For several decades now, the US has pursued the policy of transferring monetary inflation to asset markets, particularly financial assets, while pushing down the share of GDP going to labor income, keeping low. China and immigration helped sustain this policy..
..Can this game go on for another decade? India has the demographic heft (twice as many babies a year as China!) to contribute to both emigration to the US and being the factory for the world. That is the path of least resistance for the US and India. But India is not China..
..Keeping labor income suppressed is much harder in a democracy. What Indians call the politics of freebies (to give one example) is a transfer of income to the people and those dominate elections. The US has already discovered too. All these point to inflation..
..So we must prepare for a long period of inflation ahead in the US, with the running full tilt. Inflation is also the path of least resistance to resolve the extreme , particularly among the . So inflation it will be. UK shows the way.