What caused the worldwide spike in inflation in 2022? In a detailed study headed up by Peter Orszag (now CEO of Lazard, but formerly head of the Office of Management and Budget and the Congressional Budget Office) they found that it was mostly due to quirky supply chain disruptions and housing and accommodation price spikes. The latter were caused by elevated demand as so many people worked from home. Read more about the study here.

"Supply-chain variables directly accounted for 79 percent of the rise in underlying inflation in 2021. These effects then continued into 2022, with ongoing supply issues directly explaining 60 percent of the rise in inflation that year. All of which leaves only a modest role for demand-driven effects like the Covid stimulus package."

The good thing is that these problems have now been ironed out, life is back to normal, and inflation is rapidly becoming just another boring topic for statisticians to monitor.

Put differently, the inflation spike was indeed transitory, but it took a long time to go away. For investors, patience remains a key virtue.

I like talking to clients, friends and peers about their work. It's good to be curious because you get to learn a lot of new things. Most people are happy to talk about what they do, and showing interest in that is good for forming meaningful relationships.

I must say, I am picking up very positive vibes about the South African business environment at the moment. Whether it's entrepreneurs or corporates, most of the conversations I have been having suggest that business is good.

The national election outcome in May was positive, we have had no loadshedding, interest rates are heading down, the Rand has been stable and the general global economic environment is looking good.

I am a glass-half-full kind of guy, so maybe I am being too optimistic, but I get the feeling economic growth in this country is going surprise to the upside this year and next.

There is talk that the South African Reserve Bank wants to shift its inflation target from an effective 4.5% to 3%. I think this is an amazing idea! For a detailed breakdown of the plan, you can read this Business Day article - We have a window, with inflation and inflation expectations falling rapidly, to lower the inflation target to 3%. If you don't have a subscription, it's only R129 a month. Paying for journalism ensures the industry survives.

A key thing to understand about inflation is that our expectations about future price increases are usually the primary cause of inflation. For example, at salary reviews, people generally assume that a 6% raise is needed just to keep up with inflation. For many years, South Africa's inflation target was effectively 6%. A change in target will mean a change in people's expectations.

According to the article, Lesetja Kganyago, the SARB Governor, makes the following argument. In 2000, both Chile and South Africa adopted inflation targets. Chile went for 3%; we went for a range of 3% to 6%. Since then, our average inflation rate has been close to 6%, while Chilean inflation has been a bit under 4%. The upshot is that Chile's prices are now 2.8 times what they were in 2000, while ours are 4.5 times higher.

What does lower inflation mean? It results in lower interest rates, which are a massive boost to an economy. It could mean the post-Covid, historically low rates of 7% prime, would become the norm.

This opportunity to lower our inflation target won't last forever. If we don't take the gap now, we might have to wait another decade before it is a viable option again. I hope the government agrees.

Battery technology is advancing at a rapid pace. Lithium-ion batteries have ruled for decades - Now they have a challenger: sodium-ion.

Louis Vuitton is renovating its Fifth Avenue shop in midtown Manhattan. The stylish scaffolding around the site has turned into a tourist attraction - A 15-story stack of six Louis Vuitton trunks.

Asian markets are higher today, taking their lead from the positive move in the US. The US Dollar weakened, which helped to boost developing market equities.

Telkom shares were up 4.6% on strong numbers for their last six months. Revenue was up only 1.9% and profits were down 1.8% but the results included R160 million in restructuring costs and a R618 million charge for switching the Telkom Retirement Fund from a defined benefit to a defined contribution scheme. Telecoms is a tough industry!

US futures are pointing towards another green open this afternoon. Thanks to a weaker dollar, our exchange rate is currently $/R17.91.

Goodbye from a sunny Johannesburg.