IN THIS ISSUE:

1. Overview – Is Inflation Set to Rise in 2021?

2. Why US Inflation Hasn’t Risen Higher Already

3. Money Supply Growth Doesn’t = More Spending

4. The Potential For Higher Inflation Just Ahead

Overview – Is Inflation Set to Rise in 2021?

Following the Great Recession and financial crisis in 2008-09, the Federal Reserve responded with unprecedented money creation, which was known as “Quantitative Easing.” Since then, the Fed has created trillions of dollars in new money, which mainstream economists were certain would lead to much higher inflation.

But much higher inflation never materialized. In fact, the Consumer Price Index (CPI) has averaged only 1.7% a year since 2009. After several years of higher inflation failing to materialize, most economists concluded something new must be going on and assumed sharply higher inflation might be a thing of the past, at least for the foreseeable future. This remains the view of the mainstream forecasting crowd today, for the most part.

Since the first of this year, however, I have been building a case for why inflation could rise more this year than the mainstream forecasters expect. Several of my most trusted sources seem to agree with me. We’re not predicting inflation will necessarily rise significantly this year, but what we are saying is the conditions for rising inflation are higher now than they’ve been in quite some time.