@eric just noted that US inflation just hit a 13-year high. That is certainly notable.

But let's consider both sides of the argument. Here's my rebuttal in defense of deflation.

(Shoutout to Cathie Wood- as this is my interpretation of her perspective on the market)

Inflation may be a big problem in emerging market currencies and especially in unstable regimes. But in the US inflation isn't something to worry about because of three different sources of deflation that will combine to overshadow the inflation we are seeing.

Those three sources of deflation are:

1) Cyclical deflation. Commodities will go through a period of significant weakness during the next 6-9 months.

2) Innovation platforms are moving into the sweet spots of adoption S-curves and will generate explosive growth. New technologies making things faster, cheaper, and better will cause deflation.

3) Pricing power of many companies will diminish because they have leveraged up for profits now as opposed to sacrificing short term profitability in order to invest in innovation. These companies will be in trouble and the loss of pricing power will cause deflation.

So now you have both sides to consider.

Which will win out, inflation, or deflation?

What say you?