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> In this case, extreme levels of COVID-related fiscal and monetary stimulus pumped money into households and investment markets, contributing to inflation and

> In this case, extreme levels of COVID-related fiscal and monetary stimulus pumped money into households and investment markets, contributing to inflation and driving speculation in financial assets This is common wisdom but I wonder how true it is. A majority of Americans live paycheck to paycheck [1] so it stands to reason the stimulus paid about a month's rent and groceries. I'm having trouble understanding how this stimulus is responsible for today's inflation. [1] What percent of Americans live paycheck to paycheck? https://www.google.com/search?q=what+percent+of+american+live+paycheck+to+paycheck https://www.google.com/search?q=what+percent+of+american+liv...

__john 4y ago
Consider one aspect of "stimulus" is that a bunch of people suddenly no longer had to worry about rent. All that money they would have gone to rent instead when to Dogecoin and GME.
- sp527 4y ago
  This is not how money works and I've seen so many people make deeply flawed arguments because they misunderstand it. Money flows continuously and is only at rest when it's held in vehicles like bank accounts, money market funds, and bank reserves. When you increase the money supply dramatically, that money is in circulation, and various factors determine its average velocity. There's also a multiplier effect in the form of debt created on top of base money. But the key point is that almost all money is continuously flowing through an economy. Incidentally, disincentivizing people from leaving money at rest for too long is precisely why it's important for a currency to be inflationary.
  - cortesoft 4y ago
    > Money flows continuously and is only at rest when it's held in vehicles like bank accounts and money market funds. It isn’t at rest when it is in bank accounts, either. A large percentage of that is loaned out.
    - sp527 4y ago
      > also a multiplier effect in the form of debt created on top of base money
  - __john 4y ago
    > why it's important for a currency to be inflationary Money is created when people take out loans right? (like for a home or car, or when a buisness takes out a loan for capex) So if the population contracts (i.e. the boomers start dying) doesn't that mean there should a contraction of money supply since fewer people will exist to take out loans?
    - sp527 4y ago
      I think what you're asking is whether money can be destroyed and the answer is yes. For example, if the Fed allows debt instruments it holds to be paid down. What matters, of course, is the relative rate of money creation vs money destruction.
  - walleeee 4y ago
    Aren't these points orthogonal? Yes, money flows when it's not parked somewhere, but when a lot of people use extra cash for unproductive speculation it tends to make current or future recessions worse. What is needed is deliberate investment of time, money and effort building a prosperous future, not throwing surplus income at shiny things and hoping it magically multiplies.
    - sp527 4y ago
      > Aren't these points orthogonal? No they are not orthogonal. You seem to still not understand. What happens to the money used to buy an unproductive speculative asset? The answer is it keeps moving and, in fact, on average it probably continues to move very quickly so long as it's stuck in speculation limbo. Hence, on average, it doesn't stay trapped in speculation limbo for very long. It's a brief detour, not a destination.
      - walleeee 4y ago
        Ok, can you help me understand? Are you saying direct stimulus is not a big factor in the recent inflation? If not, what is? And would you say it's a good thing for the circulation you describe to float free of productive activity? I would say, sure, for a little while and in moderate amounts. But if allowed to expand without bound and continue indefinitely it risks untethering minds and markets from the material foundations that make it all possible in the first place
        sp527 4y ago
        I look at money as renewable energy and yes you absolutely would prefer that energy be channeled into more productive uses. Whatever would maximize collective human flourishing. But the overarching point I'm trying to make here is that rapidly expanding the money supply will cause problems. Congress and the Fed pumped money into the economy with reckless abandon and now we're paying the price.
        jjeaff 4y ago
superb-owl 4y ago
If you want some quantitative evidence, look at the M2 money supply over time, and the kink in the graph as COVID stimulus went out. https://fred.stlouisfed.org/series/M2NS https://fred.stlouisfed.org/series/M2NS
dinobones 4y ago
I don't think stim money was that big of a deal, but PPP fraud was: https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664 https://www.nbcnews.com/politics/justice-department/biggest-... "Small business owner receives $2m in PPP, then uses it to buy a second house" is a common anecdote.
- postpawl 4y ago
  The amount spent on the PPP and stimulus to individuals was dwarfed by the 450 billion the fed leveraged into 2.3 trillion to loan to banks and buy mortgage backed securities + bonds: https://apnews.com/article/municipal-bonds-jerome-powell-financial-markets-virus-outbreak-business-8508af5848939f715622a71a44d3af20 https://apnews.com/article/municipal-bonds-jerome-powell-fin...
