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3) I think their point is that when you are at 10%, it's not probable that it will reverse at that point.
by joycian 6y ago
3) I think their point is that when you are at 10%, it's not probable that it will reverse at that point.
- pjc50 6y agoA bit like the coronavirus, that depends whether the government takes appropriate action and what they've raised rates to by that point. If the government of the US has become too dysfunctional by then, sure; but I continue to not understand why Americans seem to embrace the dysfunctionality and political helplessness. America could choose to fly itself into the twin towers, but it could also .. choose not to?
- Klinky 6y agoI think 3 is flawed in general, since 5% price increase often does not result in 5% salary increase. Wages have not kept up with inflation/CoL especially at the bottom, for decades. Instead, consumption would probably drop, especially for non-essentials. If consumption is low, prices would also probably remain low, or possibly lower, especially for non-essentials. For high-demand essentials, probably supply/demand is more likely to create higher costs, than inflationary sources. Right now I think a lot of people are in hunker-down mode. Without outrageous consumption to increase demand, reduce supply, raising prices and CoL to force increased salary demands, I don't think this self-fulfilling inflation will happen. Maybe the danger is people being overly-flush with cash after COVID-19 passes, but that looks like it'll be pretty far down the road, and I think we're also due for a bubble to pop on Wall Street, which will probably also hamper inflation.