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> Raising wages with Consumer Price Index (CPI) is dangerous, because it could cause spiraling inflation! Conclusion is correct, but you're missing initial dri
by everybodyknows 4y ago
> Raising wages with Consumer Price Index (CPI) is dangerous, because it could cause spiraling inflation!
Conclusion is correct, but you're missing initial driving factors:
1. Supply-side price shocks in oil, gas, food, manufactures (China zero-COVID policy)
2. Reduced financial subsidies to US: less world appetite for U.S. treasury bonds
3. Fed easing revealed now as pushed too far, given the world's run of very bad luck: COVID followed by war in Ukraine.
So, the world has gotten poorer, the "pie" smaller, and most of us are going to be getting smaller slices for some time.
As much as I'd like to see all the world pie's assets now held in the form of say, mega yachts seized and converted to floating medical clinics run by Medecin San Frontiere, I wouldn't be scanning the news for such a headline.
- AstralStorm 4y ago1. There were no important supply side shocks. There were "expected" shocks and a bunch of panic buying. This was converted into an excuse for price rises with concomitant profit increases. If it were a supply side shock, you'd see profit rates also falling or staying the same, after profiteering is done. 2. US literally tanked every currency of every economy due to fiscal manipulation, economies which were unable to compensate. China and EU mostly managed. (Where Euro is used, that is.) Everyone else got extra smashed. 3. Fed only defrauded other economies, but USA is also pretty hit by the greed.