5 ms·

Is it still considered inflation if it's rather temporary? I agree whole heartedly with your comment, was just curious about the terminology since inflation us

by axaxs 5y ago

Is it still considered inflation if it's rather temporary? I agree whole heartedly with your comment, was just curious about the terminology since inflation usually seems to imply a...longer term trend.

fnord77 5y ago
it's "supply shock" inflation. it is temporary.
- shockeychap 5y ago
  Do you really think there can be this much government-doled money, money printing, and wage raising without permanent inflationary consequences? I can’t hire anybody right now because so many people not working are getting more from unemployment than they would in a job. This is going to unwind at some point.
  - DubiousPusher 5y ago
    Normally no but given the almost complete lack of inflation during the post financial crisis years, despite continuous predictions of its eminent arrival it's become a lot harder to say. It's honestly one of the big mysteries in contemporary economics. It's possible this current wave of anecdotes of price increases is indicitive of a large wave of inflation. It's also possible it is just a short lived mismatch between the demand economy ticking on slightly before the supply economy does.
    - lotsofpulp 5y ago
      > It's honestly one of the big mysteries in contemporary economics. I assumed it was due to the increasing income/wealth gap. You have automation and cheaper labor from other countries reducing the price of labor for a substantial amount of people, seen in the lack of meaningful rise in wages for decades. You also have the US splitting into very desirable areas seeing lots of increase in prices, but more of it seeing price decreases due to lack of demand. Concentration of businesses that offer higher paying job opportunities contributes here, as well as people’s preferences.
      - imtringued 5y ago
        Income/wealth gap is just a result of the increased savings rate in the corporate sector. There are a billion reasons but most of them are caused by an unwillingness if companies to invest their savings to grow the business. If you don't employ anyone, the unemployed still have to eat which means corporate savings grow at the expense of the unemployed. Of course, investing your savings into growth is fine, because that will both employ people and net a return for your business. Why aren't companies growing their business? One problem is that there is not enough consumer demand to justify it. Why is there not enough consumer demand? Because people are unemployed or underemployed. It's a vicious cycle.
        lotsofpulp 5y ago
        >Income/wealth gap is just a result of the increased savings rate in the corporate sector. I do not see the connection here. It seems more direct to say that the supply and demand curves for labor have shifted in such a way that the price of labor has gone down for the labor many people are selling. >Of course, investing your savings into growth is fine, because that will both employ people and net a return for your business. That’s one of those how to draw an owl things. Maybe if the whole country got behind it as an effort, it might work if properly executed. But one or a few companies doing it (without the caliber of organizations like Apple) are probably just going to end up with worse financials, and get punished for it by investors.
  - ClumsyPilot 5y ago
    It seems to be all going into inflating house and stock prices, i am way more concerned about the asset bubble
    - shockeychap 5y ago
      I’m concerned both about an asset bubble and runaway inflation - the kind that destroys savings and triggers class mobility in the wrong direction.
  - imtringued 5y ago
    Japan managed to have 30 years with unreasonably low inflation. Remember, the purpose of that money printing is to add money back into the economy while various factors are removing it from the economy. By "economy" I primarily mean the productive part, namely businesses and workers doing work on behalf of a customer. Somehow the money is not reaching the productive part of the economy. Of course that is changing in 2021, governments finally decided to hand out money directly to those who actually want to spend it and that is a good thing. If it works, then money printing no longer becomes necessary.
    - andrepd 5y ago
      If you are printing money why would you give it to banks and financial institutions, and not to the people themselves? (Assuming good-faith and not the obvious explanation, of course).
TOSSAWAY_1 5y ago
What evidence do you have that its temporary?
- axaxs 5y ago
  Assumptions based on contributing factors. You had people more or less hold off on everything for a year, which tanked suppliers. Now that there's light at the end of the tunnel, everyone is buying making up for lost time, while supply hasn't recovered and realistically aren't going to double their capacity for what is seen as a short term spike. With lumber prices where they're at, you'd see mills popping up like oil wells if they had any hope those were permanent increases.
  - Loughla 5y ago
    So it's anecdotal at best, but where I live, anyone with an old portable sawmill sitting in a barn collecting rust has been getting them out, cleaning them up, and have started sawing again. I'm talking people who retired 20-30 years ago, or people who bought property with a mill on it and have literally never used it.
- bidirectional 5y ago
  Interest rates are near 0%. If inflation appears it can be combated incredibly easily.
  - TOSSAWAY_1 5y ago
    Unless of course we've missed the time to raise them :)
prepend 5y ago
Inflation is just the change over time. If you’re measuring a month or year it’s still inflation. Trends in inflation are just that, trends. So it’s certainly possible to have high inflation for short periods.
DubiousPusher 5y ago
Right now I'd say we don't know what it is. We have some anecdotal evidence from various industries but until we get some updates from the wider indices used to track inflation there's probably not much point in speculation.

