The Day The Mule Died

Well, that was clarifying. The PPI for all commodities came in at 19.9% for August, representing the highest YoY gain since, well, the peak of the oil embargo in November 1974. As shown below, none of the other post-war cyclical flare-ups even came close.

And by now it’s also time to dispense with the silly talk about “base effects” and its only “transitory”. On a two-year stack basis we have inflation roaring up the wholesale pipeline at rates not seen since the 1970s. In fact, the acceleration is startling, and recall these two-year CAGRs have nothing to do with the spring 2020 Lockdown Plunge because they capture an average of last year’s swoon and this year’s rebound.