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Anecdotally I have loads of friends buying all kinds of stuff with their insane pandemic checks These comments are far too verbose for a phenomenon this simple:

Anecdotally I have loads of friends buying all kinds of stuff with their insane pandemic checks These comments are far too verbose for a phenomenon this simple: print money, people buy stuff, it gets more expensive

nonameiguess 5y ago
The actual issue here is the Fed helicopter dumping into asset markets dwarfed stimulus checks to individuals. That is why it makes no sense to blame it on stimulus checks. The CARES Act allocated $560 billion in individual relief checks. The Fed asset purchases for 2020 is the $3.4 trillion number. That's more than 6 times as much.
ur-whale 5y ago
> for a phenomenon this simple While what you describe might be one factor contributing to higher inflation, it certainly isn't the only one. Supply chain pipeline bubbles are likely another. Unbridled dollar printing and massive govt. debt probably contributes as well. The US quickly losing ground as a superpower thereby undermining the status of the USD as a reserve currency probably a factor. etc ...
- sjg007 5y ago
  There is no way the euro or the yuan will take over anytime soon.
  - ur-whale 5y ago
    > There is no way the euro or the yuan will take over anytime soon. Who said anything about taking over? A world without a reserve currency will be a much better place to live.
tuckerpo 5y ago
>buying all kinds of stuff with their insane pandemic checks When is this meme going to stop? How is a couple of $1200 checks over the course of 6 months enough to let people buy every home on the market all of the sudden?
- nyjah 5y ago
  Where I live everyone got money from unemployment and then months later the state sent letters to people about "overpayment". And its for large amounts of money like $20,000+. I have friends and neighbors that took advantage of it. Seems like everyone spent their 'stimmy' on a camper or raising a truck
- travoc 5y ago
  The US government has made over $3.4 trillion in budgetary outlays in response to the pandemic. It comes in many forms, not just $1,200 checks. $3.4 trillion is a lot of money to add to the economy in 2 years.
- xapata 5y ago
  The housing market dynamic has been (not enough) building for decades.
- YetAnotherNick 5y ago
  > couple of $1200 checks 100s of millions of checks, amounting to trillions of dollars. This is economics 101 that directly printing the money increases inflation. These kind of money accumulates in the hands of few and the market had been quick to act on concentrating the $1200 checks.
  - phreeza 5y ago
    I'm not saying it's not due to these stimulus measures, but I think the economics 101 lesson is kind of refuted by a decade of quantitative easing, which did not cause significant consumer price inflation. The specifics of where you point the money spigot matter, it's more subtle than print money == inflation in today's highly complex economy.
    - jdhn 5y ago
      This stimulus is different from QE in the sense that it went directly to consumers. QE never went directly to consumers, but instead stayed with banks. Personally, I think you can see QE's inflationary effect in both the stock and housing market, but that's just me.
frankfrankfrank 5y ago
I haven't really kept up, but haven't those essentially stopped now, leaving only regular unemployment? I am curious what that will cause because I have heard conflicting information on whether people saved their money or spent it all, not to mention people who have just stopped paying their rent … a whole other ticking time bomb.
JoeAltmaier 5y ago
Another example of grade-school economics - cherry pick a couple of points and draw a stick figure - proved! Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Or: folks have more money so live healthier, increasing productivity and using fewer healthcare resources, so the economy benefits. It's easy! Just throw out some money-sounding words and make the rest up.
- merpnderp 5y ago
  No, it's not easy. But we do know that increasing the money supply faster than economic growth creates inflation. We also know that inflation helps the rich and hurts the poor since it inflates asset prices faster than wages. And guess who owns most of the assets.
- ZetaZero 5y ago
  > Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Only true under certain circumstances. In general, when Demand increases, and Supply doesn't increase to match, prices go up.
- deleted 5y ago
  [deleted]
- simonh 5y ago
  That may happen longer term, but the problem is supply at the moment is not able to grow to meet the increased demand. Just look at all the articles about container ships queueing up at ports, and companies unable to hire enough workers, chip shortages brining manufacturing lines to a halt, energy price spikes. There's proving to be a significant drag on capacity at the same time as the burst in demand. So it's not just QE driving this, but it's certainly a factor.
- postingawayonhn 5y ago
  > Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Not according to any economic theory I've heard of. If consumer incomes rises then the demand curve should shift to the left. This will move the intersection of the supply and demand curves to a point where both quantity supplied and price are higher.

