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> The US need not worry about inflation until a bigger more stable economy comes along, which is a long way off. You raised a good point about inflation not ne
by OnlineGladiator 5y ago
> The US need not worry about inflation until a bigger more stable economy comes along, which is a long way off.
You raised a good point about inflation not necessarily being tied to printing money, but you ignored the fact that if you print more money (without an obvious productive place for it to go) then you simply increase supply without increasing demand which causes inflation. It's happening right now in the US by just about every metric, and there is good reason to believe it is about to go up a lot more.
So no, the US not only is currently experiencing inflation like it has not seen for decades but there is likely to be a lot more in the near future. The Fed is printing money like crazy (I believe we've printed approximately 30% of our total money supply in the past ~2 years, so in ~2 years we've printed approximately half as much money as we did in the previous ~200 years) which deflates the value of our currency. I actually rounded all the numbers down to make it seem less problematic than it is - I encourage you to check the data for yourself.
- alangibson 5y agoThe Fed has been printing money like crazy for over a decade. Prices are rising due to supply chain breakdowns.
- ubercow13 5y ago>I believe we've printed approximately 30% of our total money supply in the past ~2 years Doesn't that money start disappearing as soon as the QE stops?
- dv_dt 5y agoMany people including the Fed chair as well as hedge funds like Bridgewater, do not believe the current inflation is fundamentally due to issue of currency. They believe it has to do with supply side shocks driven by covid and climate events worldwide.
- salawat 5y agoBelieving in something doesn't make it true. Also, given the poor track record of economics in the reproducibility department, I'd take that with a grain of salt.
- dv_dt 5y agoI wouldn’t say to take experts opinions without further research, but causal dismissal of both the Fed and multi decade successful hedge fund of Bridgewater is foolish.
- lionhead 5y agoI agree in a way; there has been a lot of inflation due to printing money, but that inflation went straight to and stayed in the financial sector, supporting assets prices for the last decade. The recent inflationary trend in the real economy is due to "real" factors, including the covid-19 shock.
- salawat 5y agoWhat is your criteria of success? Mere generation of profit is not mine. Solving societal issues (making them no longer issues with minimal entrenchment of other issues) is mine. War can be profitable. Climate change can be profitable. Making unsafe airplanes can be profitable. Financial system brittleness can be profitable. With allocation of capital being the primary incentive setter, and the Fed playing a role of removing the pain and sting of artificially inflated assets, I'm not convinced that Market reality even tracks well with reality anymore. Where is the surge of investment in physical and supply chain investment in light of all of the logistical difficulty we've run into? Where is the funding of domestic manufacture? Where is the wage growth? Where is the transparency in medical cost reduction? These are all signs that the economy, instead of focusing on getting real work done, is off chasing purely fiscal optimization rather than societal risk mitigation. So... Beg your pardon, but I think your measures of success and mine are different enough that I can reasonably say that by my metrics, those "experts" are failing to deliver at anything except perpetuating the status quo that keeps them in a job. That's just me though.