Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Global food prices jumped by 40% in May, the biggest jump in a decade. The year-on-year rise in the food and

agricultural price index was the largest since 2011,

and might be signalling that inflation, which was initially stoked by the pandemic disruption,

is accelerating. The cost of used cars and trucks jumped by 10% month-on-month in April,

and prices were up 21% over a year earlier, making it one of the main

drivers of the 4.2% year-on-year surge in the consumer price index.

Core inflation, which is inflation excluding food and energy prices, hit 3%.

Adding to the confusion is the fact that inflation is measured using a basket of goods and services,

which is meant to represent what people typically purchase.

As the pandemic took hold, people stopped spending on certain items, started spending on others, meaning that the official

calculation of the Consumer Price Index underestimated the price changes the population

experienced in their day-to-day lives over the last year.

If you look around, you can see all sorts of prices soaring. The price of lumber has taken

off and of course the internet

has taken notice. Not even one police escort, a Twitter user commented showing a photo of a lumber

truck driving down the highway. Another showed a photo of a pile of lumber in a doorway

remarking, wow, neighbours just casually flaunting their wealth in the hallway.

Over the year, we've seen a string of surprising shortages and unusual price activity. There was

the great run on toilet paper, negative oil prices, the crypto bull market, meme stock short squeezes,

and even the $100 million dollar deli in New Jersey.

We're seeing price spikes in wages too, but it's not yet clear how that will work out.

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