China's WTO entry drove 20 years of disinflation — cheap labor, global supply chains, deflationary goods.
Now the US is attempting economic decoupling, reshoring a hollowed-out industrial base, while foreign policy tightens commodity chokepoints — all financed with 7% GDP deficits.
The structural setup has flipped. Onshoring is inflationary. Commodity constraints are inflationary. Massive fiscal deficits are inflationary.
Disinflation was a function of globalization and offshoring. That era is reversing. The idea that inflation just falls back to 2% in this environment requires ignoring the entire policy and geopolitical shift underway.
Now the US is attempting economic decoupling, reshoring a hollowed-out industrial base, while foreign policy tightens commodity chokepoints — all financed with 7% GDP deficits.
The structural setup has flipped. Onshoring is inflationary. Commodity constraints are inflationary. Massive fiscal deficits are inflationary.
Disinflation was a function of globalization and offshoring. That era is reversing. The idea that inflation just falls back to 2% in this environment requires ignoring the entire policy and geopolitical shift underway.