TITLE:
Five Commodities Perfectly Predict Inflation
AUTHORS:
Gordon Bechtel
KEYWORDS:
Federal Reserve, Consumer Price Index, Endemicity, Trans-Century Inflation, Quadratic-Fractional-Polynomial (Q-F-P) Regression, Paul Adolph Volcker Jr.
JOURNAL NAME:
Modern Economy,
Vol.14 No.1,
January
31,
2023
ABSTRACT: In 2014 the renowned Arundhati Roy (2014) described
capitalism as a zombie economy. Eight years later economists and stock market
traders railed about the American Federal Reserve’s delay in raising interest
rates to stave off “the worst inflation in 100 years”. The present article
confronts these assertions by suggesting that inflation, may be an endemic and
uncontrollable phenomenon, wreaking havoc upon a nation due to exogenous
causes. This hypothesis is supported by our demonstration that inflation from the period 1991-2017 occurred before breaking
out of control in 2022 and before the Covid19 pandemic and Ukraine
war. We pursue this hypothesis by quadratically regressing the American
Consumer Price Index on the prices of three foods, shelter, and gold, returning
an R2 = 0.999, showing that the prices of these five commodities
account for all inflation. Our method and findings generalize beyond
inflation and commodities to all social and data-science variates.