4 ms·

Also don't we know in this case that the bank increased the supply by 40% first? Inflation followed, as you would expect when there are drastically more money u

Also don't we know in this case that the bank increased the supply by 40% first? Inflation followed, as you would expect when there are drastically more money units competing for goods and services (combined with fewer goods/services as a result of shut downs). I don't get all the mental gymnastics around this.

kqr 5y ago
Could it be the case that banks end up lending more not only in response to increased prices, but also in when there are expectations of future increased prices? The only mental gymnastics I don't get are the ones where one pretends the market is simple and ultimately controlled by one entity. It's not.
- hnuser847 5y ago
  The base money supply has more than doubled since February 2020, and the M1 money stock has more than quadrupled since then. Any one with half a brain knew the “transitory inflation” claim was pure propaganda.
  - andriesm 5y ago
    exactly. But it has been an all round perfect storm, aided by both circumstance and policy WHILE keeping the money slauces wide open. Money printing is the base driver of inflation. BUT: the best anti-dote to inflation is productivity growth. Biden lifting regulations and taxes are both well known enemies of productivity growth. On top of this you had supply chain disruptions... meaning fewer good and services chased by an avalanche of money... laws of supply and demand gaurantees price pressure. It was not hard to predict. The fed played word games with the word transitory because they hoped to psychologically influence peoples economic behaviour to mitigate additional feedback loops I wager.
    - imtringued 5y ago
      Or maybe the bond market doesn't care about current consumer inflation? I honestly stopped giving a damn about inflation because it is all pointless. Everyone cares about an irrelevant number while getting screwed by the properties of money that they think they enjoy.
      - andriesm 5y ago
        You say the bond market doesn't care about inflation ? Well, it should, especially if it isn't transitory. If you really think one should not care about inflation, then one of us will be proven wrong. (I have put options - i.e. money where my mouth is)

kqr 5y ago

Could it be the case that banks end up lending more not only in response to increased prices, but also in when there are expectations of future increased prices? The only mental gymnastics I don't get are the ones where one pretends the market is simple and ultimately controlled by one entity. It's not.

hnuser847 5y ago
The base money supply has more than doubled since February 2020, and the M1 money stock has more than quadrupled since then. Any one with half a brain knew the “transitory inflation” claim was pure propaganda.
- andriesm 5y ago
  exactly. But it has been an all round perfect storm, aided by both circumstance and policy WHILE keeping the money slauces wide open. Money printing is the base driver of inflation. BUT: the best anti-dote to inflation is productivity growth. Biden lifting regulations and taxes are both well known enemies of productivity growth. On top of this you had supply chain disruptions... meaning fewer good and services chased by an avalanche of money... laws of supply and demand gaurantees price pressure. It was not hard to predict. The fed played word games with the word transitory because they hoped to psychologically influence peoples economic behaviour to mitigate additional feedback loops I wager.
  - imtringued 5y ago
    Or maybe the bond market doesn't care about current consumer inflation? I honestly stopped giving a damn about inflation because it is all pointless. Everyone cares about an irrelevant number while getting screwed by the properties of money that they think they enjoy.
    - andriesm 5y ago
      You say the bond market doesn't care about inflation ? Well, it should, especially if it isn't transitory. If you really think one should not care about inflation, then one of us will be proven wrong. (I have put options - i.e. money where my mouth is)