Old buffers are spent. Inflation causes collapse.
Rowley 21 [Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs. He was formerly Business Editor and International Finance Editor of the Hong Kong-based Far Eastern Economic Review and worked earlier on The Times newspaper in London, "Why the global inflation surge could signal an economic collapse", 11/22/21, https://www.scmp.com/comment/opinion/article/3156716/why-global-inflation-surge-could-signal-economic-collapse]
But that is not the point. This time is different. As noted, the inflation surge comes at a time when financial and real estate asset values have been boosted to record and clearly unsustainable levels. That was not the case during previous great inflations.
As measured by the consumer price index, the annual rate of inflation in the US to October 2021 was 6.2 per cent. Annual inflation was running at 4.4 per cent in October in the European Union, and the UK’s Consumer Prices Index rose by 4.2 per cent in the 12 months to October.
Dramatically accelerated though these rates have become, they still do not approach the inflation levels seen in some previous episodes and certainly do not suggest hyperinflation. They are, to a large extent, caused by supply chain bottlenecks which continue to worsen as the Covid-19 pandemic reasserts its grip.
But again, it is not the absolute levels of inflation that are most important at this time – it is the very fact of inflation. The phenomenon had, in many people’s view, been banished by supposedly perpetual monetary easing and Modern Monetary Theory.
Inflation has returned from the dead, as the rising gold prices attest, while its persistence is likely to consign cryptocurrencies such as bitcoin to the crypt. Inflation’s resurrection threatens to undermine markets in a way that resembles or even surpasses an earthquake.