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Supply-chain crunch set to ease, the world is short of everything, and Bitcoin’s fair value. Outlook The global supply-chain crisis has been [View in browser]( [Bloomberg]( Supply-chain crunch set to ease, the world is short of everything, and Bitcoin’s fair value. Outlook The global supply-chain crisis has been one of the [biggest drivers]( of [consumer prices]( in the last year. While central banks around the world are [shifting policy]( to try to cool the rise in inflation, there are signs from shipping companies and corporate results that the bottlenecks may start easing. A.P. Moller-Maersk A/S, which handles almost one-fifth of global sea-borne container traffic, signaled disruptions may be [just months from ending]( with [consumer staple]( and [luxury goods makers]( seeing improvements throughout 2022. Commodities The other side of the equation feeding into rising prices is the multi-year highs in a range of commodities. Futures contracts show the highest number [trading in backwardation]( — a market structure that indicates scarcity — since at least 1997. “We’re out of everything,” Goldman Sachs Group Inc. analyst Jeff Currie said in a Bloomberg Television interview. While oil, [threatening to hit $100 a barrel](, has been the poster-child for the rise, everything from [base metals]( to [agricultural products]( are soaring. China’s government has recently stepped up efforts to control [the price of coal]( [and iron]( amid the surge. Valuing Bitcoin JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou has looked at the volatility of Bitcoin compared to gold and used that analysis to put the “[fair value](” on the largest cryptocurrency at $38,000. Bitcoin traded [below that level last week](, but has since rallied to above $43,000. Technical analysis points to the currency [building on its six-day rally]( from the recent lows. Traders see $45,000 as the [key level]( for the currency to test if the rally is to be sustained. Markets rise The selloff in bonds has taken a break which is giving stocks a chance to rally as corporate earnings season rumbles on. Overnight the MSCI Asia Pacific Index climbed 1.5% while Japan’s Topix index closed with a 0.9% gain. In Europe the Stoxx 600 Index was 1.5% higher by 5:50 a.m. Eastern Time in a broad-based rally. S&P 500 futures pointed to [plenty of green at the open](, the 10-year Treasury yield was at 1.931%, oil was under [$89 a barrel]( and gold rose. Coming up... U.S. December wholesale inventories data is at 10:00 a.m. Crude stockpiles numbers are published at 10:30 a.m. and the USDA’s WASDE report is released at 12:00 p.m. The U.S. sells $37 billion 10-year notes at 1:00 p.m. Fed Governor Michelle Bowman and Cleveland Fed President Loretta Mester speak later. Walt Disney Co., Fox Corp., Yum! Brands Inc., Equifax Inc. and Uber Technologies Inc. are among the many companies reporting results. What we've been reading Here's what caught our eye over the last 24 hours. - It’s all about the quiet [selloff in corporate credit]( now. - “[Crocodile of Wall Street](” arrested in Bitcoin scandal made for crypto era. - 100 million Americans can [legally bet on the Super Bowl](. - Canada’s truck driver protest appears to be [short of trucks](. - Investors seek profits by [helping poor people]( sue big companies. - How much lithium will the world have? It depends on [who you ask](. - Riding a [laser to Mars](. And finally, here’s what Joe’s interested in this morning Hello and happy CPI Day Eve. Tomorrow we get the January CPI data. And these days, CPI Day is bigger than Jobs Day, given the salience of inflation to the Fed, the market, the public, and politics. Economists expect the headline YOY inflation rate to accelerate from 7.0% to 7.3%. But we can talk more about that tomorrow and the next day. In the meantime, I want to talk about something more theoretical. It seems to have become totally accepted by the mainstream that the elevated inflation we're seeing in the U.S. is per se evidence that U.S. fiscal stimulus was too much. There doesn't seem to be much debate about this point, about possible other causes (such as supply chain disruptions, or other Covid-related capacity constraints). Everybody says it was about a fiscal overshoot. Of course we don't have a counterfactual situation, where Biden didn't win and send out another round of checks, so there's no way to be certain. The most powerful "evidence" of the assertion is that Europe didn't do this latter round of stimulus, and their inflation is a bit less, though it's still very high. All that being said, it's not that obvious if you look at the actual sectors driving inflation, that it bears the fingerprints of Big Fiscal. [My colleague Matt Boesler posted this chart](, showing how various categories have moved since pre-pandemic. The numbers raise a few questions. Let's start with food. It's hard to connect food inflation to too much demand as a result of fiscal. Unless we're to assume that people are eating a lot more than they were pre-pandemic? Doubtful. Same with energy. Are people driving or heating their homes a lot more than they were pre-pandemic, as a result of fiscal expansion? Seems unlikely. The other biggie, obviously, is used cars and trucks, which have gone insane, in part due to the chip shortages, the diminished production capacity of new cars, and the aggressive buying of rental car companies, which liquidated their fleets during the acute phase of the crisis. On the other hand, we see that shelter inflation has not accelerated from pre-crisis levels (though it seems likely it has a lot more to go). Meanwhile, other items and Core CPI are up, but hardly to such an extent that we need to get our fainting couches out. Anyway, none of this is to deny that inflation is hot right now, and it's undesirable. But the evidence that it's necessarily the result of overly aggressive fiscal stimulus feels pretty thin, when you look at the actual categories driving up the headline. Even if you don't really believe in "supply chain" disruptions, as such, it seems plausible that we're seeing the strain on an economy that's rapidly returning to normal, [but which has certain speed limits when it comes to normalization](. It also seems possible that we're seeing strains, not due to too much aggregate demand overall, but rather a sharp change in the composition of demand to more goods, which has the effect of taxing the ports and the transportation system, which then feeds into consumer prices. What we know is that we've had an extremely fast recovery that almost nobody predicted a year and a half ago, or even a year go. We also know that we have the highest inflation in several decades. While it's true that the fiscal expansion was unusually large, it's also true that literally everything about the last two years economically has been historically unusual. It certainly seems premature to pin the blame for inflation on a fiscal policy mistake. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. 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