Welcome to the endgame of Always Late(tm) Inventory.<p>Since everybody has beaten any excess capacity out of their systems, nobody is in danger from competitors, and <i>everybody</i> can raise prices.<p>What are you going to do? Switch to somebody else? They only have 10% excess capacity, at best, and will take <i>years</i> to spin up anything extra because nobody higher in the supply chain has any excess either. And, if you threaten us and piss us off, you'll be completely screwed as we'll drop you <i>completely</i> since there are other customers who would be happy could take our capacity. Your competitor may not be able to knife you, but your suppliers sure can.<p>And nobody is going to build capacity because that takes money <i>immediately</i> for an uncertain return in the <i>future</i>. See: industrial toilet paper and Covid shortages<p>Buckle up. The ride is gonna be bumpy.
Inflation is actually inevitable not just because of limited production capacity but also because of limited storage capacity of the economy.<p>For some reason people got this weird idea that the economy will store an infinite quantity of capital. They probably got this mistaken impression from the fact that cash has a guaranteed zero percent interest rate. But since actual capital (food counts as capital for example) spoils in the real world the amount of capital that was produced starts diverging from the amount of financial capital that grants you the right to buy physical capital and this is how you end up with this eternally creeping inflation but that also explains why in a properly managed economy, the inflation rate is expected to be very low around 2%.
It really is just the money printing. If you remove that single element, any localised perceived prices rises are not "inflation" but is monetary dynamics at work restructuring information for resources allocation to capital accumulators/ wealth generators. This signal is made noisy by money printing and the purchasing power of the unit drops rather than increases (despite what happens to prices locally or globally in the system).