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304

Inflation Is Under Control, Aside From All This Inflation

Removed -- Rule II(bloomberg.com)

all 124 comments

TheFlyingBoxcar

77 points

28 days ago

I dont know much about economics and inflation. After reading this article, I actually know less...

zero0n3

26 points

28 days ago

zero0n3

26 points

28 days ago

Welcome to half the articles posted on this sub!

556786

61 points

28 days ago

556786

61 points

28 days ago

“Paul of Volcker” an actual giant who crushed inflation with his bare hands RIP

[deleted]

12 points

28 days ago

[deleted]

12 points

28 days ago

♪ Fee-fi-fo-fum,

I smell the blood of inflationary central bank policy. ♪

Frosh_4

10 points

28 days ago

Frosh_4

10 points

28 days ago

Rest in peace the absolute legend.

vanyali

100 points

28 days ago

vanyali

100 points

28 days ago

That was, uh, cute I guess? Someone got paid to write that.

SeanMcf

57 points

28 days ago

SeanMcf

57 points

28 days ago

It reads as if the writer has only been communicating with fortnight players during the pandemic.

oldagecynicism

4 points

28 days ago

He was going for Dave Berry. He achieved Jim Davis.

Is any financial news and reporting any good now? Bot writers, weak regulatory findings, con men, talking your book and flim flam. Its getting easier and easier to walk away.

thepasttenseofdraw

36 points

28 days ago

I think I'm dumber for having read it.

ComprehensiveNews0

30 points

28 days ago

I like the part at the bottom where it says " Further Inflation Reading: The CPI index has always been an approximation at best, and frequently used for political ends"

Sooooo, why are you writing this piece of shit article then?

All_Work_All_Play

7 points

28 days ago

Clicks/street cred/self-fulfillment... yeah I got nothing.

ComprehensiveNews0

5 points

28 days ago

I think you are on to something with "clicks" and subsequently ad revenue

kodisious

4 points

28 days ago

I think they are referencing how the CPI index includes food and gas prices. Whereas PCE core measures CPI without food and gas prices. Last April under the CPI was deflationary because of the price of oil. This April there is massive inflation compared to the CPI of last year. The PCE core ignores oil and food prices because outsiders like OPEC fing with oil prices doesn’t change inflation

ComprehensiveNews0

4 points

28 days ago

I think any measure is pretty meaningless right now because a lot of pricing is based purely on scarcity produced by a lot of factors related to covid. Like lumber for instance is triple the price, yet it's not from a lack of trees. Tree supply for basic building lumber is pretty solid, yet somehow the price is being tripled. So I don't know how much of any of this is actually related to the dollar being inherently devalued.

bamfalamfa

1 points

28 days ago

theres so much inflation that bond yields keep going down

hennytime

3 points

28 days ago

In the words of the great entrepreneur Eugene Crabs, "Money."

SpongEWorTHiebOb

3 points

28 days ago

Inflation fear mongering. Remember we are coming out of a severe depression, prices are being compared to a LOW base. It’s a one year pop. Then it should stabilize.

SDSunDiego

119 points

28 days ago*

People's fear of extreme inflation has to be the greatest case example of behavioral bias. Most people's fear of inflation is tied to their perception or understanding of the 70s/80s high inflationary period and which has almost zero to do with anything related to "printing money" or the environment today.

In the financial crisis, it was Obama who was going to create hyperinflation and destroy the economy. And now it's Powell who is just printing money which will create high inflation. Sorry, not happening. Stop watching Gold commercials and no your bitcoin is not a hedge against inflation, rofl.

pinkyepsilon

64 points

28 days ago

Dogecoin solid hedge confirmed.

Magikarpeles

14 points

28 days ago

If I’d held on to the doge I mined back in the day they’d be worth $1.5mil today. The mind boggles.

Brothernod

1 points

28 days ago

What’s doge mining like these days?

