President Biden has argued the key culprit is Russian President Vladimir Putin and his war in Ukraine, going so far as to call the current rise in U.S. consumer prices “Putin’s price hike.”
On the other hand, Federal Reserve Chairman Jerome Powell says that high inflation is a result of the toxic combination of supply chain issues brought about by the pandemic, COVID-19 lockdowns in China, the war in Ukraine, and the strong labor market.
But Edward Chancellor, a financial historian, journalist, and investment strategist who has been described as “one of the great financial writers of our era,” argues central bankers are to blame. In his view, central banks’ unsustainable policies have created an “everything bubble,” leaving the global economy with an inflation “hangover.”
Chancellor explained his theory, which is presented in his new book, The Price of Time: The Real Story of Interest, in a recent interview with The Market’s Mark Dittli.
“There’s always the idea that speculative bubbles are formed around the invention of a new technology,” he said. “What I’m doing in my book is leaving aside the tech aspects and the psychological aspects of bubbles, and concentrating solely on the monetary underpinnings. What I argue is that when interest rates are pushed down too low, people are driven into speculative endeavors and chase returns.”