Factors putting upward pressure on commodity prices:
1. China is switching emphasis to "dual circulation," that is, focusing on domestic consumption in addition to exports. This increases domestic demand. In addition, as decolonization proceeds globally and the emerging world begins to increase domestic consumption generally, commodities in limited supply will increase in price.
2. Dc-carbonization will involve a shift in energy sources and also affect energy prices. Coal has been a relatively inexpensive energy source and it is on the way out.
3. The increasingly precarious international situation is also increasing the military share of commodities as a new arms race develops.
4. A lot of the low hanging fruit has already been picked and more resources are increasingly required per unit of output.
The handwriting is on the wall. The culprit is consumerism amplified by manufactured wants through marketing and advertising. The whole world cannot consume at the level of the presently developed countries but that is the aspiration without drastically affecting the world system with respect to both resource availability and negative externalities. But consumerism is what contemporary capitalism is based on. Something has to give somewhere.
Although most contemporary inflation has been a result of cost-push rather than demand pull, it will be popularly attributed to "too much money chasing to few goods," with consequent calls for fiscal austerity by reducing expenditure and fiscal deficits to address it. Good luck with that.
We aren't there yet by a long shot but it is something to begin watching. GS is apparently not yet concerned, nor is the Fed. The Fed has not even begun to raise the interest rate from rock bottom. The Fed still assumes a central bank has the ability of to address inflation by raising interest rates—as do most conventional economists—even though MMT explains otherwise. So the thinking appears to be that inflationary pressure is not a problem yet.
Anyway, while there are still many screaming about the "unsustainable" fiscal deficit, the emphasis has shifted largely to concern with "inflation," the conception of which is quite different across the board. So reactions are somewhat irrational based on these assumptions.
The major issue to be aware of now is that rising prices are due to supply shortage rather than "too much money chasing too few goods," so the measures to address this issue have to be designed accordingly. The bottom line is that eventually consumerism has to moderate or the population of the world has to decrease. Another solution proposed by some is to prevent the emerging world from emerging and creating increasing demand for scarce resources, based on "we got here first."
