THE strength of the global economy is one reason why the stockmarket has started 2018 in a buoyant mood (with the Dow passing 25,000). At some point, in any expansion, businesses find it harder to recruit workers or get the materials they need; these bottlenecks cause wages and prices to rise. Central banks then start…

via Where did the inflation go? — Business and finance

The thing about inflation is it isn’t there until it is.

Wage pressure is what scares me. There is a shortage of labor cropping up all over the place, and it has been somewhat stealth because companies are coming up with creative ways not to just concede “we need to raise wages to attract employees.” Ask Walmart. Ask the homebuilders. Look at some of these $1,000 bonus companies. Demographics say it is only going to get worse. And those higher wages, combined with what companies are forced to do to support those wages, those are the seeds for inflation.

When? Who knows. And maybe structural issues will prevent real issues. But be short the conventional wisdom that states inflation is dead. The more people who believe that, the more certain I am inflation will eventually be there.