Highest Inflation Since 1982! (Well, sort of)
While we are forced to deal with all kinds of supply and price disruptions due to oh, global pestilence and war, it's good to remember that we often have a boat load of superlatives and hyperbole constantly thrown at us, the better to hold our interest by magnifying the story.
One current tagline in referring to our current inflation scenario is the constant drone of the "highest inflation since 1982."
Which is statistically correct, but contextually misleading.
Looking at the chart, and spotting the 1982 CPI level with the red square, the observer will note inflation was indeed on a level it has reached today, except it was on a sharp downward trajectory at that moment in time, thanks to Mr. Volcker taking his second foot off the brakes. Before the oft-mentioned 1982 anniversary, we were in one hell of a mess when it came to controlling pricing and the aftermath of the 1970s oil price shocks.
So if we ever reach the highest level of inflation since 1980, well, we'll be in a special kind of hell only those of us who lived through it can appreciate.
The coming year will be tough to navigate. I personally believed this would be a great year for the economy if COVID was well and truly in the rear window. As of this writing (3/10/2022) there appears to be yet another variant snaking its way around the UK, and hospitalizations are up while travel barriers are down. The Ukraine war throws another big unknown into the mix. Let us hope justice prevails for Ukraine and the monster is defeated.