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Inflation

Food price inflation is on the rise globally as an increased population, coupled with more affluent consumers, raises demand at a time of constricted supply.

Highly competitive markets will be the best way to ameliorate this effect.

However, we can expect to be entering a period of higher inflation as the easy-money era is over.  I would recommend reading "The Price of Time - The Real Story of Interest" by Edward Chancellor.

From Google's AI, Gemini, here is a summary:

In "The Price of Time", Edward Chancellor argues that a long period of extremely low interest rates, especially in the aftermath of the 2008 financial crisis, has caused significant damage to the global economy. He contends that interest is the "price of time"—a fundamental mechanism for allocating capital and valuing assets—and when this price is suppressed by central banks, it distorts economic signals and leads to widespread problems.


Historical Context and Core Argument

Chancellor begins by tracing the history of interest from ancient Mesopotamia to the present day, demonstrating that interest rates have always been an essential, albeit sometimes controversial, part of economic life. He argues that interest is not merely the "price of money," but a vital tool for balancing present consumption against future investment. The book's central thesis is that when central banks intervene to keep rates artificially low, they are effectively manipulating the most important price in a market economy, with severe and far-reaching consequences.


Key Themes and Negative Consequences

Chancellor identifies several negative outcomes that he attributes to this era of "easy money":

  • Financial Instability and Asset Bubbles: Ultralow rates encourage excessive risk-taking and speculation. They devalue future cash flows less, making assets like stocks, real estate, and cryptocurrencies seem more valuable than they truly are, leading to "everything bubbles." He cites the overvalued start-ups and speculative manias seen in recent years as prime examples.

  • Weak Economic Growth and Low Productivity: Cheap money allows unproductive "zombie companies" to survive and accumulate debt instead of failing. This prevents the process of "creative destruction"—where inefficient firms are replaced by more innovative ones—which is crucial for long-term economic growth.

  • Rising Inequality: The main beneficiaries of asset bubbles are those who own financial assets, leading to a widening gap between the wealthy and the rest of the population. At the same time, savers and pensioners are penalized as their interest income plummets, forcing many to work longer or accept less for their retirement.

  • Excessive Debt: When borrowing is cheap, governments, corporations, and individuals are incentivized to take on massive amounts of debt. This increases the fragility of the entire financial system and makes it more vulnerable to a crisis.


Conclusion

"The Price of Time" serves as an urgent warning that the policies of central banks have created an unstable and distorted economic landscape. Chancellor concludes that only by understanding the true function of interest can we hope to address the profound economic insecurity, rising inequality, and financial fragility that have become hallmarks of the modern era. The book is a critique of modern monetary policy and a call to return to a more market-driven approach to interest rates.

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