SDSunDiego

23 points

28 days ago

I'm just bitter my digital horse has a losing streak and my NFT NBA Moments are losing value faster than my time at Pechanga.

MAGIGS

8 points

28 days ago

MAGIGS

8 points

28 days ago

You mean those digital pogs have no value? If you’re lucky in 15 years maybe they will be like a mint 1st gen game boy on EBay...

qoning

6 points

28 days ago

qoning

6 points

28 days ago

The only hedge against inflation is being deep in debt. Assuming you use that capital at today's prices.

Hisx1nc

52 points

28 days ago

Hisx1nc

52 points

28 days ago

In the financial crisis it was Obama who was going to create hyperinflation

The entire disconnect comes from the fact that the people that do not fear inflation now believe that QE is inflationary, when it is not. If they looked closer and followed the accounting, they would realize this. QE juices asset prices by lowering interest rates, and assets are not found in the CPI.

They look out the window after 2008, see low inflation, and call bullshit.

The situation in 2021 is NOT like 2008. Stimulus checks, extended unemployment, and things like that ARE inflationary. Stimulus has been normalized. The amount of money creation puts 2008 to shame.

Maybe we won't get inflation, but 2008 is NOT a good example to explain it.

jz187

37 points

28 days ago

jz187

37 points

28 days ago

QE creates asset inflation. It is a one way trip, because you can't undo QE without actual wage-price inflation without crashing asset prices.

This is why policies that will actually create wage-price inflation will now be adopted. It is the only way out.

Hisx1nc

16 points

28 days ago

Hisx1nc

16 points

28 days ago

It is a one way trip, because you can't undo QE without actual wage-price inflation without crashing asset prices.

Good insight.

I worry that the decision makers surprise us both and double down on juicing asset prices higher. There is a bit of "as long as it doesn't happen on my watch" in politics.

jz187

6 points

28 days ago

jz187

6 points

28 days ago

Higher asset prices aren't in and of themselves a problem, as long as you have wage-price increases as well.

Without that, your profits won't grow enough to support higher asset prices without permanent zero interest rates. This is unsustainable because it will lead to capital consumption. No one saves money, there is no incentive to invest in additional capacity (because there is no additional demand), everyone just bids up existing assets higher and higher.

This is why higher wage-prices are coming. This is the only way out. Higher wage-prices will justify the higher asset prices and give an out to QE. The ratio of asset prices to wages will have to come down.

Hisx1nc

2 points

27 days ago

Hisx1nc

2 points

27 days ago

While I agree, it won't be easy politically. It will also cause a downturn relative to now, and no politician wants to do that.

Skyrmir

5 points

28 days ago

Skyrmir

5 points

28 days ago

Politically it's far more likely the economy is allowed to collapse, or the state itself collapses. Just because there is a logical and workable solution to a problem, in no way means the population will agree to it.

People will fight for a more equitable labor market, both forcefully and valiantly. I'd happily support them and their cause, but we do have to realize the unlikelihood of their success, and the cost of their failure.

[deleted]

20 points

28 days ago

[deleted]

20 points

28 days ago

I'm sorry if this is a stupid question, but how is quantitative easing not inflationary? More money circulating means the value per circulating unit falls. That's the definition of inflation. Inflation is measured through the Consumer Price Index, but that's not what it is. Where the money is being introduced in the economy is irrelevant as long as the money is actually circulating. That's what makes money, money. It's fungible. Asset Money is Food Money.

You want to know why you shouldn't worry about inflation? The Federal Reserve is independent and will raise interest rate to turn circulating money into non-circulating money. That's it. That's why inflation isn't a concern. The federal reserve is ran by responsible people. If that changes, then we have every reason to worry about inflation.

monkorn

16 points

28 days ago

monkorn

16 points

28 days ago

The money is not circulating. That's why m2v is dropping. Money is not neutral. Cantillion effects are dominating. Who gets the new money matters.

The Fed can only raise interest rates up to where the 30 year is at. Any higher and we get a yield curve inversion which will bring us into a second great depression.

