Inflation psychology has set in. Dislodging it won’t be easy.

University of Michigan/Richard Curtin/4-15-2022

“There is a high probability that a self-perpetuating wage-price spiral will develop in the next few years. Households have already become less resistant to paying higher prices and firms have become less resistant to offering higher wages. Prices and wages will continue to spiral upward until the cumulative erosion in inflation-adjusted incomes causes the economy to collapse in recession.”

USAGOLD note: Curtin, who has headed up the University of Michigan’s oft-cited consumer sentiment surveys since 1976, offers a concise, easy-to-read assessment of the new inflation. His bona-fides are bolstered by having lived through and reported on the inflation of the 1970s. “Another critical characteristic of the earlier inflation era,” he says, “was frequent temporary reversals in inflation, only to be followed by new peaks. That same pattern should be expected in the months ahead.”

Share
This entry was posted in Today's top gold news and opinion. Bookmark the permalink.