The confirmation by Istat on the record increase in inflation, with data not seen since 1991, alarms – and not a little – the Italians.Gabriele Pinosa, financial markets analyst and president of GoSpa Consulting, somehow we expected it but reading the data in black and white (a jump of almost 7 percent), was painful. How long it was in the air
For several years, at least a decade. It certainly does not depend exclusively on the Russia-Ukraine war or the two-year pandemic. These are the “road accidents” that occur in the history of the economy, but which are grafted onto a road that had already been marked decades ago, after the fall of the Berlin Wall. For too long there have been various elements that have added together and that will continue to have their effects on the pockets of almost all citizens. But exactly what is inflation
I first answer you with a sentence from the late Ugo Tognazzi: “It’s like having a lot of money in your pocket and being poor”. Put simply, it is the loss of the purchasing power of money. It is not always a negative phenomenon, if it is within a certain amount, just think that the Central Banks have always had as target the containment of inflation growth by 2%: in that case it translates into a strong growth of the economy and in a steady increase in demand. So when and what becomes worrying
I answer you with an example known in the world of economics: inflation is like a tiger. As long as you keep it in a cage, you manage it. But when it comes out, the damage becomes serious. The “inflation” tiger then came out of the cage
Yes. Here, too, I’ll give you another example that makes you understand well: imagine squeezing ketchup from a bottle. Sometimes it freezes, nothing comes out. Then it all explodes together and overflows. The bottleneck no longer holds, in a sense the final squeeze was given by the combination of pandemic plus war between Russia and Ukraine. In times of pandemic, the governments of many countries have implemented a series of incentives and tax reliefs to get out of the quagmire that was being created, I am talking about incentives, family allowances and more. In this way, even more demand was created but, on the other hand, the supply struggled. This too weighed on the release of the famous “ketchup” that flooded the plate. The Russian – Ukrainian conflict gave the final push. But they are, in fact, accidents of a path dotted with many planets that have aligned.Different contributing causes, for this we are talking about economic elements
And for how long

Yes. Notwithstanding that no one has the power to accurately predict the future, I believe that it will take at least 24/36 months to see inflation fall again. The twenties of this century will be remembered for this economic crisis and for the tools put in place to get out of it. We will therefore fight with inflation this high for a long time. But what are these famous economic elements
There are basically five. The first concerns the end of hyper-globalization, an element that we must take note of. Relocation no longer works, it has manifested its limits definitively in the last two years. I don’t think we will go back to an autarkic economy, but we will go back to bringing the production of raw materials and semi-finished products as close as possible. Supply chains must be shortened. The second and the third
One is the energy transaction. Switching from fossil sources to renewable energy sources has a high cost, as well as technical times. The recent COP26 had warned us about this. The war has fundamentally accentuated the process and, as Minister Cingolani said in 2021, “The transaction is not a free meal”. The third element is linked to this: the climatic upheaval (which brings with it the geopolitical one). An example: greater drought equals greater problems in agricultural production equals problems for the supply to our supermarkets. The cost of raw materials also rises here and, with them, of semi-finished products. The last two economic factors that are causing this inflation to explode in our hands
The arrival of new major global consumer players: India and China. Countries where the so-called middle class is increasing and, with it, the consumption of non-primary goods. If even only a third of them wanted to have, let’s assume, the latest cell phone, the computer or the direct home service of what they order online, let’s imagine how much demand will affect supply and, therefore, production.
The fifth, but not least, is that particular game that sees inflation as the solution to part of the public debt on which every single country sits. The whole world sits on a mountain of debt. Who will pay
it? It is not known. But a solution could be that in the economic system, inflation erodes the debt through the so-called financial repression.Give me an example to better understand …
Let’s assume that you lend me a thousand euros with the condition that in a year I will have to give you 1100 back. But within a year, inflation will run more than the debt I have with you. When I give you back those 1100, the one hundred euros of interest will have less value than when you lent it to me, you buy less things from us. There are those who draw parallels with the energy crisis of the seventies, those who speak of rationing. What do you think
? We can use the word stagflation as in the seventies
I would say yes. But this is a profoundly different period in terms of goods and consumption, we cannot make a comparison with a society in which we are used to receiving a good now for tomorrow by ordering it online and produced tens of thousands of kilometers away. We have too different habits and lifestyles compared to almost 50 years ago. But the “rationing” yes, somehow there will be. To pay the bills (which have doubled in the last year), the Italians will necessarily have to cut more. We will have something to eat, perhaps paying a little more. I fear foodstuffs will become more of a problem for countries like Egypt (which largely depends on the import of Russian or Ukrainian wheat) or other developing countries.Trying to see beyond the current worrying data, in some way we will be able to witness the birth of a new way of thinking and doing the economy
. Yes, I would say yes. The fact that inflation has been considered “dead” for all these years, since 1996, has not been a good thing, given the explosion that followed. The hyper-globalization could not have resisted any longer. New modalities are envisaged at the end of this path.

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