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“…as it does not erase the reality of this “loneliness economy” we experience in modern times, nor does it seize the factuality that our world (and the financial events that uphold it) is, and always will be unstable.”

The above phrase was included in the recent qualitative analysis by AAATrade, regarding The source of inflation, and a Minskian dilemma, and its application has been adequately seen by the world markets’ inflation movement in the past month.

It had also been observed by AAATrade’s analysts that, in the Western world, there was the looming certainty of increased inflation, with inflation being the rate of increase in prices over a given period of time and could potentially entail that the real value of money would lose on their purchasing power, impacting its financial integrity.

Additionally, a recent paper by the European Central Bank further decoded the future of inflation by drawing attention to the matter of global warming, which is expected to be the cause of continuous food inflation in combination with the pressurized effect of global incomes by the rising prices, which might potentially impact inflation expectations; thus, pointing out the need for the intervention of Monetary Policy to combat the matter.

Certainly, inflation in the past few months has borne its ‘fangs’ upon global markets so much that Europe’s politicians have started imposing price caps, to halt the ever-rising food costs, ever since the past month.

Though, theory and current circumstances aside, the global financial industry is currently concerned over the question, “What comes next?”.

Having in mind the current global finance’s procyclicality’s propensity, when one detaches themselves from the dilemma of ‘ what is the source of the inflation currently affecting the globe’, they would find themselves pondering over the implications of the remedies done to combat said inflation.

Before delving into the above, a brief sidenote needs to be added, in order to emphasize that, even though there are the aforementioned fears that inflation will be increased on a global scale, all whilst the EU sees its oils and fats rising up to 23% in their price by March 2023 and falling slightly in May, on paper, the Eurozone’s inflation is said to have fallen to 6.1% - with inflation in Spain falling even to 2.9%-; raising alarms as to the instability between theory and generality, and practicability as well as specificity.

To add up to the above concern, there is the fact that Investors are not confident that global interests have peaked and that they are soon to begin their downtrend to consider, whilst there is the general consensus that inflation is not driven by global wages.

With the above prologue, it is proper to proceed in the following commentary on the remedies to combat inflation and to speculate on what follows the current economic circumstances that plague the globe.

Relating to the EU’s trend of price capping, one should keep in mind that the US government’s debt ought to put extreme pressure on the banks amidst its pending risk of defaulting.

In consideration to the economic state of the US government, it should be explained to readers that it is an observed factuality that the current global high inflation levels have boosted advanced economies’ public finances; though as observed by financial analysts, even though GDP burdens have a tendency to be positively correlated with inflation, hyperinflation has never worked as a debt burden mechanism.

Thus, the economic pathways that the EU and the US have chosen to walk in, would be some interesting research and observation subjects, as one could imagine how price capping and overinflation are not deemed ample solutions to inflation, as governments and their entities should worry for debt as much as they do for inflation.

However, at least for the US case, there are speculations that even though its debt might continue to soar, the implications of its debt situation might have been severely worse, had the government not lifted the debt ceiling – at least in the short-term scenario -.

However, public debt is not the only thing driving the economies currently to having an increased inflation level, as the ‘fear of missing out’ on the AI race is perhaps one of the leading causes of the tech sell-off that drags the US stocks lower.

In summary, in this shadowy period where an eerie nothingness aftermath, contrary to the expected banking crisis that seemed imminent by the beginning of March this year, exists, and where there is a silent race to identify the growth stocks in this loneliness economy, whilst the US economy is under pressure and the Eurozone economy seems to be shrinking, inflation is the first and foremost indicator as to the health-state of the world economies.

Therefore, in conclusion, despite the current theory and the future speculation as to the severity of inflation, it is an absolute certainty that this current economic state is not a desirable norm for everyday citizens, and neither it is beneficial.

Concluding, as a leading investment firm, AAATrade, warns its investors and traders to be careful in the dealing of assets during a liquidity crisis. As such, it also encourages them to be educated and well-informed prior to investing in new products/companies. Therefore, we offer a vast variety of products to invest in, that can fit the profit/risk model of the novice and professional clients, as well as the necessary analysis material for them to base their choices on.

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