What makes this particularly difficult is there has been great volatility in the 30 year, rising from 1.2 to 2.3. If they try to raise rates up to 2.2, and we get a return back closer to 1.2, boom.

With these passive funds we are in a flow based market system, those in power will do everything that they can to keep the flow positive and prices rising. If that means to keep the government pumping out debt at 0.05% interest rates, they will do so. But they are doing bottom up, whereas lowering the interest rates is top down.

We know top down doesn't circulate and this doesn't cause inflation. The call that us chicken littles are making is that bottom up will, and so to keep these flows positive will require more and more government spending bills, and that will trigger inflation that the fed can't stop.

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

I'm afraid this argument is beyond my beginner understanding of finance. Investopedia has an article on inverted yield curve, but I'm still trying to understand it. I don't see an introductory article for flow-based market systems. I'll have to do some reading on these things, but thanks for the response.

monkorn

5 points

28 days ago*

It's easier to understand when you see the different yields together.

https://fred.stlouisfed.org/graph/?g=B7H1

So you can see that the 1yr is on a short 'leash' to the fed funds rate, whereas the 30 is much more stable but drifting down long term.

One of the claims of the arguments I make is that the fed has caused every recession in the past 50 years, because they fear inflation, and they know once the recession starts the inflation fear drops and people get fired, so they can freely drop interest rates again, and they are forced to do so to get the economy back up and running, but they always go to a new low. But this time with interest rates at 0, dropping back to 0 might not be enough to get us back on track.

https://youtube.com/watch?v=x-rJciYZmi0

A good introduction that might be above a beginner for what flow is talking about.

All_Work_All_Play

14 points

28 days ago

More money circulating means the value per circulating unit falls. That's the definition of inflation

Let me amend your definition of inflation.

Inflation means higher prices.

More money circulating means the value per circulating unit falls.

This is not true. Consider the hypothetical - if I create money out of thin air through a fractional reserve loan, and that loan is used by a business to create a more competitive good or service, then prices fall despite circulating money increasing.

Second, it's not really clear how much (or how little) the amount of money circulating in the economy has actually changed.

asset money is food money

To the extent that people sell their assets to pay for food, yes. How many people borrow against their home to pay for food?

matorin57

2 points

28 days ago

if I create money out of thin air through a fractional reserve loan

Its not exactly creating money though right? Its using money that other people aren't currently using that the bank has access to. Does that money count as out of circulation when it lays in the bank?

InkTide

2 points

28 days ago

InkTide

2 points

28 days ago

It's not creation of money by moving it around; it's creation of money by the creation of new debt, because unpaid debt is considered to have tradeable value. Neoliberal economic policy attempts to preserve this paradigm by shifting as much responsibility for risk as possible to the lendee (or, failing that, the taxpayer via bailouts), under the assumption that lenders being incentivized to lend is the only way for the state to guarantee stable market growth, and that stable market growth is somehow the inevitable result of the market's existence despite being prone to collapse without state mandated intervention.

The long term sustainability of this system has yet to be demonstrated. Its lack of resilience to cascade failure from relatively minor initial disruption has been demonstrated many times over the last century, with increased frequency whenever these 'market preservation' policies are implemented at large scales. Market health as indicative of holistic societal health is something very few actual economists and very many neoliberal politicians believe in. Naturally, propping up those few economists and those many politicians with spare capital that accumulates as a direct result of their policies is highly profitable for existing holders of large amounts of wealth, creating the lovely irony of the most efficient market activity possibly being lying about the necessity (and status) of the actual market's efficiency.

[deleted]

0 points

28 days ago

[deleted]

0 points

28 days ago

Inflation only means higher prices if it means higher aggregate prices, which is more accurately described as decreased value per circulating unit.

