This statement has been my largest critique of market pundits who cite CPI or the GDP deflator when making the case that inflation is benign or a non-event. Faber states this perfectly in the below video.
Inflation is everywhere and always a monetary event. It does not matter what the we pay for, in aggregate, certain consumer goods or that we trade down from steaks to hamburger to cat food as costs rise. The chart of M2 sums the case up nicely.
Aggregate non-seasonally adjusted M2
The percentage change in M2 on a year-over year basis.
Inflation is everywhere and always a monetary event. It does not matter what the we pay for, in aggregate, certain consumer goods or that we trade down from steaks to hamburger to cat food as costs rise. The chart of M2 sums the case up nicely.
Aggregate non-seasonally adjusted M2
The percentage change in M2 on a year-over year basis.
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