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The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semicon

The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up. It’s possible that the situation will devolve into a wage-price stagflationary cycles similar to what Argentina and other emerging markets have experienced over the decades, but that is not what is happening now.

aortega 5y ago
I'm not and economist, but I think its quite obvious that there is a difference between a localized price spike from a particular asset, another is all assets increasing in price uniformly. The second is not all assets becoming scarce at the same time, but the devaluation of the currency used to measure the assets' price.
- xadhominemx 5y ago
  No, what’s happening now is that real demand is higher than supply across many supply chains. If it was just money supply, there wouldn’t be widespread shortages across virtually every supply chain.
  - leereeves 5y ago
    It doesn't have to be one or the other. It's quite possible to have inflation along with the shortages that are causing price spikes for particular products, like GPUs and cars.
    - xadhominemx 5y ago
      Inflation starting showing up when the supply shortages arose, well after the major waves deficit-funded stimulus ended.
      - aortega 5y ago
        You can't explain inflation as the widespread shortage of everything at the same time.
        xadhominemx 5y ago
        Aggregate demand is very high due to 1) global shift of consumer spend from services to goods, 2) global fiscal stimulus, 3) wealth effect from booming asset valuations (though this should be fading). Global supply is lower than it should be due to 1) low levels of capital investment over the past 3-5 years in several key industries (eg, semiconductors, US shale oil) for idiosyncratic reasons, 2) COVID-related reduction of port and air-transit capacity, 3) overall low levels of commercials capital investment in 2020 due to COVID-related financial prudence, 4) impact of the Ukraine invasion on oil and gas supply
  - aortega 5y ago
    It might be. But also its the same excuse our government gives for prices increases: it's always 'external factors' and never 'we just printed a huge bunch of pesos'. What I think is happening is that there are virtual price-controls and if you implement price-controls to fight inflation, there is only one outcome since it first was done by the Hammurabi code 4000 years ago in Babylon: shortages.
    - xadhominemx 5y ago
      Ok I’m not sure what the excuses the Argentinian government made in the 80’s, but the current widespread shortages are real and they are causing prices to go up.
    - deleted 5y ago
      [deleted]
    - berns 5y ago
      Exactly, just like Biden accusing the meat oligopolies for price hikes. Hey, lets pour another billion to solve the problem. And corporate greed and all that nonsense. It's a carbon copy. Yet many believe it.
walkhour 5y ago
You are simply stating something without backing it by any evidence. How exactly do you know all the money pumped during the pandemic hasn't contributed to the price spikes and that the sole reason is real demand for semiconductors, oil, ... .
- xadhominemx 5y ago
  There is no controversy regarding shortages of semiconductors, logistics capacity, and more recently oil and gas. It’s hard to imagine anyone could be unaware of these issues.
  - walkhour 5y ago
    I'm not denying this, I think supply side shortages tend to produce inflation. Please see my response again. But to clarify, you said: > The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up How do you know the money pumped into the economy hasn't contributed(I'm not saying it's the sole cause) to the price spikes?
    - xadhominemx 5y ago
      Because money supply had the big upward adjustment in 1H2020 and inflation kicked in in 2H21 (same time as the supply shortages), and wage growth is not very high. Money supply growth probably has some impact on deflation not happening two years ago.
      - walkhour 5y ago
        The sum of the money supply in 2H2020 and 1H2021 is similar to the money supply in 1H2020, so I don't think the fact that inflation kicked in 2H2021 makes your case. Also note the money supply was higher in 2H2020 and 1H2021 than in the semesters previous to 1H2020. Besides there's no contradiction in inflation lagging an increase in money supply. In addition, wage growth not being high doesn't prove money supply didn't contribute to inflation. Inflation and wage stagnation can happen. > Money supply growth probably has some impact on deflation not happening two years ago Similarly to my first comment, this needs to be backed, you're simply stating it.

aortega 5y ago

I'm not and economist, but I think its quite obvious that there is a difference between a localized price spike from a particular asset, another is all assets increasing in price uniformly. The second is not all assets becoming scarce at the same time, but the devaluation of the currency used to measure the assets' price.

xadhominemx 5y ago
No, what’s happening now is that real demand is higher than supply across many supply chains. If it was just money supply, there wouldn’t be widespread shortages across virtually every supply chain.
- leereeves 5y ago
  It doesn't have to be one or the other. It's quite possible to have inflation along with the shortages that are causing price spikes for particular products, like GPUs and cars.
  - xadhominemx 5y ago
    Inflation starting showing up when the supply shortages arose, well after the major waves deficit-funded stimulus ended.
    - aortega 5y ago
      You can't explain inflation as the widespread shortage of everything at the same time.
      - xadhominemx 5y ago
        Aggregate demand is very high due to 1) global shift of consumer spend from services to goods, 2) global fiscal stimulus, 3) wealth effect from booming asset valuations (though this should be fading). Global supply is lower than it should be due to 1) low levels of capital investment over the past 3-5 years in several key industries (eg, semiconductors, US shale oil) for idiosyncratic reasons, 2) COVID-related reduction of port and air-transit capacity, 3) overall low levels of commercials capital investment in 2020 due to COVID-related financial prudence, 4) impact of the Ukraine invasion on oil and gas supply
- aortega 5y ago
  It might be. But also its the same excuse our government gives for prices increases: it's always 'external factors' and never 'we just printed a huge bunch of pesos'. What I think is happening is that there are virtual price-controls and if you implement price-controls to fight inflation, there is only one outcome since it first was done by the Hammurabi code 4000 years ago in Babylon: shortages.
  - xadhominemx 5y ago
    Ok I’m not sure what the excuses the Argentinian government made in the 80’s, but the current widespread shortages are real and they are causing prices to go up.
  - deleted 5y ago
    [deleted]
  - berns 5y ago
    Exactly, just like Biden accusing the meat oligopolies for price hikes. Hey, lets pour another billion to solve the problem. And corporate greed and all that nonsense. It's a carbon copy. Yet many believe it.

walkhour 5y ago

You are simply stating something without backing it by any evidence. How exactly do you know all the money pumped during the pandemic hasn't contributed to the price spikes and that the sole reason is real demand for semiconductors, oil, ... .

xadhominemx 5y ago
There is no controversy regarding shortages of semiconductors, logistics capacity, and more recently oil and gas. It’s hard to imagine anyone could be unaware of these issues.
- walkhour 5y ago
  I'm not denying this, I think supply side shortages tend to produce inflation. Please see my response again. But to clarify, you said: > The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up How do you know the money pumped into the economy hasn't contributed(I'm not saying it's the sole cause) to the price spikes?
  - xadhominemx 5y ago
    Because money supply had the big upward adjustment in 1H2020 and inflation kicked in in 2H21 (same time as the supply shortages), and wage growth is not very high. Money supply growth probably has some impact on deflation not happening two years ago.
    - walkhour 5y ago
      The sum of the money supply in 2H2020 and 1H2021 is similar to the money supply in 1H2020, so I don't think the fact that inflation kicked in 2H2021 makes your case. Also note the money supply was higher in 2H2020 and 1H2021 than in the semesters previous to 1H2020. Besides there's no contradiction in inflation lagging an increase in money supply. In addition, wage growth not being high doesn't prove money supply didn't contribute to inflation. Inflation and wage stagnation can happen. > Money supply growth probably has some impact on deflation not happening two years ago Similarly to my first comment, this needs to be backed, you're simply stating it.