  - lumost 4y ago
    It really makes you wonder where all that money went. Monetary Theory tends to treat central bank interest rates and government taxes/borrowing as two sides of the same coin. For various reasons the US has leaned more heavily on the interest rate manipulation over fiscal policy for the last ~30 years - but I do wonder if we're missing an accountability aspect of interest rate based stimulus.
- donw 4y ago
  I think the biggest damage came from effectively zero-interest loans to those with means: high net-worth individuals, financial institutions, etc. Insanely magnified purchasing power for those with access. Consider housing. Blackrock and the Google Squad hoovered up a ton of real estate and converted them into rentals. Normal people can't offer 20-40% above asking for a home, so they were priced completely out of the market. Starter homes have doubled or tripled in price over the past four years. Salaries have not risen to match. Same is true for many other goods, and when combined with deliberate supply chain sabotage at the behest of the ruling class, effectively turned a significant chunk of the population into serfs overnight. The knock-on effects of this aren't going to be pleasant. People take pride in their work when they have a future to build towards. That no longer true for younger folks, or even a lot of people in their prime working years, so everybody is just sort of... phoning it in. Imagine you're a high school graduate today. All you can see down the road for you is an either an infinite series of "gigs", or, if you're lucky, the luxurious serfdom of corporate servitude. In the latter case, you still don't earn enough to ever own property, but you get free food and access to approved activities from your masters in the company hierarchy.
adamsiem 4y ago
$1200 stimmy check was not the big deal. Receiving $600/week in addition to unemployment for 24+ weeks was. Many hourly workers were making more money than working when you combine $600/wk and unemployment at 30-60% of their regular paycheck. This dramatically stimulated the economy. And businesses. And then there are all the PPP funds that equates to 50-75% of a companies annual payroll. Also dramatically affected companies, and gave a false sense of security - preventing innovating into ‘the new normal.’
- arcticbull 4y ago
  I mean $600/week on top of unemployment ($40-450) is still poverty line wages for a family depending on where you live. [1] These people weren't exactly rushing out and buying Krug and caviar with their $40K/yr pre-tax wage. That's what some tech workers get every month. [1] https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/prior-hhs-poverty-guidelines-federal-register-references/2021-poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
  - smelendez 4y ago
    No but a lot of people did end up saving and having more money to spend. As you say, basically $40k/person, which is more than a lot of people make (think especially of families with part time workers, like students or parents). And with reduced expenses for many: no commute, no other work-related expenses like clothes, often no childcare costs, less eating out and entertainment.
- _uy6i 4y ago
  And then potentially earning non-w2 money money on top of that (Uber, babysitting, etc)
  - SV_BubbleTime 4y ago
    Uber is probably W9 Contractor or something, right? But yea, we had people work construction and dock work for cash.
formerkrogemp 4y ago
It depends on how you mean paycheck to paycheck. A third of Americans roughly rent their homes. Slightly more than half spend more than 30% and growing of their income on housing. Wages have been flat or declining for about forty years in many industries. Roughly half of Americans own equity or stocks of some form through brokerage or retirement accounts, but that could mean as little as one share. Most people don't have money for an emergency $1000 expense. I would attribute inflation to some combination of the "silver tsunami" of retiring baby boomers, the Russian war of aggression upon Ukraine, the lasting disruption of the COVID pandemic, profit seeking from corporations, over reliance upon JIT inventories and underinvestment into infrastructure for decades, and the usual rent seeking. Some blame may be laid upon the Fed for keeping rates so low for so long, but there were probably sound political and economic reasons for doing so. However, I'm not economist, just an accountant who studied economics for awhile. > I'm having trouble understanding how this stimulus is responsible for today's inflation. The stimulus was paid out more to businesses than to citizens. The airline needed bailouts, paycheck protection program, etc. Defense spending is always increasing. Child tax credits and an expansion of snap/wic benefits and stimulus checks reduced child poverty for a time, but we're regressing in the US now as far as child poverty and malnourishment rates are concerned. I don't suppose I covered everything, and I am just recapping from memory here.
camhart 4y ago
> People earning between $35,000 and $75,000 annually traded stocks about 90% more than the week prior to receiving their stimulus check. https://www.cnbc.com/2020/05/21/many-americans-used-part-of-their-coronavirus-stimulus-check-to-trade-stocks.html https://www.cnbc.com/2020/05/21/many-americans-used-part-of-...
- bombcar 4y ago
  That could be an increase from 1% to 1.9% However I don't doubt many considered the stimulus payments "found or free" money and basically gambled with them.