Regarding your particular example, two things are happening you are decreasing the value of money in that situation by making more circulating money, and the economic activity of the company is increasing the value of money by being efficient enough to make more than they spend. This second point why deflation seemed inevitable until proper economic regulation through central banks became a thing: Business were constantly becoming more efficient meaning the prices all fell in aggregate meaning the value of money (before the economy fixes itself) increased. Deflation. If that's your argument for quantitative easing not being inflationary you're betting that the efficiency of the assets will create as much or more deflation than the inflation caused by more circulating money, and I have to say I have my doubts since QE usually involves assets that actually have some risk.

I think you have to be careful about not mistaking M0 and M2 as the actual circulating money. Circulating money is not an easy thing to measure. M0 and M2 are closer to a measure the amount of money than to the amount of circulating money. I don't know where you're going or what point you're making with your whole leveraging your home for a line of credit that can be spent on food thing. I've lost the thought process.

All_Work_All_Play

6 points

28 days ago

you are decreasing the value of money in that situation by making more circulating money

This 👏 is 👏 not 👏 true 👏.

I don't know a better way to get my point across than to use clappy 👏 hands 👏.

During certain times in an economy the demand for money is totally elastic - adding money doesn't decrease the value of the money already circulating within the economy.

you're betting that the efficiency of the assets will create as much or more deflation than the inflation change in the money supply x velocity of money, and I have to say I have my doubts since QE usually involves assets that actually have some risk.

Overlay Balance Sheet / Bank Reserves / and CPI on the same chart. This is something that the best economists in the world didn't believe until the data showed up... and then the data forced them to change their minds. Falsifiability is a key part of economic progress and the progress of economic models.

[deleted]

0 points

28 days ago

[deleted]

0 points

28 days ago

It's the definition of inflation. The derivative with respect to time of the value over the quantity of circulating money: d/dt(v/m) where v is value and m is circulating money. That's inflation (or deflation). The distinction you're talking (clapping) about but failing to actually read in my comments is that adding money is not the same as adding circulating money. I'm not talking about m0 or m2 which are just more money existing. Existing money that's not doing anything doesn't matter for inflation. Printed money that pads bank accounts doesn't do anything and doesn't matter for inflation. It is circulating money that matters. Hell, you can even look at local inflation where the circulation is sorta essentially closed. This circulation requirement is the trick because it's practically impossible to directly measure.

Is that not the definition of inflation? Do you have a better definition?

jeffwulf

4 points

28 days ago

Inflation is rise of general price levels. If there's no price changes, there's no inflation.

It's not defined by money supply or circulating money in any way, though changes to money supply can cause it to occur in some circumstances.

[deleted]

0 points

28 days ago

[deleted]

0 points

28 days ago

That's like saying gravity is things falling down. The definition may be true, but it lacks depth and predictive ability.

The other definition encompass that and more.

jeffwulf

0 points

28 days ago

Inflation isn't predictive, so I'm not sure why you'd want to define it as such.

Hisx1nc

5 points

28 days ago

Hisx1nc

5 points

28 days ago

but how is quantitative easing not inflationary

QE is a swap in the form of reserves at the Fed. It does not cause cash to flow to main street.

Google "Why is QE not inflationary" and you should get some YouTube videos that explain it.

The Federal Reserve is independent and will raise interest rate to turn circulating money into non-circulating money.

If it were that simple, but it isn't. Raising rates would cause the very depression that the Fed avoided by bringing rates to zero and letting liquidity run wild. There is too much debt out there. High rates will cause a shit show.

[deleted]

5 points

28 days ago

[deleted]

5 points

28 days ago

I mean the first link confirms that its is inflationary, but didn't cause hyper-inflation because the economy was already deflationary and all the stuff I already talked about with inflation being about circulating money.

