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Commodity price inflation is inextricably linked to sovereign debt and monetary expansion, as this chart clearly intimates. Over the past century, despite world wars and a great depression, things only came fully unglued when the currency was removed from all gold backing in 1971. The preceding decades of events surely set the stage for that, from the founding of the Federal Reserve to the war and entitlement spending, but only the repudiation of an honest foundation for the currency, i.e. going completely fiat, precipitated the subsequent turmoil.

It's also clear from this ten thousand foot view that the only thing which has held the monetary system together over the past few decades has been "petrodollar hegemony" and the liquidation of the world's central bank gold reserves. The period from about 1980 - 2003 is the time during which the U.S. Dollar was de-facto backed by oil by way of our supporting military dictatorships in the Middle East in exchange for their denominating all oil transactions in dollars. You can see how the debt was able to expand without requiring monetization as a result of central banks worldwide buying Treasury bonds. The reason we went to war in 2003 is because Saddam had indicated his intention to switch oil sales to Euros, which had just begun circulating in 2002. The result of the war was the end of virtually all Iraqi oil sales entirely, which cut off the Dollar backing in that case. In the meantime, most other oil exporters began denominating in multiple currencies, including the Euro, Renminbi, and Yen. This means that central banks no longer needed to keep large reserves of Dollars in order to import oil anymore, and so most have been slowly dishoarding their Dollar holdings for a greater balance in their reserves, most notably by increasing their holdings of euros. They also stopped dumping gold and in many cases have started buying gold again.

When those two key components unwound at approximately the same time between 2001-2003, inflation and debt absolutely exploded. The Federal Reserve carefully funneled this at first into a global housing bubble. But when that collapsed into the 2008 financial crisis, the Fed was forced to rapidly monetize not only American sovereign debt as a result of new bailouts and stimulus, but all of that debt in the central banks of the world looking to be redeemed simultaneously. Consequently, the Fed printed and distributed over $3 trillion (more than the entire annual U.S. federal budget) to banks around the world in 2008 to defend the Treasury market from collapse. But this instantaneous deferred monetization has created a looming wave of inflation. The present nearly-vertical trend in all four measures above can only be described as terrifying. It is a nightmarish and intractable situation we've gotten ourselves into which will almost certainly end in a hyperinflationary spiral as the value of the currency goes to zero.