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Why, when presented with an article like this, do we discuss the content of it, but seldom why does it exist in the first place? Why would this newspaper want

Why, when presented with an article like this, do we discuss the content of it, but seldom why does it exist in the first place? Why would this newspaper want to say these things precisely now? What prompted the editor to pick this story and this angle? Nobody finds that question interesting?

lamontcg 5y ago
Making everyone very, very concerned about inflation and starting to talk about it. The USA could probably use a decade of double digit inflation (with coupled wage-inflation so a nice wage-price-spiral) to adjust asset values and wealth disparity back down to more reasonable levels. It would come with economic stagnation but that will be better than the alternative. What all the talk about inflation is doing is getting people very worried about any uptick in inflation and prepared for austerity measures to prevent it, which will probably lead to a depressive spiral and lancing the long-term bubble that we're in. If the "Great Resignation" trend of workers having power over wages continues, then I suspect you're going to see a large degree of inflation panic pushing for austerity. I don't think it'll land this year, though, this is just the warm up act. The Fed policy changes this year will likely be insufficient and its more likely that this time next year it really starts to ratchet up (and I don't know what'll happen in the midterms exactly other than the Republicans will make gains which makes austerity even more likely). Things will likely be getting exciting again in 2024. Sooner or later we're likely to have a post-pandemic party for a bit, then I think policymakers will start to seriously panic about inflation and workers demanding raises and drive the economy into a depression. I could be off in the timeframe, but after 2-3 years of workers having negotiating power I think policymakers will start to think that it is intolerable. The inflation messages, though, are clearly the manufacturing of consent for what is likely to come.
- nate_meurer 5y ago
  It all depends on how the pandemic goes. As Bill McBride says over and over, the course of the economy is dependent on the course of the pandemic. https://www.calculatedriskblog.com/2021/10/early-q4-gdp-forecasts-around-5-to-6.html https://www.calculatedriskblog.com/2021/10/early-q4-gdp-fore... I'm particularly interested to see how long supply disruptions in China persist, as effected as they are by China's zero-COVID strategy.
- fuoqi 5y ago
  >The USA could probably use a decade of double digit inflation It's a very thin ice to walk on. High inflation threatens USD's global reserve currency status and it's in addition to using financial control for political pressure of opponents (e.g. threats to ban countries from SWIFT). When (not if) this status will be lost you will get serious additional inflationary pressure from foreign governments and private investors dumping USD-denominated assets. In the best case scenario it will be a prolonged multi-decade process as with GBP, but in the worst case scenario unwinding can be quite fast, especially considering China's reserves (i.e. it can start selling USD-denominated assets as a form of financial attack).
  - lamontcg 5y ago
    I think the depression we hit due to austerity could also severely threaten the global reserve currency status. Although that's another good argument as to why policymakers are going to panic over inflation.
otikik 5y ago
I think you might enjoy this video from Tom Nicholas, "The Myth of a Free Press: Media Bias Explained" https://www.youtube.com/watch?v=v-8t0EfLzQo https://www.youtube.com/watch?v=v-8t0EfLzQo

lamontcg 5y ago

Making everyone very, very concerned about inflation and starting to talk about it. The USA could probably use a decade of double digit inflation (with coupled wage-inflation so a nice wage-price-spiral) to adjust asset values and wealth disparity back down to more reasonable levels. It would come with economic stagnation but that will be better than the alternative. What all the talk about inflation is doing is getting people very worried about any uptick in inflation and prepared for austerity measures to prevent it, which will probably lead to a depressive spiral and lancing the long-term bubble that we're in. If the "Great Resignation" trend of workers having power over wages continues, then I suspect you're going to see a large degree of inflation panic pushing for austerity. I don't think it'll land this year, though, this is just the warm up act. The Fed policy changes this year will likely be insufficient and its more likely that this time next year it really starts to ratchet up (and I don't know what'll happen in the midterms exactly other than the Republicans will make gains which makes austerity even more likely). Things will likely be getting exciting again in 2024. Sooner or later we're likely to have a post-pandemic party for a bit, then I think policymakers will start to seriously panic about inflation and workers demanding raises and drive the economy into a depression. I could be off in the timeframe, but after 2-3 years of workers having negotiating power I think policymakers will start to think that it is intolerable. The inflation messages, though, are clearly the manufacturing of consent for what is likely to come.

nate_meurer 5y ago
It all depends on how the pandemic goes. As Bill McBride says over and over, the course of the economy is dependent on the course of the pandemic. https://www.calculatedriskblog.com/2021/10/early-q4-gdp-forecasts-around-5-to-6.html https://www.calculatedriskblog.com/2021/10/early-q4-gdp-fore... I'm particularly interested to see how long supply disruptions in China persist, as effected as they are by China's zero-COVID strategy.
fuoqi 5y ago
>The USA could probably use a decade of double digit inflation It's a very thin ice to walk on. High inflation threatens USD's global reserve currency status and it's in addition to using financial control for political pressure of opponents (e.g. threats to ban countries from SWIFT). When (not if) this status will be lost you will get serious additional inflationary pressure from foreign governments and private investors dumping USD-denominated assets. In the best case scenario it will be a prolonged multi-decade process as with GBP, but in the worst case scenario unwinding can be quite fast, especially considering China's reserves (i.e. it can start selling USD-denominated assets as a form of financial attack).
- lamontcg 5y ago
  I think the depression we hit due to austerity could also severely threaten the global reserve currency status. Although that's another good argument as to why policymakers are going to panic over inflation.

otikik 5y ago

I think you might enjoy this video from Tom Nicholas, "The Myth of a Free Press: Media Bias Explained" https://www.youtube.com/watch?v=v-8t0EfLzQo https://www.youtube.com/watch?v=v-8t0EfLzQo