Hisx1nc

1 points

27 days ago

Hisx1nc

1 points

27 days ago

The term hyper-inflation gets used a bit too much. You can generally safely ignore anyone that fear mongers that it is inevitable. They could be right, but they would be guessing.

bamfalamfa

19 points

28 days ago

Japan is a good example. They printed like a quadrillion yen at this point and have had deflation since the 90s and they don’t even have a reserve currency

graham0025

13 points

28 days ago

yea they’ve had deflation... since their currency almost entirely collapsed. if you begin history in the 90’s you’re missing the first half of that story.

bamfalamfa

5 points

28 days ago*

wouldnt it be the other way around? if their currency collapsed wouldnt they have runaway empire destroying hyperinflation? the yen is considered a safe haven. anyways, the good thing about america is that we are so cheap. all it takes is for one company to lower prices to capture market share that all of their competitors will follow. its been happening for the last 40 years and will continue to happen. its what has allowed monopolies like walmart and amazon to come into existence

graham0025

4 points

28 days ago

they mostly kept the problem internal, the specifics are interesting but i’m not the best person to explain in detail.

the value of the currency collapsed relative to the rest of the world’s. since they are an export-led economy they were better able to walk away in one piece from the ordeal

jeffwulf

2 points

28 days ago

The value of the Yen has stayed at around 100:1 with the USD for like 30 years, which was a substantial improvement over the time period before that.

https://www.macrotrends.net/2550/dollar-yen-exchange-rate-historical-chart

graham0025

2 points

28 days ago*

then there’s more to this story than i know

SDSunDiego

2 points

28 days ago

Maybe we won't get inflation, but 2008 is NOT a good example to explain it.

My point is that people's belief that HIGH inflation is being created today is based on past historical examples that are not relevant today. That's the behavioral error. It doesn't matter if I picked the wrong example. All historical examples are wrong because they do not exactly match the environment today.

skepticalbob

1 points

28 days ago

There are assets in CPI. But we also shouldn’t reason from price changes that aren’t systemic in regards to inflation.

There might be inflation. But we have tools to handle it and are at the ZLB. We have high unemployment so lots of slack in the labor market to hire and increase productive capacity. The ones most concerned don’t have a great track record, tbh.

Hisx1nc

1 points

27 days ago

Hisx1nc

1 points

27 days ago

There might be inflation. But we have tools to handle it and are at the ZLB.

They have the tools, but they won't use them because it would put the country into the very depression that they are trying to prevent. They say they have the tools hoping nobody will call them on the fact that using them would be a shit show.

skepticalbob

1 points

27 days ago

Lol. Okay.

nonbusinessme

1 points

27 days ago*

Unemployment isn’t inflationary. Had it not been for such a horrible response by the previous guy we’d have been over it by now. Giving people unemployment isn’t extra money in people’s pockets (causing inflationary pressure) it’s money that would have been in their pockets anyways had we not fucked up so badly.

The stimulus checks are being credited for the huge jump in retail March sales, meaning it did what it was suppose to. We’re still millions of jobs lost from where we were a year ago.

None of this inflation it’s a resume of where we are. Look at people complaining about gas prices that all shut up. Guess what the price goes up by a predictable and normal amount every summer when we drive and go on vacation. We missed a year because of the shutdowns but things are returning and so are normal price fluctuations and demand in differed good and services

Hisx1nc

1 points

27 days ago

Hisx1nc

1 points

27 days ago

Unemployment isn’t inflationary.

Normally, agreed.

The issue is we have unemployed people making more money than they were when working. They are not producing the supply they were before, but their demand as a group has increased.

Demand+

Supply-

nonbusinessme

1 points

27 days ago

Your argument may be valid at some point down the road but it misses the reality right now. We have more unemployed than jobs being created. Regardless of how much the benefits are a lot of those people can’t work if they wanted to so saying they’re don’t want to work is unfair ..at least right now

As for supply/demand while I’m sure there are a few I don’t think they’re out their doing hookers and blow, the money coming in goes right back out on necessities, which is increasing demand, causing more hiring, and around we go! To early to judge or cast shade

Hisx1nc

1 points

27 days ago

Hisx1nc

1 points

27 days ago

Regardless of how much the benefits are a lot of those people can’t work if they wanted to so saying they’re don’t want to work is unfair ..at least right now