by axaxs 5y ago

fnord77 5y ago

it's "supply shock" inflation. it is temporary.

shockeychap 5y ago
Do you really think there can be this much government-doled money, money printing, and wage raising without permanent inflationary consequences? I can’t hire anybody right now because so many people not working are getting more from unemployment than they would in a job. This is going to unwind at some point.
- DubiousPusher 5y ago
  Normally no but given the almost complete lack of inflation during the post financial crisis years, despite continuous predictions of its eminent arrival it's become a lot harder to say. It's honestly one of the big mysteries in contemporary economics. It's possible this current wave of anecdotes of price increases is indicitive of a large wave of inflation. It's also possible it is just a short lived mismatch between the demand economy ticking on slightly before the supply economy does.
  - lotsofpulp 5y ago
    > It's honestly one of the big mysteries in contemporary economics. I assumed it was due to the increasing income/wealth gap. You have automation and cheaper labor from other countries reducing the price of labor for a substantial amount of people, seen in the lack of meaningful rise in wages for decades. You also have the US splitting into very desirable areas seeing lots of increase in prices, but more of it seeing price decreases due to lack of demand. Concentration of businesses that offer higher paying job opportunities contributes here, as well as people’s preferences.
    - imtringued 5y ago
      Income/wealth gap is just a result of the increased savings rate in the corporate sector. There are a billion reasons but most of them are caused by an unwillingness if companies to invest their savings to grow the business. If you don't employ anyone, the unemployed still have to eat which means corporate savings grow at the expense of the unemployed. Of course, investing your savings into growth is fine, because that will both employ people and net a return for your business. Why aren't companies growing their business? One problem is that there is not enough consumer demand to justify it. Why is there not enough consumer demand? Because people are unemployed or underemployed. It's a vicious cycle.
      - lotsofpulp 5y ago
        >Income/wealth gap is just a result of the increased savings rate in the corporate sector. I do not see the connection here. It seems more direct to say that the supply and demand curves for labor have shifted in such a way that the price of labor has gone down for the labor many people are selling. >Of course, investing your savings into growth is fine, because that will both employ people and net a return for your business. That’s one of those how to draw an owl things. Maybe if the whole country got behind it as an effort, it might work if properly executed. But one or a few companies doing it (without the caliber of organizations like Apple) are probably just going to end up with worse financials, and get punished for it by investors.
- ClumsyPilot 5y ago
  It seems to be all going into inflating house and stock prices, i am way more concerned about the asset bubble
  - shockeychap 5y ago
    I’m concerned both about an asset bubble and runaway inflation - the kind that destroys savings and triggers class mobility in the wrong direction.
- imtringued 5y ago
  Japan managed to have 30 years with unreasonably low inflation. Remember, the purpose of that money printing is to add money back into the economy while various factors are removing it from the economy. By "economy" I primarily mean the productive part, namely businesses and workers doing work on behalf of a customer. Somehow the money is not reaching the productive part of the economy. Of course that is changing in 2021, governments finally decided to hand out money directly to those who actually want to spend it and that is a good thing. If it works, then money printing no longer becomes necessary.
  - andrepd 5y ago
    If you are printing money why would you give it to banks and financial institutions, and not to the people themselves? (Assuming good-faith and not the obvious explanation, of course).

TOSSAWAY_1 5y ago

What evidence do you have that its temporary?

axaxs 5y ago
Assumptions based on contributing factors. You had people more or less hold off on everything for a year, which tanked suppliers. Now that there's light at the end of the tunnel, everyone is buying making up for lost time, while supply hasn't recovered and realistically aren't going to double their capacity for what is seen as a short term spike. With lumber prices where they're at, you'd see mills popping up like oil wells if they had any hope those were permanent increases.
- Loughla 5y ago
  So it's anecdotal at best, but where I live, anyone with an old portable sawmill sitting in a barn collecting rust has been getting them out, cleaning them up, and have started sawing again. I'm talking people who retired 20-30 years ago, or people who bought property with a mill on it and have literally never used it.
bidirectional 5y ago
Interest rates are near 0%. If inflation appears it can be combated incredibly easily.
- TOSSAWAY_1 5y ago
  Unless of course we've missed the time to raise them :)

prepend 5y ago

Inflation is just the change over time. If you’re measuring a month or year it’s still inflation. Trends in inflation are just that, trends. So it’s certainly possible to have high inflation for short periods.

DubiousPusher 5y ago

Right now I'd say we don't know what it is. We have some anecdotal evidence from various industries but until we get some updates from the wider indices used to track inflation there's probably not much point in speculation.