Aspos 4y ago
All the money given to people living paycheck to paycheck quickly converted into goods and services which generated profit for those who don't live paycheck to paycheck. All the rain poured onto a city ends up in the sea, all the money pumped into the system eventually ends up in real estate and capital markets.
- labrador 4y ago
  This makes sense but shouldn't the result have been easily foreseen? I don't believe that those who manage the money across two administrations are totally incompetent, although I'm sure some will say that.
  - Aspos 4y ago
    tbf the bulk of the money was pumped in during one administration and the other one had no choice but to continue some of the handouts.
  - cykros 4y ago
    The insiders buy on the way up, and dump on the retail investors before things come crashing back down (who are drawn in by the reports of how much money is being made on Wall St. Not all of them execute flawlessly on this of course, but the bulk of who ends up losing out in this situation won't be those professionals, but rather the retail investors, or those who experienced higher costs on the way up in their 401k's and other retirement accounts and will be selling them at lower prices as they enter retirement (or otherwise will be experiencing likely a few years of sub-optimal growth). A major issue here is that while normally those approaching retirement are advised to diversify from equities into a fairly sizeable portion of fixed income, ultimately, many moved away from this strategy over the last few years due to the Fed's bond buying program, which ultimately drove up the price of bonds as well, keeping yields low, so the usual ability to see at least some growth without taking on the risk associated with equity markets wasn't nearly as available as it has been in the past. Those who didn't adjust, meanwhile, are taking major hits, as their bond holdings have seen value plummet amid the Fed backing off of the bond buying program, and are stuck between selling at a loss or holding low yielding bonds. As for the managers of those mutual funds...well, most of those funds don't have them anymore, since the Vanguard revolution initiated by Jack Bogle, as the bulk of the industry is passive mutual funds, which simply track their associated index. They're cheap (in terms of expense ratio), but offer nobody steering the ship to react in the face of turbulence...always a trade off to bear in mind.
_uy6i 4y ago
Most Americans live paycheck to paycheck because they are out spending their money (bars, restaurants, gas commuting, going to the movies etc. = discretionary spending), but because of lockdowns they weren’t able to do that (yes some of that money got spent on other things (computer monitors and streaming services)) but the us savings rate has never been higher[1], and the wait staff that were out of jobs made more money not working than when they did! https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
tmaly 4y ago
Look at size of total stimulus and compare it to how much actually went out directly to people as checks.
readthenotes1 4y ago
It's having the money PLUS not having the goods because of broken supply chains (China lockdowns and shipping through Port of L. A) followed by doubling of fuel costs which were in part driven by huge surge in demand after lockdowns ended plus no new supply of oil refineries because, in part, the war on fossil fuels in the US and elsewhere and all fed by our expectations of higher prices that allow the greedy corporations to raise prices with less fear.
sofixa 4y ago
> This is common wisdom but I wonder how true it is Anyone ignoring the effects of the Russian invasion of Ukraine is missing a big part of the picture IMHO. That's the main driver behind higher food and fuel prices (there's shortages of them in some places, which drives prices up and worries markets even in places which aren't impacted - e.g. Indonesia banned the export of palm oil due to rising oils prices at home due to the lack of sunflower and similar oils normally exported from Ukraine and Russia). Then add in the supply chain issues due to the pandemic and the war (a big chunk of the world's heavy duty air cargo aircraft are out of commission), and why are people focusing only on the money supply?
- deleted 4y ago
  [deleted]
- cykros 4y ago
  Let's be fully clear about this; while Russia's invasion has some direct effects, the bulk of the economic effects are from the response to its invasion, primarily in the form of sanctions on fuel and petroleum derived fertilizers, rather than following as an immediate effect caused by Russia's actions. The matter of whether or not the response is justified is another matter, but to clearly understand the economic situation it must be recognized that a choice was made regarding a response, and that choice is what has left us with these repercussions.
  - sofixa 4y ago
    Isn't the Russian blockade of Ukrainian exports of foodstuffs of a much higher impact? Are there even sanctions on "sanctions on fuel and petroleum derived fertilizers"? I was under the impression that nothing food related was sanctioned.
    - WastingMyTime89 4y ago
      Russia is not really blocking exports. Each side accuses the other of being responsible. Ukraine put mines around deep water ports but say they can’t be removed because Russia would then use its fleet. As with every war, nothing is as simple as it seems in Ukraine.

