The problem with your accurate assessment is as I said there will be no change in government spending so the free market we have is the main way price shocks revert. FED's artificial inputs can cause a quicker timeline but U.S. will never stop subsidizing or spending.
You actually make pretty valid points, good for you, buuuuuuuut the counter to your government spending is look at something like the TVA. The TVA created economic activity and production in areas of this country that were completely ignored by private industry. We still subsidize energy production in America because it makes sense for broad economic growth. Which brings up another point all the virtues of America are not encompassed in economic outputs. It’s important to remember a country is populated by people not factories or firms. Quality of life matters too. As to increasing government spending as a percent of gdp, minus social security and Medicare it looks much different. As a matter of fact actual investments into things like education has fallen off of a cliff. We argue that the cost of college has gotten out of control but ignore that investment through support for education and direct funding actually decreased as a percentage. My point is we don’t want to be so pro free market to the point of stupidity. We want the south and Midwest to have electricity and roads. We want an educated population. The return on these investments can far exceed the investment, even if through debt.
We are not necessarily in disagreement about all Government spending. TVA, Hoover Dam, and the Interstate roadway system are examples for Government projects increasing economic growth potential and raising the standard of living for many. I took the time to define “Inefficient Government spending” by providing examples. I see energy security as economic security and defense preparedness. Recent events in Europe highlight these points immensely. To add, the way nuclear is done in the US seems grossly inefficient by design in order to avoid the creation of a surplus of energy to the benefit of special interests, notably oil companies, to the detriment of almost every one else. Perhaps a system of Government owned nuclear power plants could be built with rates maintained at levels that do not provide excessive competitive stress to oil producers while providing a reasonable return on taxpayer investment. The nuclear fuel cycle from enrichment to energy production to waste storage seems grossly inefficient when one visualizes each step of the processes involved. In effect, much of nuclear waste is simply energy being thrown away, especially as our nuclear processing capabilities improve and costs of energy alternatives increase. A bright future is there for the taking. For all of us. Anyone interested?
Like Gartman and Jim Cramer for financial markets, Warren is a good contra-indicator and you'd be wise to implement policy in the exact opposite of what she claims we should do.
Food CPI is still horrible and I dont see food prices crashing any time soon... But freight rates from Asia are collapsing at a really fast rate. In one year we went from Asia - Houston of $20,000 to $7500/40'. West Coast has collapsed by a similar magnitude. Inland trucking rates are still rapey but as the surge of cargo moving from ports to warehouses has slowed since inventories are backing up the trucking rates should start backing off. Logistics is a huge chunk of the inflationary action in imported goods and raw materials and internally transported goods. There are still issues with chips leading to continued inflation in cars and other products dependent on chips. Food prices are still very high and since we all got to eat, I dont see that changing too fast. The large oil tanker called inflation is starting to reduce the speed but like all oil tankers going full speed ahaead turning down the engines, they are going to glide with forward momentum for quite some time before slowing down. Xmas presents in general will be cheaper but we are spending more on food but we are also still making more money. That means the acceleration is reduced but the not reversed.
There is no doubt in my mind that companies will continue high prices for a lot longer than high costs will ensue. But also freight rate collapses affect the price of imported goods. Inland trucking rates and labor costs are still high so food will still be expensive because it is not imported on containers.