3 ms·

the elephant in the room (that is really overlooked in these discussions) is that a lot of the current inflation is not coming from money policies but rather fr

by Tarsul 5y ago

the elephant in the room (that is really overlooked in these discussions) is that a lot of the current inflation is not coming from money policies but rather from supply side issues. E.g. gas and oil due to the ukraine war (also wheat, nickel etc.), less microchips from china due to its handling of covid (lockdowns) and the change in consumerism due to covid which resulted in more demand for things like bicycles, office hardware for home office, baking machines etc. etc. So why is this supply side aspect often overlooked? Not so much because it is not known but rather because a lot of crisis handling in the last decades came through to the central banks and thus monetary policy. However, this can only be one aspect. We need more classical invention from governments wrt taxes, subventions etc. So, basically, what nearly every economic problem is about: inequality and reallocation of resources.

sjmm1989 5y ago
> is that a lot of the current inflation is not coming from money policies but rather from supply side issues. The caveat to this argument is that supply side issues only affect certain portions of the economy. Printing money affects all of it, no matter what. This is why it's often the sole thing looked at, because while supply side issues do cause problems, they can be avoided entirely by finding a new supplier. You can't however, avoid the money that was already printed. You can try to get the politicians to avoid the printer, but good luck. So in regards to me for instance, supply issues with many of the grains out there just doesn't affect me. Why? I don't use them. I have no need for them anymore for the most part. Anything they might contribute towards my lifestyle is so insignificant that I can literally say I don't need grains. So that means when there is shortages of these grains and the rest of you are clamoring for them; I won't be. And when the prices of these grains go up and you are all having to pay for them; I won't be. Therefore, the inflation to costs of grains, doesn't affectt me. At least, not directly. Indirectly it may affect me, like an employer deciding they don't need that many employees when they have to pay X amount more for the bread that often just gets thrown away due to mold. Yes, that scenario could actually happen in a real world situation. If food stuffs are becoming more expensive, the boss is going to cut costs in other ways, or find new ways to gain more money. Possibly both. So. Supply side isn't false, but it's not the end all and be all like you saying with your complaining about inequality and reallocation of resources. The reality is that up until very recently; there was no need to readjust our supply lines. It has nothing to do with whatever fantastical idea you have cooking up in your head there, because ultimately I am correct in saying that you all don't need to have everything. Not every single thing that exists on this planet, needs to be yours. Or anyone's for that matter. This is part of why I brought up grains. They are an item that lots of people use; but not everyone actually technically needs it. There are ways to get around using those grains, or avoiding them entirely without issue. So a question to you would be this. If I am not getting my 'fair share' of grain, am I being made unequal? How so? I don't use them. Perhaps I could trade them with someone who does, sure. But perhaps they don't have something I want. Trade it for money you say? Okay, sure; but your society is automatically delegitimized on the grounds of equality then; since you can never truly make people equal through money. Someone will always be able to hold onto more of it than others can. Unless you make that illegal... which would make you the problem in the eyes of everyone who holds any sort of money. See. It's not about 'supply lines'. It's simply just about people being people and thinking they need to have everything at every god damn moment in time, and nothing less. Here's the truth of it. NONE OF YOU NEED: 1. Avocadoes. These are supporting Cartels now down south, so you shouldn't be buying them from there anymore anyways, if you are a logical person that is... (I know this one might trigger some people, but that's kinda the point. You don't actually need this food in many countries it doesn't grow naturally in. There are other foods folks.) 2. A wide variety of specialty grains. These are often ridiculously expensive to transport and ship around, because even when processed this stuff gets heavy. Most of the cost attached to these things is all the processing done to them. This is still yet ignoring some main grains like wheat, oats, barley and even rice or corn. (Yes, these last two are technically grains.) Even if we only ever used the mainstays, and avoided all the 'special' ones, we would still be spending far too much money on keeping this supply chain running as it does. Meanwhile, every town and city could have their own local farms churning out the actual amounts of grain and flour that people actually need. With a cap and trade system attached to this, you can effectively keep these items price values normalized. Thus increasing the affordability for anyone who might want these things. 