I will add one final thought. Go back to when Ben Bernanke tried raising interest rates. Remember the taper tantrum? Do you really believe this time will be any different?

It does also come down to the circulation of money and the velocity of money for inflation to show up in pricing, but often times people mix up the symptoms and effects of inflation and deflation (like the prices of goods or services) with the terms themselves. Simply put, an increase in the money supply is by definition inflationary, and for there to be true deflation then there must be a decrease in the money supply.
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Often times financial pundits and the main stream media conflates a stock market correction, or an inflationary depression or recession, or just a rising dollar as “deflation” which is not wholly accurate.
Others say automation and labor efficiency can be deflationary, which is somewhat true, but those are not the same thing as deflation. As mentioned earlier up above, and many times in interviews lately, a
falling rate of inflation is not “deflation” either, as it is disinflation. This is important because is simply means there is inflation but just not as high as the previous readings. It isn’t deflationary until it gets to 0% inflation and then heads negative inflation rates. So again, deflation is often touted, but most ways it is used are either with disinflation, a stock market correction, or recession and none of those are ture deflation. Real deflation is very rare.
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Also many economic pundits incorrectly assume that if there is an increase in the money supply, that there should be an immediate effect on prices rising, but that isn’t how things work, and there is often a delay for things to work there way through the system. Inflation can show in other financial assets or real estate or services before it finally shows up in commodities or cost inputs on goods.
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For example, people point to all the QE money created since 2009 to present and say erroneous things like “there was no inflation for the last decade after all that money printing until this year in 2021, and that was just due to supply chain issues.” That is completely wrongo in the congo on many levels, and is a misunderstanding of inflation, and that prices are merely a symptom, as our rising wages, or higher energy costs.
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There was PLENTY of inflation in asset prices from the general stock markets, to collectibles, to real estate for the last decade despite the BS government metrics in how they calculate the CPI. There was also plenty of rising inflation in the cost of services like healthcare, senior care, college tuition, insurance, landscaping or also in events like concerts, plays, sporting events for the last decade. Anyone following John Williams work at Shadowstats for the last decade knows how bogus the accepted narrative around inflation metrics has been for a long time, and how the method of calculating inflation warps and massages down the true inflation impacts on everyday people’s lives.
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To your point though, since the banks were not lending it out to individuals or small businesses at a higher velocity, most of the new money creation stayed in closer semi-closed loops in the financial markets, and didn’t really seep out into every day life quite as much. The difference with the huge stimulus bills, helicopter money to everyday citizens and all the PPP Loans to small businesses (which often used those funds for reasons other than what was intended), we saw more velocity and circulation of money, and there were dollars chasing the same amount (or less) of goods & services which became so large it finally registered in the CPI readings.
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As far as when Bernanke started hiking rates last time, I’m in complete agreement that the market will eventually hit a pain point and have another tantrum, and that the precious metals will get a bid in a “buy the news” fashion, just like the many other times central banks have decided to hike rates.
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The key is that tapering and tightening are 2 totally different things, and we are getting a lot of confused economists saying things like tapering is tightening…. it isn’t. Tightening is hiking rates, so not until the Fed starts hiking the Fed Funds rates is there any tightening going on or anything “hawkish.” As for the tapering, is should be mentioned that all that means is the Fed is buying less bonds than previously, but all buying of bonds under the “emergency” quantitative easing, is still easy money and “dovish.” Not until their bond buying goes to $0 have they ceased being as “dovish,” but there is nothing tight about it. Many are incorrectly conflating tapering with hawkish or tightening and that is also completely wrong.
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Now, the “taper tantrum” was the market reaction in 2013 and to a lessor extent the end of 2018 where there was short-lived corrective move in the markets where the Fed even dipped their tow in the water with removing the accommodative buying of bonds. In this case, the taper has been telegraphed for well over a year, and the market is anticipating it with a clear timeline and roadmap. What they are not pricing in at the lofty levels we see currently is how the rate hikes will affect the markets. Maybe the Fed can squeeze off a few 0.25% or 0.50% hikes for a while, but eventually the market will have another tantrum, and the Fed will not want to upset the apple cart and back off it’s policy. Where that tipping point is remains to be seen in latter 2022 or 2023.

John K., OPEC can raise prices arbitrarily but only to a point. The “powers that be” would simply MUCH rather tell the masses that rising oil prices are due to something other than inflation (i.e., the central bank). Yes, there are reasons other than inflation of the money supply for price rises in parts of the economy but such legitimate sources come at the expense of prices in other parts of the economy if there is no monetary inflation. In other words, when the general price level rises it is due to inflation of the money supply and nothing else. In fact (and this is rarely talked about by even the good guys), even a STABLE price level over the last century would have also been the result of monetary inflation since the natural tendency is for prices to FALL due to gains in technology and therefore efficiency. Just look at the TV; it has fallen massively in price despite the fact that the dollar was falling at the same time! Falling prices is part of the payoff for saving sound money but few ever mention it because most wrongly believe that stable prices are the natural tendency. But it is important to understand that money supply inflation doesn’t necessarily instantly or linearly result in price inflation.
If you want to see the truth, price things in gold and pretend that the money substitute USD doesn’t exist. You’ll see that an ounce today is worth about 24 barrels of oil just like it was in 1946. In fact, oil today is cheaper than it was for about 90% of the last 75 years if you strip away the smoke and mirrors provided by inflation and the media and schools who make sure that most never understand it.
Don’t forget that the worst leaders before WWII (FDR, Hitler, Mussolini, Lenin, Stalin) all stole massive amounts of gold (money!) from their people (and others) for a reason.