In response to the latest CPI news, I'm thinking back to periods where CPI was even higher in the USA. The Great Inflation of the early 1980's jumps out as an extended period of super-high CPI. During this period, I have read that the sectors hit hardest were ones that relied heavily on borrowing (eg. manufacturing and construction). This period of time saw a high unemployment rate, a shrinking GDP, and a “stop and go” oscillation of Fed Rate changes.
Are there any good parallels to draw with the current state of the economy? Were there sectors during the Great Inflation that over-performed or under-performed, and is the market at all likely to repeat a similar path? I know that many of the major players and growth stocks of today didn't even exist back then. I also know that nobody holds a “crystal ball”. I'm just hoping for some insights into what successful investment looked like during that timeframe.
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