The failure of globalization and the return of inflation

Spectator/Mark Asquith/11-8-2018

“If globalization is rolled back, as now looks likely, inflation will return. The 1970s was the last time that Western inflation ran hot. Globalization killed that inflation. To imagine what reversing globalization may look like now, recall what happened in the 40 years since.”

USAGOLD note:  We have alluded to the possibility of tariff-driven inflation in the past on this page.  Rising import prices – the result of deglobalization, e.g., the U.S.-China trade war – will filter ultimately to consumers.  This will not be a monetary inflation but a political inflation and a different animal from anything we have encountered in the recent past.  As such, we are entering uncharted territory – one in which politics could outweigh monetary policy. Asquith does an excellent job outlining the potential problems and concludes that “the long-term trend may well be inflationary.”

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