I just don't agree that central bankers are going to settle for 4-6% inflation when in the US that has only been the 70s in modern time. Ignoring AI/large language models right now is looking in the rear view mirror. 90% of white collar jobs are either doing a type of natural language translation or baby sitting people doing a type of natural language translation. Anyone with the title of "analyst" in their job is reading something in natural language and then translating those words into something that can be processed. So much of overpaid IT work is taking instructions in natural language and translating the instructions to a language to be executed by a machine. IT itself has practically become an inflationary drag on business with having to pay these overinflated salaries for people to work 10 hours a week in between twitter rants. Sending a huge % of those people to the unemployment line is going to be massively disinflationary. To think we are completely done with the disinflationary effects of technology is just not thinking this through IMO. What we have right now is a massive dislocation in over investment in IT and white collar bullshit jobs but the real AI cavalry is coming to reset IT back to something actually massively productive and disinflationary.
I think the "dead wood" in American IT is just a reflection the massive distortion in international trade caused by the U.S. Dollar as the reserve currency. U.S. economy gets a free ride as other sovereigns trade in dollars. It's a legacy system. Foreign sovereigns are looking for alternatives, probably arriving soon. *** I don't know about deflation/disinflation, whatever. I think the tug of war that is going on is about the franchise of "marcantilism", and who is going to run that. The Chinese model heavily leans on mercantilism. Chicoms have made large relationships esp in Africa. It's about raw materials, who can get them, then add value in the manufacturing process. Kind of like what America had with Britain in the 18th Century. Americans hated it, fought the Revolution over this (and other things).
Americans replaced a 2% tea tax with 39% Federal plus state taxes! If you want back into the United Kingdom we will think about it.
An important opinion. Thank you. Opinion about the future, however, even one so well-informed as Napier's, can not answer with certainty whether we are in an unusual period, caused by a confluence of economic shocks and complicated by rapidly shifting relations among global powers that will eventually moderate and return to the old normal, or is this a new normal for the foreseeable future? Napier believes it is the latter, and that excessive debt ---public and private --- is an underlying driving force. He makes cogent arguments, and I am inclined to think he is right. Caution, nevertheless, reminds me of what Yogi Berra said: "Prediction is difficult, especially about the future."