NEW YORK – At the risk of being banned from Twitter, I suggest that the “transitory inflation” is really persistent inflation, but it identifies as transitory. When everyone can create his/her/zhe’s own identity, why can’t economic data mean whatever people want it to mean?

The scare headline about Thursday’s Producer Price Index release said that the year-on-year jump of 7.7% was the biggest on record. That’s for the PPI “final demand” index, which starts in 2010, long after the horrendous inflation of the 1970s had become a distant memory.

The PPI series for all commodities, though, dates back to 1913. We see from the chart that there were three periods in which the commodities PPI sustained an annual rate of increase of 30% for six months or more. Two of them (1973 and 2007) coincided with spikes in the oil price. Remember that oil jumped to US$140 in 2007 – double its price today.

The two earlier periods of persistent inflation thus reflected a shock from outside the US economy. This time, we’ve had six months of a 30% rate of increase of commodity inflation due to factors inside the US economy. That’s what is really scary.

Everything is going up at once, from transportation services to manufacturing to commodities.

That’s what happens when you try to shove $5 trillion worth of demand through an economy without the supply chains to make the goods and services or the infrastructure to ship them.

Of course, it’s not persistent inflation until the Federal Reserve says it is, and the Federal Reserve won’t, because that would deflate the asset price bubble that the Fed has been nurturing since quantitative easing began a decade ago.

What can’t go on forever, won’t, said the late Herbert Stein, and that applies to the Fed’s “transitory” charade.