3. Imported foods in general, though not all. This one is tricky, but much like the specialty grains and avocadoes; there are plenty of foods that we don't really actually need to import. We could grow them here instead via interesting methods to replicate the climate they want. (Where ever 'here' is for you, etc.) Basically all the same things apply. The more these things are travelling or being processed to get to your mouth; the more they are going to cost. And notice I haven't even began starting to talk about Meat yet? There is a reason for that. It's the same reason you use for your own comment. Veggies and other non-meat products are often overlooked by people who focus too fiercely on meat. Those same people often don't realize that many of the products we feed these animals, are NOT the same products we feed ourselves. We don't give them the best cobs of corn. We don't give them the nicest grains and greens. We give them sileage instead. (rotted/fermented grains/greens) We give them the cobs of corn that people won't buy. We give them everything we won't use, because it turns what is still food to them but waste to us into more food for us. But they ignore all of that, due to their own biases. And it takes people like me who see both sides of this issue for what they are, and call you all out on it. So, Tarsul. It's not a allocation problem. It's not even an equality problem. Yes we could do better on those things; but they aren't the source of the problem. The fact of the matter is that when you increase the total amount of money flowing through the system, you get a variety of effects that have to do with it. 1. The greedy see a way to get more money. They charge more, since there is more. If supply happens to be lower than demand, then they make even more money through doing this. But they do this regardless. In normal times, we often just call this 'passing on the buck'. That term applies to a few situations really. 2. Governments often give that printed money to all the wrong people in the hopes that it will trickle down through economic activity. And in some regards they are correct. It will trickle down, somewhat. But trickle is definitely the right word in regards to the speed of which it changes hands. It's slow, because as I said earlier about money; those who have it will generally find ways to keep it longer. Longer than they should be, or ever should have been able to since it wasn't properly earned, but given. 3. Since that money isn't free even when printed; it affects the total worth of our dollar to boot. Between the automatic inflationary effects felt, and the interest the government will need to pay back to the banks they printed it through; this just increases the speed of which that inflation occurs. Between lowering the worth of the dollar in general, plus the increase of money supply overall thus lowering the worth of the dollar even further; supply side issues are just not that big a concern when it comes to dealing with inflation. The only time they truly become a concern is when legitimate demand overpowers supply. Note I say legitimate, and not just demand. The key difference here being the point of much of what I have said up til now about supply side issues. We just don't actually need many of those things people want. Like it or not, there are other options. Sometimes better options. In regards to global supply lines, there are other options if governments were willing to make use of them. But they generally aren't. And then there comes the final point to this all... Governments aren't in charge of absolutely everything, and that's probably a good thing; but right now it's not so much. Why? Because the private companies that don't want to change appropriately are being the hold backs in regards to supply lines. And that right there is the only reason your comment has any validity whatsoever. Literally. Businesses of all sorts need to get their act together, or step out of the system entirely. Governments need to get their act together as well, or risk being forced out of the system entirely. The both of them together bungling everything the way they do, is why we are inflating our currencies, but Government has more control over things than businesses usually do; so they get the immediate blame. Always.
- ephbit 5y ago
  I completely agree. > Businesses of all sorts need to get their act together, or step out of the system entirely. Governments can enforce this. But whether they do, depends upon (in democratic countries) people/voters wanting them to enforce. > The both of them together bungling everything the way they do, is why we are inflating our currencies, but Government has more control over things than businesses usually do; As I see it, there's a lid on how much governments can do. It's their voters. Voters have conflicting opinions (within an individual person) and are not honest to themselves about or aware of their priorities. Example: voters (as employees) want a big pay check from a big corp near them .. on the other hand they want protection from the environment being polluted. What do they want more, probably the former.
xadhominemx 5y ago
It’s a combination of supply side issues and demand which remains heavily tilted towards goods (vs services)
walkhour 5y ago
It's funny that you think supply shortages are being overlooked. It seems to me a whole camp of economists thinks it's the sole cause of inflation. And then there's another whole camp that thinks pumping money into the economy is the sole cause, or at least orders of magnitude more important than any other cause.

