Inflation is coming, inflation is coming!

Last month I wrote about the distinction between long-term secular inflation and shorter-term cyclical inflation

It has been clear for several months that we are in the middle of a cyclical rise in

The full thread can be reviewed here:

https://t.co/0jBvHOWuHw

2/
Today's PPI report should have been expected to surprise to the upside as the leading indicators of inflation have been screaming to the upside for months!

Here is the ISM prices paid index, cumulated into a growth rate

3/
Industrial commodity prices have also seen a major acceleration for months.

4/
So today's PPI report was in line with the leads, suggesting that we have a cyclical upturn in inflation that is * primarily concentrated in the manufacturing sector *

This is a key point.

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Core PPI showed an increase in year over year terms to nearly 2.5%.

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To be very clear, this cyclical upturn in inflation will continue for the next several months and should not be expected to fall apart imminently

This does not mean the secular disinflationary trend is over. We have had 4-5 of these upturns since 2010. They happen. They fade

7/
Sticking with the trend of a general manufacturing-based upturn, what else surprised to the upside (shouldn't have been a surprise)...industrial production.

IP growth increased to -1.83% y/y

8/
Industrial production for manufacturing specifically is almost back to positive growth on a year over year basis.

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Should we expect the manufacturing-based growth and inflation upturn to continue?

Yes.

But remember to differentiate cyclical for secular.

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We're not changing this trend anytime soon.

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TLDR:

Play the cyclical trend. Don't lose sight of the long-term fundamentals.

12/12

More from Finance

** MEGA THREAD ON Cryptocurrencies/Blockchain**

I wanted to know the best resources to learn about cryptocurrencies and blockchain for someone with zero knowledge. I asked Twitter, and Twitter answered.

This thread is a compilation of the best resources I was recommended. 👇👇

Let's start with ** BOOKS **

The first thing you should do before you pick up any book:

Learn about Bitcoin & Ethereum by reading the respective whitepapers.

- [Bitcoin white paper](https://t.co/cErOaFn6QL) by Satoshi Nakamoto

- [Ethereum White paper] (
https://t.co/0g5kYCGJGq) by Vitalik Buterin

Even if you are not tech savvy, you can get a good grasp about how blockchain functions from these papers.

1) *The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them* by Antony Lewis

This book covers topics such as the history of Bitcoin, the Bitcoin blockchain, and Bitcoin buying, selling, and mining.

It also answers how payments are made and how transactions are kept secure.

Other cryptocurrencies and cryptocurrency pricing are examined, answering how one puts a value on cryptocurrencies and digital tokens.

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