" last?
The world economy is facing a buildup in stagflationary forces as surging energy prices boost inflation and slow the recovery from the pandemic recession.

“We’re seeing all of this inflation,” Supriya Menon, a strategist at Pictet & Cie. told Bloomberg TV. “Ultimately how does that get resolved? Part of the way it could get resolved is through demand destruction.”

Bank of England Governor Andrew Bailey highlighted the conundrum when he drew attention to the limits of monetary policy to deal with some of the factors causing higher consumer prices.

“The shocks that we are seeing are restricting supply in the economy relative to the recovery of demand,” he said Monday in speech. “This is important because monetary policy will not increase the supply of semi-conductor chips, it will not increase the amount of wind (no, really).”
Stagflationary Blow

Sign In or Register to comment.