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Short version of the argument: The constant low (but steady) inflation that we now see as normal under the 2% inflation targeting in a major contributor to the
by joshuafkon 7y ago
Short version of the argument:
The constant low (but steady) inflation that we now see as normal under the 2% inflation targeting in a major contributor to the significant rise in prices for interest-rate sensitive assets. (Interesting tangent: John Taylor on why he selected 2% as a target: https://economicsone.com/2018/01/09/the-feds-inflation-target-and-policy-rules/ https://economicsone.com/2018/01/09/the-feds-inflation-targe... )
- rdtwo 7y agoExcept inflation is actually significantly higher the basket is just poorly assembled and exclude major drivers like food gas real rent and most importantly medical costs
- toomuchtodo 7y agoI am curious what inflation would be with universal healthcare, a healthy amount of affordable housing, primarily renewables for energy, and EVs negating the need for gas/oil. It feels like central banks are going to lose against technology deflation, but I'm not an economist so I can't say for sure.
- blevo 7y agoI suppose it depends on how those programs are funded/achieved. If they are funded via something that acts as monetary stimulus (just print the money to pay for it) then I imagine there would be a heavy burden of resulting inflation.
- deleted 7y ago[deleted]
- MiroF 7y agoThe inflation marker does what it is designed to do - if it didn't, markets would properly price in that information