Inflation is Always and Everywhere a Monetary Phenomenon.

“Inflation is always and everywhere a monetary phenomenon.” The immortal words of the great economist Milton Friedman that John Greenwood and Steve H. Hanke at The Wall Street Journal argue are being forgotten by too many people today… (Wall Street Journal)

Some who like to throw cold water on monetarism argue that the velocity of money has collapsed and will mitigate the inflationary impact of the rapid growth of the money supply. While velocity did collapse with the onset of Covid, it’s on track to pick up until the end of 2024. Consequently, velocity will grease the monetary wheels. That’s why inflation might hit the high end of our forecast range. Mr. Powell and his colleagues should start paying attention to the money supply. Money matters. Indeed, it dominates.

Three-martini lunches are gonna get a lot more expensive and it could stay that way…

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Written by Tyler Cralle