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Is it inflation only or a catch-up adjustment phenomenon combined with a lag in production resumption? Lots of purchases and procurement were basically delaye

by rq1 5y ago

Is it inflation only or a catch-up adjustment phenomenon combined with a lag in production resumption? Lots of purchases and procurement were basically delayed and postponed, thus buffered. Inflation could explain why prices didn’t drop with the demand in the meanwhile.

state_less 5y ago
I think it’s temporary inflation. If you take into account the extraordinary circumstances we went through, the numbers make more sense. At this time last year we had massive deflation(e.g. airfare, hotels, house prices and oil went down in price). Now that demand is coming back, all these things are much higher price from this time last year. That’s why I think you see massive year over year inflation numbers. Over the next couple years, I am expecting inflation to average higher 2-3 %, but skeptical we’ll have runaway inflation(I.e. 5+% YoY for the next couple years).
- dragonwriter 5y ago
  > At this time last year we had massive deflation No, we didn't. > (e.g. airfare, hotels, house prices and oil went down in price). Yes, some of those sectors experienced deflation; overall, price levels were flat, not in “massive deflation”.
  - state_less 5y ago
    Nevertheless, people are exposed to those sectors, oil being a prominent one. I won’t quibble over what is big or massive. I still standby the idea that the virus is causing all these price swings and that it’s temporary. I think we’ll still have inflation, just not hyperinflation.
  - beerandt 5y ago
    Prices flat with decreased supply and increased demand isn't really flat, especially with the additional trillions of dollars added to circulation.
    - dragonwriter 5y ago
      > Prices flat with decreased supply and increased demand isn't really flat, especially with the additional trillions of dollars added to circulation. Yes, it is; supply and demand (and money supply is part of that) are price determinants. A flat output is a flat output regardless of the inputs that produced it. And, anyhow, most of the additional dollars were added after the brief period of flat overall price levels, and explain the return to inflation.

by rq1 5y ago

state_less 5y ago

I think it’s temporary inflation. If you take into account the extraordinary circumstances we went through, the numbers make more sense. At this time last year we had massive deflation(e.g. airfare, hotels, house prices and oil went down in price). Now that demand is coming back, all these things are much higher price from this time last year. That’s why I think you see massive year over year inflation numbers. Over the next couple years, I am expecting inflation to average higher 2-3 %, but skeptical we’ll have runaway inflation(I.e. 5+% YoY for the next couple years).

dragonwriter 5y ago
> At this time last year we had massive deflation No, we didn't. > (e.g. airfare, hotels, house prices and oil went down in price). Yes, some of those sectors experienced deflation; overall, price levels were flat, not in “massive deflation”.
- state_less 5y ago
  Nevertheless, people are exposed to those sectors, oil being a prominent one. I won’t quibble over what is big or massive. I still standby the idea that the virus is causing all these price swings and that it’s temporary. I think we’ll still have inflation, just not hyperinflation.
- beerandt 5y ago
  Prices flat with decreased supply and increased demand isn't really flat, especially with the additional trillions of dollars added to circulation.
  - dragonwriter 5y ago
    > Prices flat with decreased supply and increased demand isn't really flat, especially with the additional trillions of dollars added to circulation. Yes, it is; supply and demand (and money supply is part of that) are price determinants. A flat output is a flat output regardless of the inputs that produced it. And, anyhow, most of the additional dollars were added after the brief period of flat overall price levels, and explain the return to inflation.