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The Fed's contribution is small. What an be done avoiding dramatic intervention re: monetary policy, working to unclog ports, fix supply chains and shore up dom

The Fed's contribution is small. What an be done avoiding dramatic intervention re: monetary policy, working to unclog ports, fix supply chains and shore up domestic manufacturing of silicon for next time. And potentially leverage the defense production act to make more oil. Then sit back and wait as it blows over. It's already blowing over, prices are stabilizing. Month over month 0.3% increase in CPI is 3.6% annualized inflation.

UncleOxidant 5y ago
> working to unclog ports, fix supply chains and shore up domestic manufacturing of silicon Much of this is outside of the purview of the US president. These are areas where the private sector has to take the lead. AFAICT there have been efforts to increase domestic manufacturing of semiconductors - Intel is taking a big lead here, but it's going to take at least a couple of years (probably closer to 3 or 4) to get these new fabs online. There's not much a US president can do about that. And much of what he could/can do is limited by congress passing laws. > The Fed's contribution is small. It's not. ZIRP has had a huge impact on this inflation and fueled lots of market speculation both in housing and the stock market (not to mention crypto). With interest rates closer to their historical mean this speculation wouldn't have happened.
- arcticbull 5y ago
  Again your speculation about low interest rates is unfounded. Housing prices are driven by zoning as evidenced by the Japan housing CPI being dead flat with similar interest rate policies. Housing prices across the US on an inflation adjusted $/sqft basis are the same as they were in the 70s. Outside metros the average new house is twice as big; and inside councils refuse to allow supply to meet demand - these are both zoning issues. There aren’t really “historical average” interest rates, they’ve been going down continuously for like 40 years. Crypto is the same kind of speculation that drew folks to beanie babies. The entire crypto world market cap is like 2/3 of apple, it’s really not a big thing.
  - UncleOxidant 5y ago
    Historically the mean rate on a 30 year mortgage is right around 7%. We've been under that for a good 20 years now and we've been way under that for a good dozen years now. > they’ve been going down continuously for like 40 years. Cycles. They go down... they go up. I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation. > Japan housing CPI being dead flat with similar interest rate policies Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation.
    - arcticbull 5y ago
      > Cycles. They go down... they go up. They do but the cardinal directionality has been down and to the right. > Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation. Totally! What you're describing there is the equilibrium of supply and demand. In their case, demand went down. In our case, demand is going up and we're refusing to add supply. It's the same thing. Or at least, two sides of the same coin. We're both arguing that housing prices are fundamentally - primarily - driven by supply and demand of housing, not supply of money. > I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation. This is where we disagree! We should federalize zoning rules yesterday. The federal government has the right to do this, for instance Chicago residents ability to install satellite dishes is already governed by federal law. [1] Time to stop obstructionist city councils from the top and maximize the freedom of individuals to build housing as they see fit. [1] https://www.chicagotribune.com/news/ct-xpm-2005-03-06-0503060482-story.html https://www.chicagotribune.com/news/ct-xpm-2005-03-06-050306...
      - UncleOxidant 5y ago
weezin 5y ago
The month over month was 1.2% though? And .3% month over month is 4% annualized because of compounding. and 1.2% is 15% annualized inflation so not slowing at all. edit: my bad 3.66% my calculator rounded to 4.

UncleOxidant 5y ago

> working to unclog ports, fix supply chains and shore up domestic manufacturing of silicon Much of this is outside of the purview of the US president. These are areas where the private sector has to take the lead. AFAICT there have been efforts to increase domestic manufacturing of semiconductors - Intel is taking a big lead here, but it's going to take at least a couple of years (probably closer to 3 or 4) to get these new fabs online. There's not much a US president can do about that. And much of what he could/can do is limited by congress passing laws. > The Fed's contribution is small. It's not. ZIRP has had a huge impact on this inflation and fueled lots of market speculation both in housing and the stock market (not to mention crypto). With interest rates closer to their historical mean this speculation wouldn't have happened.

arcticbull 5y ago
Again your speculation about low interest rates is unfounded. Housing prices are driven by zoning as evidenced by the Japan housing CPI being dead flat with similar interest rate policies. Housing prices across the US on an inflation adjusted $/sqft basis are the same as they were in the 70s. Outside metros the average new house is twice as big; and inside councils refuse to allow supply to meet demand - these are both zoning issues. There aren’t really “historical average” interest rates, they’ve been going down continuously for like 40 years. Crypto is the same kind of speculation that drew folks to beanie babies. The entire crypto world market cap is like 2/3 of apple, it’s really not a big thing.
- UncleOxidant 5y ago
  Historically the mean rate on a 30 year mortgage is right around 7%. We've been under that for a good 20 years now and we've been way under that for a good dozen years now. > they’ve been going down continuously for like 40 years. Cycles. They go down... they go up. I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation. > Japan housing CPI being dead flat with similar interest rate policies Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation.
  - arcticbull 5y ago
    > Cycles. They go down... they go up. They do but the cardinal directionality has been down and to the right. > Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation. Totally! What you're describing there is the equilibrium of supply and demand. In their case, demand went down. In our case, demand is going up and we're refusing to add supply. It's the same thing. Or at least, two sides of the same coin. We're both arguing that housing prices are fundamentally - primarily - driven by supply and demand of housing, not supply of money. > I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation. This is where we disagree! We should federalize zoning rules yesterday. The federal government has the right to do this, for instance Chicago residents ability to install satellite dishes is already governed by federal law. [1] Time to stop obstructionist city councils from the top and maximize the freedom of individuals to build housing as they see fit. [1] https://www.chicagotribune.com/news/ct-xpm-2005-03-06-0503060482-story.html https://www.chicagotribune.com/news/ct-xpm-2005-03-06-050306...
    - UncleOxidant 5y ago

weezin 5y ago

The month over month was 1.2% though? And .3% month over month is 4% annualized because of compounding. and 1.2% is 15% annualized inflation so not slowing at all. edit: my bad 3.66% my calculator rounded to 4.