What happens when prices keep rising but wages don't keep up? Prices stop rising. Look back over the last 40 years and you'll see the same pattern. Inflation s

What happens when prices keep rising but wages don't keep up? Prices stop rising. Look back over the last 40 years and you'll see the same pattern. Inflation spikes are sharp but short. In the last few decades, inflation spikes tend to be followed by deep recessions as well. For example, in 2008, the rip-roaring CPI print of 5% seemed very menacing. Few suspected that an honest to god financial panic was right around the corner. For further evidence, consider the financial and commodity markets: - the eurodollar futures market recently inverted - the 30 year treasury is yielding -5% in real terms - the dollar is not crashing in the face of rising CPI, as the popular wisdom says it must - instead the dollar has been rising for a year - gold, the eternal inflation hedge, has gone nowhere in one year and is at the same place it was 10 years ago All of these indicators point to lower inflation and lower growth ahead. Possibly much lower.