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> Nothing on the supply side comes close to a sudden injection of 7 trillion dollars in the economy. I think you should look into commodity prices. I'm surpris

> Nothing on the supply side comes close to a sudden injection of 7 trillion dollars in the economy. I think you should look into commodity prices. I'm surprised at how many people aren't paying attention to the global game on this. We're literally going to starve out other countries by outbidding them. That's what's going on here. > As for everyone else experiencing inflation, guess what, they blame it on us. No we don't because we know it's a material problem. That's "common knowledge" in Europe. The story here, and as far as I can see, everywhere is "producer costs."

alangibson 4y ago
This. I shut down a side business late last year because steel prices were already up 50% in Europe. Most don't pay attention to commodity prices because they aren't exposed to them. There's also much willful ignorance and motivated reasoning. I've seen people in the US blame it on Build Back Better spending, seemingly unaware that BBB didn't pass.
- guerrilla 4y ago
  Yep, that's it right there and most people don't know how much electricity goes into aluminum either, for example. Or that long term fixed prices contracts rose 30% last week while already on the order of 5 times higher than usual. This speaks to the risk being priced in about the fact that things probably aren't going to get better soon and could get worse. > I've seen people in the US blame it on Build Back Better spending, seemingly unaware that BBB didn't pass. Ouch.
credit_guy 4y ago
> I think you should look into commodity prices. I'm surprised at how many people aren't paying attention to the global game on this. Let's look then at that. Russia produces about 4 billion barrels of oil per year. The various sanctions reduced that, but not by much. I've seen estimates of 10% to 20% decline, although I have also seen lower estimates. The war has been going on for about 4 months, so at a very conservative 20% output decline it follows that they produced 270 million barrels less than last year. At $100 a barrel, that's a shock of less than $30 billion on the supply side. It's much less than that though, since other producers have increased their output. $30 billion shock on the supply side vs $7 trillion on the demand side...
- guerrilla 4y ago
  You missed every other commodity, including a giant one, natural gas where electricity prices have double even in the most self-sufficient European countries and we're at the point of needing to bring back coal in Germany. Then there's the grain, knock on effects on steel and aluminum, nickel, the blocked ports, and on and on. It's a disaster.

alangibson 4y ago

This. I shut down a side business late last year because steel prices were already up 50% in Europe. Most don't pay attention to commodity prices because they aren't exposed to them. There's also much willful ignorance and motivated reasoning. I've seen people in the US blame it on Build Back Better spending, seemingly unaware that BBB didn't pass.

guerrilla 4y ago
Yep, that's it right there and most people don't know how much electricity goes into aluminum either, for example. Or that long term fixed prices contracts rose 30% last week while already on the order of 5 times higher than usual. This speaks to the risk being priced in about the fact that things probably aren't going to get better soon and could get worse. > I've seen people in the US blame it on Build Back Better spending, seemingly unaware that BBB didn't pass. Ouch.

credit_guy 4y ago

> I think you should look into commodity prices. I'm surprised at how many people aren't paying attention to the global game on this. Let's look then at that. Russia produces about 4 billion barrels of oil per year. The various sanctions reduced that, but not by much. I've seen estimates of 10% to 20% decline, although I have also seen lower estimates. The war has been going on for about 4 months, so at a very conservative 20% output decline it follows that they produced 270 million barrels less than last year. At $100 a barrel, that's a shock of less than $30 billion on the supply side. It's much less than that though, since other producers have increased their output. $30 billion shock on the supply side vs $7 trillion on the demand side...

guerrilla 4y ago
You missed every other commodity, including a giant one, natural gas where electricity prices have double even in the most self-sufficient European countries and we're at the point of needing to bring back coal in Germany. Then there's the grain, knock on effects on steel and aluminum, nickel, the blocked ports, and on and on. It's a disaster.