nonameiguess 5y ago

The actual issue here is the Fed helicopter dumping into asset markets dwarfed stimulus checks to individuals. That is why it makes no sense to blame it on stimulus checks. The CARES Act allocated $560 billion in individual relief checks. The Fed asset purchases for 2020 is the $3.4 trillion number. That's more than 6 times as much.

ur-whale 5y ago

> for a phenomenon this simple While what you describe might be one factor contributing to higher inflation, it certainly isn't the only one. Supply chain pipeline bubbles are likely another. Unbridled dollar printing and massive govt. debt probably contributes as well. The US quickly losing ground as a superpower thereby undermining the status of the USD as a reserve currency probably a factor. etc ...

sjg007 5y ago
There is no way the euro or the yuan will take over anytime soon.
- ur-whale 5y ago
  > There is no way the euro or the yuan will take over anytime soon. Who said anything about taking over? A world without a reserve currency will be a much better place to live.

tuckerpo 5y ago

>buying all kinds of stuff with their insane pandemic checks When is this meme going to stop? How is a couple of $1200 checks over the course of 6 months enough to let people buy every home on the market all of the sudden?

nyjah 5y ago
Where I live everyone got money from unemployment and then months later the state sent letters to people about "overpayment". And its for large amounts of money like $20,000+. I have friends and neighbors that took advantage of it. Seems like everyone spent their 'stimmy' on a camper or raising a truck
travoc 5y ago
The US government has made over $3.4 trillion in budgetary outlays in response to the pandemic. It comes in many forms, not just $1,200 checks. $3.4 trillion is a lot of money to add to the economy in 2 years.
xapata 5y ago
The housing market dynamic has been (not enough) building for decades.
YetAnotherNick 5y ago
> couple of $1200 checks 100s of millions of checks, amounting to trillions of dollars. This is economics 101 that directly printing the money increases inflation. These kind of money accumulates in the hands of few and the market had been quick to act on concentrating the $1200 checks.
- phreeza 5y ago
  I'm not saying it's not due to these stimulus measures, but I think the economics 101 lesson is kind of refuted by a decade of quantitative easing, which did not cause significant consumer price inflation. The specifics of where you point the money spigot matter, it's more subtle than print money == inflation in today's highly complex economy.
  - jdhn 5y ago
    This stimulus is different from QE in the sense that it went directly to consumers. QE never went directly to consumers, but instead stayed with banks. Personally, I think you can see QE's inflationary effect in both the stock and housing market, but that's just me.

frankfrankfrank 5y ago

I haven't really kept up, but haven't those essentially stopped now, leaving only regular unemployment? I am curious what that will cause because I have heard conflicting information on whether people saved their money or spent it all, not to mention people who have just stopped paying their rent … a whole other ticking time bomb.

JoeAltmaier 5y ago

Another example of grade-school economics - cherry pick a couple of points and draw a stick figure - proved! Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Or: folks have more money so live healthier, increasing productivity and using fewer healthcare resources, so the economy benefits. It's easy! Just throw out some money-sounding words and make the rest up.

merpnderp 5y ago
No, it's not easy. But we do know that increasing the money supply faster than economic growth creates inflation. We also know that inflation helps the rich and hurts the poor since it inflates asset prices faster than wages. And guess who owns most of the assets.
ZetaZero 5y ago
> Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Only true under certain circumstances. In general, when Demand increases, and Supply doesn't increase to match, prices go up.
deleted 5y ago
[deleted]
simonh 5y ago
That may happen longer term, but the problem is supply at the moment is not able to grow to meet the increased demand. Just look at all the articles about container ships queueing up at ports, and companies unable to hire enough workers, chip shortages brining manufacturing lines to a halt, energy price spikes. There's proving to be a significant drag on capacity at the same time as the burst in demand. So it's not just QE driving this, but it's certainly a factor.
postingawayonhn 5y ago
> Let me try: more money in circulation means sales volume goes up, so prices fall (according to actual economic theory). Not according to any economic theory I've heard of. If consumer incomes rises then the demand curve should shift to the left. This will move the intersection of the supply and demand curves to a point where both quantity supplied and price are higher.