The ugly reality of inflation has begun to raise its head.
As we have noted previously, inflation is WELL above the Fed’s so-called target of 2%. Indeed, two of the Fed’s own in-house measures of inflation (the NY Fed UIG and Atlanta Fed Sticky Inflation measures) are clocking in at 3.14% and 2.5%, respectively.
That, in of itself, is a REAL problem for the debt-based financial system. Since 2008, the US has added over $9 trillion in public debt along with another $3 trillion in corporate debt, and $1.2 trillion in consumer debt.
ALL OF THIS was based on the assumption that interest rates would stay low.
So much for that. The yield on the 10-Year US Treasury has now spiked to 3%, breaking a 10-year downtrend.
Put simply, for a world that is TOTALLY saturated in debt like the US today, that blue box in the chart below is a MAJOR problem.