__john 4y ago

Consider one aspect of "stimulus" is that a bunch of people suddenly no longer had to worry about rent. All that money they would have gone to rent instead when to Dogecoin and GME.

sp527 4y ago
This is not how money works and I've seen so many people make deeply flawed arguments because they misunderstand it. Money flows continuously and is only at rest when it's held in vehicles like bank accounts, money market funds, and bank reserves. When you increase the money supply dramatically, that money is in circulation, and various factors determine its average velocity. There's also a multiplier effect in the form of debt created on top of base money. But the key point is that almost all money is continuously flowing through an economy. Incidentally, disincentivizing people from leaving money at rest for too long is precisely why it's important for a currency to be inflationary.
- cortesoft 4y ago
  > Money flows continuously and is only at rest when it's held in vehicles like bank accounts and money market funds. It isn’t at rest when it is in bank accounts, either. A large percentage of that is loaned out.
  - sp527 4y ago
    > also a multiplier effect in the form of debt created on top of base money
- __john 4y ago
  > why it's important for a currency to be inflationary Money is created when people take out loans right? (like for a home or car, or when a buisness takes out a loan for capex) So if the population contracts (i.e. the boomers start dying) doesn't that mean there should a contraction of money supply since fewer people will exist to take out loans?
  - sp527 4y ago
    I think what you're asking is whether money can be destroyed and the answer is yes. For example, if the Fed allows debt instruments it holds to be paid down. What matters, of course, is the relative rate of money creation vs money destruction.
- walleeee 4y ago
  Aren't these points orthogonal? Yes, money flows when it's not parked somewhere, but when a lot of people use extra cash for unproductive speculation it tends to make current or future recessions worse. What is needed is deliberate investment of time, money and effort building a prosperous future, not throwing surplus income at shiny things and hoping it magically multiplies.
  - sp527 4y ago
    > Aren't these points orthogonal? No they are not orthogonal. You seem to still not understand. What happens to the money used to buy an unproductive speculative asset? The answer is it keeps moving and, in fact, on average it probably continues to move very quickly so long as it's stuck in speculation limbo. Hence, on average, it doesn't stay trapped in speculation limbo for very long. It's a brief detour, not a destination.
    - walleeee 4y ago
      Ok, can you help me understand? Are you saying direct stimulus is not a big factor in the recent inflation? If not, what is? And would you say it's a good thing for the circulation you describe to float free of productive activity? I would say, sure, for a little while and in moderate amounts. But if allowed to expand without bound and continue indefinitely it risks untethering minds and markets from the material foundations that make it all possible in the first place
      - sp527 4y ago
        I look at money as renewable energy and yes you absolutely would prefer that energy be channeled into more productive uses. Whatever would maximize collective human flourishing. But the overarching point I'm trying to make here is that rapidly expanding the money supply will cause problems. Congress and the Fed pumped money into the economy with reckless abandon and now we're paying the price.
        jjeaff 4y ago

superb-owl 4y ago

If you want some quantitative evidence, look at the M2 money supply over time, and the kink in the graph as COVID stimulus went out. https://fred.stlouisfed.org/series/M2NS https://fred.stlouisfed.org/series/M2NS

dinobones 4y ago

I don't think stim money was that big of a deal, but PPP fraud was: https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664 https://www.nbcnews.com/politics/justice-department/biggest-... "Small business owner receives $2m in PPP, then uses it to buy a second house" is a common anecdote.