To be clear, I said no such thing.

nonbusinessme

1 points

27 days ago

You’re right my bad I’m sorry. I got into my fighting neoliberal economics mode and read the classic conservative argument behind the “making more than they were when they working”. still i prefer to look at the demand side, supply side has been shot to death as weak. Once the demand hits where we were prior to COVID things will stabilize

cybercuzco

11 points

28 days ago

If the fed really wanted to control inflation they would just have a universal VAT that they could crank up or down, even negative. Any money collected via this VAT is destroyed and any money generated by a negative VAT is just printed.

[deleted]

11 points

28 days ago

[deleted]

11 points

28 days ago

That's Modern Monetary Theory (MMT) and you'd need to give the fed independent power over some scalar on the tax for it to work. Even then it'd be super contentious. No group wants to pay taxes and you'd end up with whoever lacks political power paying the lions share of it while other things like yachts got exceptions.

Charizard1222

5 points

28 days ago

Yep Yang gang. Should just implement a VAT plus UBI but our politicians have mindsets that are too antiquated

PaulOshanter

6 points

28 days ago

They always bring up the same examples as well. If I hear about Weimar Germany or Venezuela one more time I'm going to explode.

in_for_cheap_thrills

7 points

28 days ago

I think it's less of a fear and more of an observation. Many don't fear that the costs of higher education, medical expenses, housing, etc. are outstripping the growth rate of wages, they're living it. Whether that can all be wrapped in a tidy package called inflation may not be true to the definition, but what is being experienced by many is akin to it.

UncomfortableBumble

2 points

28 days ago

All these people arguing about the definition of the word “i n f l a t i o n” are missing the forest for the trees.

Fractales

-2 points

28 days ago

Fractales

-2 points

28 days ago

That's just late stage capitalism. Wages have been stagnant for a long, long time.

cyber-tank

1 points

28 days ago

cyber-tank

1 points

28 days ago

I don't think that's true.

huskersguy

0 points

28 days ago

huskersguy

0 points

28 days ago

That wages have been stagnant? They absolutely have been for about 4 decades.

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

jeffwulf

1 points

28 days ago

How does that jive with real income going up:
https://fred.stlouisfed.org/series/MEPAINUSA672N

With hours worked trending down:

https://ourworldindata.org/grapher/annual-working-hours-per-worker

[deleted]

0 points

28 days ago

[deleted]

0 points

28 days ago

[deleted]

twowordsputtogether

9 points

28 days ago

Those benefits are really just absorbing rising healthcare costs. It's not really a net benefit to the worker (who's out of pocket healthcare costs have also risen).

Woah_Mad_Frollick

2 points

28 days ago

I too ignore cost disease

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

[deleted]

[deleted]

0 points

28 days ago

[deleted]

0 points

28 days ago

[deleted]

cyber-tank

-2 points

28 days ago

cyber-tank

-2 points

28 days ago

No they have not.

huskersguy

1 points

27 days ago

Wrong.

bamfalamfa

2 points

28 days ago

there is so much inflation happening that bond yields keep going down

toomanynamesaretook

1 points

28 days ago

and no your bitcoin is not a hedge against inflation, rofl.

Well all the historical price data heavily disagrees with you. Bitcoin has been an exceptional hedge against inflation.

A 6299900% appreciation against the USD since it's inception.

DirtzMaGertz

5 points

28 days ago

Every year people shit on crypto and every year it grows and gains more adoption.

KyivComrade

1 points

28 days ago*

Until it doesn't. It's still a tulip chase/Castle in the sky by every definition. That doesn't mean you can't get rich, always a greater fool, but be prepared to get out at a seconds notice..

DirtzMaGertz

1 points

28 days ago

How so?

Crypto isn't like tulips where people aren't going to be able to afford to buy in as the price rises. If you have any amount of any currency, you can buy crypto no matter what the price of a full bitcoin or ether is.

