Strategy of pain
Eurozone supercore inflation is at 6.0% and is by no means peaking.
In Japan, inflation increased by 4.4% in January compared to January 2022: strongest annual inflationary surge since 1981!
In the USA, inflation was at 7% for January, and revised upwards for the 4th quarter of 2022.
Very disturbing, these figures show that central banks have made much less progress than expected.
If there is a fundamental lesson to be drawn from previous inflationary cycles, it is that it becomes impossible to eradicate when its embedded in mentalities and in actions without a thorough destruction of demand and of consumption.
Expect the least favorable scenario possible because the only strategy will be the strategy of pain = raising interest rates to levels much higher than expected in order to break the economy, and therefore inflation.
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