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> something other than increased consumer spending, like supply chain issues, is causing the inflation My (naive) understanding is these are tightly linked. Th
by tobyjsullivan 5y ago
> something other than increased consumer spending, like supply chain issues, is causing the inflation
My (naive) understanding is these are tightly linked. The process is something like:
=> Consumers have more cash to spend on goods.
=> Consumers buy more goods
=> More demand is created for commodities to build those goods
=> Demand for commodities exceeds demand
=> Commodity prices inflate
=> Manufactured good prices inflate
- blacksqr 5y agoYes but the article explicitly states that the vast majority of consumers don't have more cash to spend. So the cause of the inflation must be something else.
- new_realist 5y agoYes, it is caused by something else: the 28% of consumers who do have more cash to spend.
- blacksqr 5y agoThen the solution is simple: tax the rich.
- sjg007 5y agoThat's not enough to move the needle. I think we are seeing "inflation" due to short term supply chain stop and restart. As incomes are still fixed and there are cheaper substitutes for almost everything you want to eat people will modify and reduce.
- machinebun 5y agoThem having the cash doesn't necessarily mean they spent it; plus, they could have spent it on deleveraging their debts (and not on consumption). I tend to agree that all the inflation we are seeing right now is supply chain related (with the one exception of graphics cards - the liquidity injected into the system probably made price of crypto go up which accelerated the demand for GPUs, so the GPU issue is both a supply problem & demand problem)