The inflation figures released last week were not particularly good. Consumer prices rose 0.6% in April, and the year-over-year change is now 3.8%.
Milton Friedman once said that inflation is “always and everywhere a monetary phenomenon”, but most people who cite that phrase seem unaware that he later acknowledged the limitations of that view.
There has been a lot of commentary about the resilience of the demand side of the economy. Personal consumption expenditures rose 0.9% in March and 5.7% year-over-year.
There are a lot of differences between now and the 1970s, but there are a lot of similarities too. The Fed was able to kill the inflation associated with the 1973 oil shock, but the cost was a recession.
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“You pay a very high price in the stock market for a cheery consensus.”— Warren Buffett
The inflation figures released last week were not particularly good. Consumer prices rose 0.6% in April, and the year-over-year change is
