The news if filled with so-called experts saying we are heading into a period of high inflation while others say the increases are due to shortages and therefore transitory. The latter is the most likely but the food inflation is going to get much worse.

            Pictures of thousands of vehicles parked bumper to bumper and door to door on parking lots and fields are because of the chip shortage. When dealers get a new care with a chip, they don’t need to negotiate a price. It may be sold before it arrives. Since few cars are coming to the dealers, used cars are in greater demand exploding their price. When chips become available the prices of new and used will fall.

            Most other items are in temporarily short supply due to the sudden surge in demand. Supply chains are still being disrupted by Covid and lack of materials. As the transportation and supply chains become efficient prices will drop.

            Food is another matter. Global warming is now and will, in the foreseeable future, have a huge impact on food production. The Colorado River irrigates millions of acres of farmland which will shortly become useless. Thousands of farmers didn’t plant many of the vegetables we eat. Fruit and nut trees will die from lack of water. Water is being withheld from hay fields that feed the dairy and beef cattle. The lack of rain and grass and hay means the Texas and Oklahoma ranches are going to cull their herds. That will flood the market in short term and raise them in the long term. Droughts and floods in other areas will create shortages and raise prices of those products.

            The future will have much price instability as the economy tries to absorb all the influences and instabilities with the effect of climate change on the world and increasing populations.