by Tarsul 5y ago

sjmm1989 5y ago

> is that a lot of the current inflation is not coming from money policies but rather from supply side issues. The caveat to this argument is that supply side issues only affect certain portions of the economy. Printing money affects all of it, no matter what. This is why it's often the sole thing looked at, because while supply side issues do cause problems, they can be avoided entirely by finding a new supplier. You can't however, avoid the money that was already printed. You can try to get the politicians to avoid the printer, but good luck. So in regards to me for instance, supply issues with many of the grains out there just doesn't affect me. Why? I don't use them. I have no need for them anymore for the most part. Anything they might contribute towards my lifestyle is so insignificant that I can literally say I don't need grains. So that means when there is shortages of these grains and the rest of you are clamoring for them; I won't be. And when the prices of these grains go up and you are all having to pay for them; I won't be. Therefore, the inflation to costs of grains, doesn't affectt me. At least, not directly. Indirectly it may affect me, like an employer deciding they don't need that many employees when they have to pay X amount more for the bread that often just gets thrown away due to mold. Yes, that scenario could actually happen in a real world situation. If food stuffs are becoming more expensive, the boss is going to cut costs in other ways, or find new ways to gain more money. Possibly both. So. Supply side isn't false, but it's not the end all and be all like you saying with your complaining about inequality and reallocation of resources. The reality is that up until very recently; there was no need to readjust our supply lines. It has nothing to do with whatever fantastical idea you have cooking up in your head there, because ultimately I am correct in saying that you all don't need to have everything. Not every single thing that exists on this planet, needs to be yours. Or anyone's for that matter. This is part of why I brought up grains. They are an item that lots of people use; but not everyone actually technically needs it. There are ways to get around using those grains, or avoiding them entirely without issue. So a question to you would be this. If I am not getting my 'fair share' of grain, am I being made unequal? How so? I don't use them. Perhaps I could trade them with someone who does, sure. But perhaps they don't have something I want. Trade it for money you say? Okay, sure; but your society is automatically delegitimized on the grounds of equality then; since you can never truly make people equal through money. Someone will always be able to hold onto more of it than others can. Unless you make that illegal... which would make you the problem in the eyes of everyone who holds any sort of money. See. It's not about 'supply lines'. It's simply just about people being people and thinking they need to have everything at every god damn moment in time, and nothing less. Here's the truth of it. NONE OF YOU NEED: 1. Avocadoes. These are supporting Cartels now down south, so you shouldn't be buying them from there anymore anyways, if you are a logical person that is... (I know this one might trigger some people, but that's kinda the point. You don't actually need this food in many countries it doesn't grow naturally in. There are other foods folks.) 2. A wide variety of specialty grains. These are often ridiculously expensive to transport and ship around, because even when processed this stuff gets heavy. Most of the cost attached to these things is all the processing done to them. This is still yet ignoring some main grains like wheat, oats, barley and even rice or corn. (Yes, these last two are technically grains.) Even if we only ever used the mainstays, and avoided all the 'special' ones, we would still be spending far too much money on keeping this supply chain running as it does. Meanwhile, every town and city could have their own local farms churning out the actual amounts of grain and flour that people actually need. With a cap and trade system attached to this, you can effectively keep these items price values normalized. Thus increasing the affordability for anyone who might want these things. 