Mauldin Economics

Dear Reader,

So, we have 5% inflation. Awesome.

Longtime readers know I’ve been predicting runaway inflation in The 10^th Man for nearly a year now.

Well, here we are. The Consumer Price Index, economists’ go-to inflation metric, soared 5% in May from a year earlier. It’s the fastest increase since 2008.

Some people are saying this is transitory, either for political reasons… or because they’re stubborn. Maybe both.

The inflation we’re experiencing is not transitory. We have permanently reset prices higher.

How much higher? Expect to see 10 percent inflation in 2022.

Part of this ties back to the labor shortage we’re seeing right now. Companies are so desperate for workers that a Florida McDonald’s is offering people $50 just to sit down for an interview.

It’s bananas.

Source: Business Insider

It’s hard to get someone to work for $10 an hour when the government is paying them more to stay home.

Wages are sticky. If you start paying people $25 an hour, that is not going back down—ever. That is the new base for wages. It will only go up from there.

And those labor costs will get passed along to the consumer. You!

Of course, there’s more to the inflation story than just higher wages. So, get ready—you’re going to hear from me a bit more than usual this week.

For now, keep this in mind—I am not the least bit panicked about runaway inflation. And you don’t need to panic, either.

I’ve already made lots of money on my inflation trades. And there are still opportunities for you to do the same.