A Time for Hunkering Down

In February your humble blogger, admittedly sensitized by the experience of the 1970's, saw the warning signs:

Today's gargantuan deficits in the $trillions and near-zero interest rates have not resulted in inflation...yet; but now may finally be the time when history repeats.

Speaking of the 1970's, the approaching train wreck had grown more apparent by May:

The economy is warm if not hot, the Administration is proposing $trillions in additional spending, and the Federal Reserve is promising to keep rates low...It is possible that the economy will not experience inflation if high government spending on the wrong things (unemployment insurance extensions that keep workers home), high taxes, and high regulation results in stagnation. But an economic boom and low inflation? No way...and I hope my pessimism is wrong.

Policy mistakes are now obvious in December, and the economy is experiencing the highest inflation in 39 years: [bold added]

U.S. inflation reached a nearly four-decade high in November, as strong consumer demand collided with pandemic-related supply constraints.

The Labor Department said the consumer-price index—which measures what consumers pay for goods and services—rose 6.8% in November from the same month a year ago. That was the fastest pace since 1982 and the sixth straight month in which inflation topped 5%.

Inflation: no more semi-annual sales of Spam
and prices are up by 8%

We're just going to have to hunker down as best we can while the Federal Reserve slows the growth of the money supply by tapering its bond purchases.

Meanwhile, I'm glad I stocked up on Spam when it was on sale before COVID-19.