American economist Milton Friedman famously said inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a monetary increase in the quantity of money relative to output.
On Wednesday, the U.S. Bureau of Labor Statistics released the inflation data for December and 2021 in their comprehensive year-end U.S. report on inflation. By the end of December, the U.S. economy realized a 7% inflation rate for 2021 as measured by the Consumer Price Index (CPI). Also, the report notes that for the last three months of the year, inflation averaged 9.3%.
The U.S. economy has not seen annualized inflation of 7% in roughly 40 years. If one looked at the state of the U.S. economy in 1982, one finds the most popular television show was Family Ties (with Michael J. Fox); Ronald Reagan was president, gasoline sold on…