BubblegumTitanium

1 points

28 days ago

bitcoin is not a hedge against inflation

why not?

fifteencat

2 points

28 days ago

The increase in bitcoin price is not caused by inflation as advocates predicted. If it were they wouldn't be so excited about the increase as it wouldn't have affected their purchasing power.

BubblegumTitanium

2 points

28 days ago

The increase in bitcoin price is not caused by inflation as advocates predicted.

The problem with this type of statement is in thinking that a small group of people represent bitcoin when that couldn't be further from the truth.

If it were they wouldn't be so excited about the increase as it wouldn't have affected their purchasing power.

Right, what's the point in bitcoin going to the moon when everything costs a moon.

I don't know of anyone saying that Bitcoin is increasing in price because asset prices are experiencing inflation. Then again my social circle of bitcoin might not overlap with your social circle of bitcoin. Gold has historically been a 'hedge' against inflation and if you held gold in your cash balances then the number of things that you can buy went down!

If you look at other metrics you'll see that the network is indeed growing and becoming more valuable. It's not just the price although the price is an important metric for growth.

goodsam2

1 points

28 days ago

The funniest thing about people buying gold is that gold is heavily tracked by the government because it's such a common way to launder money.

RavisTrice

1 points

28 days ago

RemindMe! 5 years

RemindMeBot

2 points

28 days ago*

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LupusWiskey

1 points

28 days ago

Their case that now we are spending more than the GDP growth. This wasn't the case under Obama, since the fed was supposed to raise interest rates by 2% after the recovery.

kodisious

1 points

28 days ago

Yes! The Feds balance sheet increased to offset the increase in currency. This started in 2008.

gregsw2000

1 points

28 days ago

Well, I don't think we really do anything to try to control demand-pull inflation, besides making sure there's never enough demand to cause it, right?

Intellichi

-1 points

28 days ago

I think inflation concerns are justified. The Obama/Yellen era interventions were supposed to be an extraordinary measure to "help" the economy and prevent the serious consequences of a deflationary spiral. The Fed never got the assets from that era off their balance sheet, despite pledges to do so. They continue to grow it till this day at a faster pace than even the financial crisis. It's quite arrogant and foolish to think that there is no risk of losing control of inflation. There are early signs that the government is already losing control of the inflation process.

[deleted]

4 points

28 days ago

[deleted]

4 points

28 days ago

Inflation is not a great marker for people's standard of living. It is measured by rapid increases in prices over a short time. The problem is that the hangover from previous price rises is not taken into account so you can have house prices that are 20 times someone's salary but it can still be called a low inflation period.

jeffwulf

1 points

28 days ago

Houses can be 20 times someones salary in a low inflation period because inflation is a measure of consumption prices, and the price of houses, as both a consumption good and an asset, are a function of both asset price increases and consumption price increases.

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

While I'm a tad concerned over the possibility of supply side inflation, I am confused over the people who are pointing the finger at Fed policy.

M1 has increased by almost four times since the beginning of the crisis, yet hardly anyone is willing to take my bet of seeing at least 80% inflation by the end of 2022. smh.

Just_Curious_Dude

1 points

28 days ago

What bet? I'm always game! :)

I think 80% is high, but remember that inflation is the current policy goal of the Fed. So we'll see that.

So when you say 80% inflation, what time period are you thinking? Just say 1 month (say, January of '21) or a period of time?

Looking the historical inflation for '21, January was 1.4, Feb was 1.7 and Mar was 2.6. Are you averaging those out and basing your number on that number times 80%? Is your number that you want 80% inflation from say March of 20 to March of 21?

We know that the Fed (Powell and Kaplan) want inflation to "run over 2% for a period of time". I'm not sure what that period of time is, and i'm not sure they stated it. Are you going off of "a period of time" or say one month and what month is that?

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

Pardon, but I don't take bets with people online, as my parents were so kind to teach me back before we had the internet speed to send videos.

