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It's temporary. Shift in consumer demand due to work from home, plus temporary logistics inefficiencies and hoarding (similar to toilet paper shortages) can ex

It's temporary. Shift in consumer demand due to work from home, plus temporary logistics inefficiencies and hoarding (similar to toilet paper shortages) can explain higher prices. Also, consumer has to pay for ppe, cleaning, work restrictions during all steps a product was made, distributed and delivered.

bufferoverflow 5y ago
You don't think printing trillions of dollars at never seen before rates is the inflation driver?
- throw0101a 5y ago
  No. And neither do people who have to deal with billions of dollars worth of US bonds, given that 10Y Treasury inflation expectations have peaked and are currently going down: * https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE The Market™ (currently) thinks this is transitory. See also 5Y: * https://fred.stlouisfed.org/series/T5YIE https://fred.stlouisfed.org/series/T5YIE Of course the economy is dynamic, so we'll see what happens when things continue to open up as people get vaccinated. Things may have to be slowed down: but a 'too hot' economy is a nice problem to have, versus the alternative of a too slow one where there's lots of people that are unemployed. Pre-pandemic the US unemployment rate was at 3.5%; it's currently at 5.8%: * https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE I wouldn't be surprised that the desire is to get that lower before considering applying the brakes.
  - sethc2 5y ago
    So at what point would printing trillions of dollars have an effect? If we just gave everyone 10k a month, would inflation occur then?
    - throw0101a 5y ago
      > So at what point would printing trillions of dollars have an effect? For a start, when interest rates are not at (effective) zero: * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound * https://en.wikipedia.org/wiki/Liquidity_trap https://en.wikipedia.org/wiki/Liquidity_trap In an independent, competently run central bank "money printing" generally only occurs during economic disasters, where the first thing that is generally done is that the central bank reserve rate gets cut. Further, it should also be recognized that 99% of the "money" that is created in modern financial systems is done by private banks when they issue loans: * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 There are a bunch of myths about what "money printing" actually is: * https://www.pragcap.com/everything-wrong-with-the-money-printer-go-brrrr-meme/ https://www.pragcap.com/everything-wrong-with-the-money-prin...
    - ajmadesc 5y ago
      All the 'printed' money is given directly to corporations. This increases their share price. That's where the inflation is. Asset process
      - sethc2 5y ago
        What I figure is the printed money is given to people to buy things. It’s given to him who saved/inherited his money and could’ve bought that thing anyways, and to him who didn’t save/inherit his money and couldn’t. The seller of that thing now has two people competing for it so he can mark up the price further. He makes profit because he owns the capital, the non-saver or non inheritor, gets a good he couldn’t otherwise afford, and the saver is stuck paying a higher price. That saver/inheritor who doesn’t own assets but only has his labor to sell, or his inheritance to spend, is effectively having some of his money taken from him and given to the non-saver and the rich man with capital.

bufferoverflow 5y ago

You don't think printing trillions of dollars at never seen before rates is the inflation driver?

throw0101a 5y ago
No. And neither do people who have to deal with billions of dollars worth of US bonds, given that 10Y Treasury inflation expectations have peaked and are currently going down: * https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE The Market™ (currently) thinks this is transitory. See also 5Y: * https://fred.stlouisfed.org/series/T5YIE https://fred.stlouisfed.org/series/T5YIE Of course the economy is dynamic, so we'll see what happens when things continue to open up as people get vaccinated. Things may have to be slowed down: but a 'too hot' economy is a nice problem to have, versus the alternative of a too slow one where there's lots of people that are unemployed. Pre-pandemic the US unemployment rate was at 3.5%; it's currently at 5.8%: * https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE I wouldn't be surprised that the desire is to get that lower before considering applying the brakes.
- sethc2 5y ago
  So at what point would printing trillions of dollars have an effect? If we just gave everyone 10k a month, would inflation occur then?
  - throw0101a 5y ago
    > So at what point would printing trillions of dollars have an effect? For a start, when interest rates are not at (effective) zero: * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound * https://en.wikipedia.org/wiki/Liquidity_trap https://en.wikipedia.org/wiki/Liquidity_trap In an independent, competently run central bank "money printing" generally only occurs during economic disasters, where the first thing that is generally done is that the central bank reserve rate gets cut. Further, it should also be recognized that 99% of the "money" that is created in modern financial systems is done by private banks when they issue loans: * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 There are a bunch of myths about what "money printing" actually is: * https://www.pragcap.com/everything-wrong-with-the-money-printer-go-brrrr-meme/ https://www.pragcap.com/everything-wrong-with-the-money-prin...
  - ajmadesc 5y ago
    All the 'printed' money is given directly to corporations. This increases their share price. That's where the inflation is. Asset process
    - sethc2 5y ago
      What I figure is the printed money is given to people to buy things. It’s given to him who saved/inherited his money and could’ve bought that thing anyways, and to him who didn’t save/inherit his money and couldn’t. The seller of that thing now has two people competing for it so he can mark up the price further. He makes profit because he owns the capital, the non-saver or non inheritor, gets a good he couldn’t otherwise afford, and the saver is stuck paying a higher price. That saver/inheritor who doesn’t own assets but only has his labor to sell, or his inheritance to spend, is effectively having some of his money taken from him and given to the non-saver and the rich man with capital.