hendi_alex

Hyperinflation, Here We Come

I don't think that looking at one component of prices/expenses could allow one to proclaim or reasonalbly predict inflation of any kind. Especially when the "inflation" is mostly tied to very volatile commodities.

Another argument that rising energy is deflationary goes like this. Energy rises while the cost of labor stays relatively constant. The consumer gets squeezed, slows spending on everything except essential food, and the economy contracts, bringing on a round of deflation.

Finally, currencies often move through fairly long duration cycles. The excess military spending will end, adjustments will be made in the consumption of crude, excesses will be squeezed from throughout the system, exports will continue to increase, the imbalance of the dollar vs other currencies will shift, and the pendullum will swing in the other direction.