3. Imported foods in general, though not all. This one is tricky, but much like the specialty grains and avocadoes; there are plenty of foods that we don't really actually need to import. We could grow them here instead via interesting methods to replicate the climate they want. (Where ever 'here' is for you, etc.) Basically all the same things apply. The more these things are travelling or being processed to get to your mouth; the more they are going to cost. And notice I haven't even began starting to talk about Meat yet? There is a reason for that. It's the same reason you use for your own comment. Veggies and other non-meat products are often overlooked by people who focus too fiercely on meat. Those same people often don't realize that many of the products we feed these animals, are NOT the same products we feed ourselves. We don't give them the best cobs of corn. We don't give them the nicest grains and greens. We give them sileage instead. (rotted/fermented grains/greens) We give them the cobs of corn that people won't buy. We give them everything we won't use, because it turns what is still food to them but waste to us into more food for us. But they ignore all of that, due to their own biases. And it takes people like me who see both sides of this issue for what they are, and call you all out on it. So, Tarsul. It's not a allocation problem. It's not even an equality problem. Yes we could do better on those things; but they aren't the source of the problem. The fact of the matter is that when you increase the total amount of money flowing through the system, you get a variety of effects that have to do with it. 1. The greedy see a way to get more money. They charge more, since there is more. If supply happens to be lower than demand, then they make even more money through doing this. But they do this regardless. In normal times, we often just call this 'passing on the buck'. That term applies to a few situations really. 2. Governments often give that printed money to all the wrong people in the hopes that it will trickle down through economic activity. And in some regards they are correct. It will trickle down, somewhat. But trickle is definitely the right word in regards to the speed of which it changes hands. It's slow, because as I said earlier about money; those who have it will generally find ways to keep it longer. Longer than they should be, or ever should have been able to since it wasn't properly earned, but given. 3. Since that money isn't free even when printed; it affects the total worth of our dollar to boot. Between the automatic inflationary effects felt, and the interest the government will need to pay back to the banks they printed it through; this just increases the speed of which that inflation occurs. Between lowering the worth of the dollar in general, plus the increase of money supply overall thus lowering the worth of the dollar even further; supply side issues are just not that big a concern when it comes to dealing with inflation. The only time they truly become a concern is when legitimate demand overpowers supply. Note I say legitimate, and not just demand. The key difference here being the point of much of what I have said up til now about supply side issues. We just don't actually need many of those things people want. Like it or not, there are other options. Sometimes better options. In regards to global supply lines, there are other options if governments were willing to make use of them. But they generally aren't. And then there comes the final point to this all... Governments aren't in charge of absolutely everything, and that's probably a good thing; but right now it's not so much. Why? Because the private companies that don't want to change appropriately are being the hold backs in regards to supply lines. And that right there is the only reason your comment has any validity whatsoever. Literally. Businesses of all sorts need to get their act together, or step out of the system entirely. Governments need to get their act together as well, or risk being forced out of the system entirely. The both of them together bungling everything the way they do, is why we are inflating our currencies, but Government has more control over things than businesses usually do; so they get the immediate blame. Always.

ephbit 5y ago
I completely agree. > Businesses of all sorts need to get their act together, or step out of the system entirely. Governments can enforce this. But whether they do, depends upon (in democratic countries) people/voters wanting them to enforce. > The both of them together bungling everything the way they do, is why we are inflating our currencies, but Government has more control over things than businesses usually do; As I see it, there's a lid on how much governments can do. It's their voters. Voters have conflicting opinions (within an individual person) and are not honest to themselves about or aware of their priorities. Example: voters (as employees) want a big pay check from a big corp near them .. on the other hand they want protection from the environment being polluted. What do they want more, probably the former.

xadhominemx 5y ago

It’s a combination of supply side issues and demand which remains heavily tilted towards goods (vs services)

walkhour 5y ago

It's funny that you think supply shortages are being overlooked. It seems to me a whole camp of economists thinks it's the sole cause of inflation. And then there's another whole camp that thinks pumping money into the economy is the sole cause, or at least orders of magnitude more important than any other cause.