Supply Shocks and Money Printing Keep Prices Rising

Even the mainstream press has to face the facts sometimes. Not often, perhaps. But sometimes. And this is one of those times (3/16/26), courtesy of the Wall Street Journal:

The Fed Keeps Getting Hit With New Shocks in Its Yearslong Inflation Fight

A series of supply setbacks has kept prices above target for five years. Now officials have to put a number on what that means for interest rates.

It’s happening again.

For the fifth year running, Federal Reserve officials find themselves expecting inflation to fall back to their 2% goal only to be confronted with another disruption that complicates the path. First it was the pandemic’s aftershocks. Then, Russia’s war in Ukraine. Last year, a sweeping tariff program.

The most recent data suggested inflation progress stalled even before America’s war in the Middle East disrupted one of the world’s most important shipping routes. The turmoil could send up energy and commodity prices in ways that could further delay reaching the target.

As we said, it’s always something.

The WSJ noted the Fed has been running price inflation hot, more than double its own target for five years in a row.  It looks like this:

One can only wait to see how the single biggest oil supply disruption in history will work out, but it is already a greater disruption than when the Suez Canal was closed in 1956.Gasoline is up 25 percent, around $1.00 per gallon in many places.Diesel is reported to be up 44 percent.But it is important to remember that there is more to these challenges than just today’s gasoline price.Supply chains have been disrupted, refiners damaged, storage capacity degraded, shipping damaged.

Other consequences, like certain fertilizer shortages and price hikes are rolled in as well.All of these things threaten much higher price inflation in the near term. Washington will meet that challenge before November with more giveaways and vote-buying to calm a restive electorate.More giveaways and vote buying that will be enabled by “printing press” money.

The Fed can never stop inflating!  It’s what they do.  It’s the only tool they have.  And now Washington’s debt is so massive that it must inflate…  or die!

That makes the case for gold both compelling and urgent.