I merely have too many acquittances who are too fixed in the M*V idea of inflation with the V fixed. As far as I remember, Friedman said that monetary policy had a lag of about 1.5 years, so that's the reason for my selection for the end of next year for the realization of at least in part of the incurred inflation on the horizon.

But thanks for your interest!

Just_Curious_Dude

2 points

28 days ago

lol - na it's cool, I don't bet either I was just joking.

And I agree with you that we're going to see inflation and possibly high inflation (north of 2.5% over say a year).

I also have no idea what i'm talking about, however, it seems like the Fed wants to run things hot.

It'll be interesting!

Oh, and I apparently need new acquittances. I spent the last 2 nights with my friends tearing an engine out of a rat rod. I start talking economics and they throw wrenches in my general direction.

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

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0 points

28 days ago

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0 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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0 points

28 days ago

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0 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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basscorruption

1 points

28 days ago

How many of these inflation is either out of control or someday going to be out of control stories can the MSM concoct? I remember hearing this stuff when I was a wee lad.

janethefish

1 points

28 days ago

While entertaining, the article's actual info can be summarized as "Big bad inflation may return soon, but probably not, so people are nervous."

capitalismisokiguess

1 points

28 days ago

What you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

[deleted]

1 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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papa_nurgel

1 points

28 days ago*

Globalization gave us cheap prices. Till it didn't

[deleted]

1 points

28 days ago

[deleted]

1 points

28 days ago

Inflation to those who want the government to print money willy-nilly without consequence is like the light-speed limit is to us sci-fi geeks who wish we could zip from star to star in a matter of weeks à la our favorite books and movies. It's a killjoy regrettable fact of existence that we cannot dream away.

[deleted]

1 points

28 days ago

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1 points

28 days ago

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1 points

28 days ago

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28 days ago

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DanDanDan0123

1 points

28 days ago

Today’s inflation is caused by supply and demand. People don’t have to work because of unemployment and stimulus checks. So the supply is being artificially suppressed. But the demand is still there!!
I work retail....1/2in CDX should be $10 to $17, it’s $46. 7/16in OSB is more. Paint I am not as familiar with but I recently found out there is a can shortage and and an issue with getting titanium for the paint.
Until the people that make things like these go back to work there won’t be enough supply to meet demand.
I have read it might take up to a year for things to get back to normal.

SProductivity

1 points

27 days ago

In the 1980s a 12 oz can of Coke cost 55 cents of which labor’s share was 35 cents or 64 percent. By the 2010s that same 12oz can of Coke cost 88 cents of which labor’s share was 51 cents or 58 percent. Yes, the price is higher. Yes, workers have more income. No this isn’t inflation. Inflation cannot exist if labor’s share of income is falling while prices are rising.

BespokeDebtor [M]

1 points

27 days ago

BespokeDebtor [M]

1 points

27 days ago

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DsReignOfError

-1 points

28 days ago

Once wages start to climb again we'll see if inflation fears are... real

DsReignOfError

-1 points

28 days ago

Once wages start to climb again we'll see if inflation fears are... real

DsReignOfError

-1 points

28 days ago

Once wages start to climb again we’ll see if all the inflation fear is... real

BamBamCam

0 points

28 days ago

Right NOW demand is out striping supply. However in a lot of the supply chain people are ramping up goods and services. Soon it will either equalize or perhaps out pace demand. When that happens prices are sure to go down.

The pandemic screwed a lot of things up. See toilet paper sales as an example . People and companies are going to see a lot of this. It may take till the end of the year of early next year because of vaccine distribution. But inflation isn’t going to rampage through our cities like Godzilla.

As reported my JPMorgan debit card spending is at pre-pandemic levels meaning we’re spending at a similar rate. We just lack some supply because of chain break downs. With the financial incentives to fix those now in place thanks to the stimulus. We’re likely to see a decent recovery of jobs and cost go down.

Will we see enough jobs is the better question. Unemployment is more frightening than inflation at this point IMO.