8 ms·
The Fed is about to induce 3 years worth of rising unemployment by their own estimates, so the days of workers not needing to take crap jobs out of desperation
by alangibson 4y ago
The Fed is about to induce 3 years worth of rising unemployment by their own estimates, so the days of workers not needing to take crap jobs out of desperation will soon be at an end.
https://qz.com/2178359/the-fed-predicts-3-years-of-rising-unemployment-as-it-hikes-rates/ https://qz.com/2178359/the-fed-predicts-3-years-of-rising-un...
- ramesh31 4y agoThis is the sad reality. The associated wage stabilization is going to be necessary for us to control inflation. SWEs probably don't need worry about remaining employed, but the days of salary wars will be over.
- alangibson 4y ago> The associated wage stabilization is going to be necessary for us to control inflation. It won't. Everyone involved in business dealing with physical goods knows it's a supply side problem. Fiscal policy will do little to control inflation at this time. The Fed of course knows this.
- mc32 4y agoWe're seeing manufacturers tell their suppliers of JIT to hang on to components because they don't need them right now. So I don't think that's accurate everywhere.
- colinmhayes 4y ago> Fiscal policy will do little to control inflation at this time The Fed has no control over fiscal policy. You mean monetary?
- alangibson 4y agoBuh, yea. Vacation brain...
- mikem170 4y agoHow come Switzerland has only 2.5% year-over-year inflation, less than a third of the U.S. rate? Last I checked there seemed to be some correlation between a country's money printing and current inflation rates. That's not to say that a protion of the current inflation rate is not due to supply consitrictions, but I certainly not assume that is the only factor.
- chickenpotpie 4y ago1) prices were already universally high in Switzerland 2) swiss government regulates the price of healthcare 3) Switzerland uses significantly less fossil fuels and aren't as effected by the war in Ukraine 4) Switzerland passed multiple laws over the past few years to reduce the cost of goods, including banning foreign companies from charging Swiss citizens more
- mywittyname 4y agoThe Swiss Franc has traditionally been a strong currency. Probably the world's strongest. The CHF has gained steadily on the EUR since the pandemic and is up about 10% since a year ago. That alone is going to offset a lot of the inflation.
- TMWNN 4y agoUSD is up 8% versus EUR YTD ($1 = €0.88 then, €0.95 now). US, unlike Europe, does not actually need Russian oil/gas. And yet, US inflation is above the world average (<https://www.barrons.com/articles/inflation-has-become-a-global-problem-where-the-u-s-ranks-51654902581 https://www.barrons.com/articles/inflation-has-become-a-glob...>).
- ajsnigrutin 4y agoBoth US and EU printed huge amounts of money during the last few years, and the swiss, it seems, didn't.
- juve1996 4y agoSupply is only a problem when it can't meet demand. If demand drops then supply stops being a problem.
- corrral 4y agoRising wages are a very small part of cost increases, except for a few things like on-demand quick-response delivery services (food delivery and the like) and even there, fuel costs are a lot of it.
- spamizbad 4y agoah but it will control inflation. So when the bank repossesses your home you can rest easy knowing a gallon of milk is 7 cents cheaper.
- adrianb 4y agoActually controlling inflation means slowing it down. So the gallon of milk will be only 7 cents more expensive than last month, not 70 cents.
- dehrmann 4y ago> when the bank repossesses your home Most homeowners have been in their homes for a while, refinanced, and have benefited from a fixed payment for their home while wages have risen with inflation.
- aaomidi 4y agoWe’re also living in a volatile time. It might end up meaning a potential civil war is a lot more likely. Desperation creates extremism. I don’t think the US is prepared for the monster it may unleash.
- nebula8804 4y agoHave you seen how obese we are? Only civil war happening will be for the last packet of Schezuan Sauce at Mcdonalds.
- anigbrowl 4y agoYou don't have to be that fit to pull a trigger. Conversely, look at all the wars that continue to happen in places with severe food insecurity. In theory starving people shouldn't be able to fight, in practice those most willing to fight get enough of the limited food supply to keep fighting.
- MaxHoppersGhost 4y agoCivil war? That’s ridiculous. Please turn off Fox/CNN.
- scollet 4y agoThe only people who cry "civil war" are the people wishing for it. Are you on the right side?
- mc32 4y agoThose idiots! Everyone and their mother knew that printing money since 2008 was going to blow up one day. Technology and unsubstantiated sectors allowed them to print without repercussions for a while and the administration and them also tried to fool people into believing the inflation was transitory... Reckless idiots. And now wage labor is the one to suffer most. 4TT in spending for BBB? Uhhuh! Even Yellen said it was crazy.
- pbourke 4y agoBBB wasn’t enacted, though? Are you thinking of the infrastructure package?
- alangibson 4y agoIt's not the money supply. It's a supply side problem due to Corona shutdowns. All the Fed is about to do is induce a bunch of unemployment.
- mc32 4y agoThey primed the pump, stimulated the economy, people had a bunch of money to spend, no where to put it. But aside from that, we're seeing MFGs tell their suppliers to slow their parts deliveries as demand is cooling. Their hands are in this. Corona has a role too, but so does the Fed and the admin. If instead of Biden and it were the Repubs, or, god forbid, Trump, imagine the headlines and finger pointing. we'd be getting --they'd probably be overshooting with their blaming, but we'd definitely see more blame at the foot of that administration and the Fed.
- deleted 4y ago[deleted]
- native_samples 4y agoIt's both. The money supply grew enormously to fund the Corona shutdowns. You can see it clearly on a graph of M2. https://fred.stlouisfed.org/series/WM2NS https://fred.stlouisfed.org/series/WM2NS Such a fast increase in such a short amount of time is extremely unusual, perhaps unprecedented. There's nothing even remotely close to that instant increase since the dataset begins at the start of the 1980s. And then the COVID jump didn't only make a huge increase by itself, but the slope of the graph permanently increased. It's basic economics that if you do that to the money supply you will get a massive jump in inflation.
- onlyrealcuzzo 4y agoThe Fed has shown they cannot plan 3 years in the future. The odds they won't find an excuse to reverse course within 3 years seems low. They talked about reducing the balance sheet for almost a decade and barely made a dent before more than doubling it during the Pandemic. I will be shocked if in 5 years the Fed's balance sheet isn't substantially higher than it is now.
- hotpotamus 4y agoI've also found it quite hard to predict things, especially about the future. So I have a hard time being mad at the fed on that account.
- formercoder 4y agoIf anyone that worked at the fed could predict the future, they wouldn’t work at the fed.
- dhosek 4y agoThe future is notoriously difficult to predict.
- Victerius 4y agoThe dark side clouds everything. Impossible to see, the future is.
- ineedasername 4y agoWe should focus on easier tasks and build up to it. First we should try to predict the past accurately. Once we're comfortable with that maybe we can move on to predicting the present.