postpawl 4y ago
The amount spent on the PPP and stimulus to individuals was dwarfed by the 450 billion the fed leveraged into 2.3 trillion to loan to banks and buy mortgage backed securities + bonds: https://apnews.com/article/municipal-bonds-jerome-powell-financial-markets-virus-outbreak-business-8508af5848939f715622a71a44d3af20 https://apnews.com/article/municipal-bonds-jerome-powell-fin...
- lumost 4y ago
  It really makes you wonder where all that money went. Monetary Theory tends to treat central bank interest rates and government taxes/borrowing as two sides of the same coin. For various reasons the US has leaned more heavily on the interest rate manipulation over fiscal policy for the last ~30 years - but I do wonder if we're missing an accountability aspect of interest rate based stimulus.
donw 4y ago
I think the biggest damage came from effectively zero-interest loans to those with means: high net-worth individuals, financial institutions, etc. Insanely magnified purchasing power for those with access. Consider housing. Blackrock and the Google Squad hoovered up a ton of real estate and converted them into rentals. Normal people can't offer 20-40% above asking for a home, so they were priced completely out of the market. Starter homes have doubled or tripled in price over the past four years. Salaries have not risen to match. Same is true for many other goods, and when combined with deliberate supply chain sabotage at the behest of the ruling class, effectively turned a significant chunk of the population into serfs overnight. The knock-on effects of this aren't going to be pleasant. People take pride in their work when they have a future to build towards. That no longer true for younger folks, or even a lot of people in their prime working years, so everybody is just sort of... phoning it in. Imagine you're a high school graduate today. All you can see down the road for you is an either an infinite series of "gigs", or, if you're lucky, the luxurious serfdom of corporate servitude. In the latter case, you still don't earn enough to ever own property, but you get free food and access to approved activities from your masters in the company hierarchy.

adamsiem 4y ago

$1200 stimmy check was not the big deal. Receiving $600/week in addition to unemployment for 24+ weeks was. Many hourly workers were making more money than working when you combine $600/wk and unemployment at 30-60% of their regular paycheck. This dramatically stimulated the economy. And businesses. And then there are all the PPP funds that equates to 50-75% of a companies annual payroll. Also dramatically affected companies, and gave a false sense of security - preventing innovating into ‘the new normal.’

arcticbull 4y ago
I mean $600/week on top of unemployment ($40-450) is still poverty line wages for a family depending on where you live. [1] These people weren't exactly rushing out and buying Krug and caviar with their $40K/yr pre-tax wage. That's what some tech workers get every month. [1] https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/prior-hhs-poverty-guidelines-federal-register-references/2021-poverty-guidelines https://aspe.hhs.gov/topics/poverty-economic-mobility/povert...
- smelendez 4y ago
  No but a lot of people did end up saving and having more money to spend. As you say, basically $40k/person, which is more than a lot of people make (think especially of families with part time workers, like students or parents). And with reduced expenses for many: no commute, no other work-related expenses like clothes, often no childcare costs, less eating out and entertainment.
_uy6i 4y ago
And then potentially earning non-w2 money money on top of that (Uber, babysitting, etc)
- SV_BubbleTime 4y ago
  Uber is probably W9 Contractor or something, right? But yea, we had people work construction and dock work for cash.

formerkrogemp 4y ago

It depends on how you mean paycheck to paycheck. A third of Americans roughly rent their homes. Slightly more than half spend more than 30% and growing of their income on housing. Wages have been flat or declining for about forty years in many industries. Roughly half of Americans own equity or stocks of some form through brokerage or retirement accounts, but that could mean as little as one share. Most people don't have money for an emergency $1000 expense. I would attribute inflation to some combination of the "silver tsunami" of retiring baby boomers, the Russian war of aggression upon Ukraine, the lasting disruption of the COVID pandemic, profit seeking from corporations, over reliance upon JIT inventories and underinvestment into infrastructure for decades, and the usual rent seeking. Some blame may be laid upon the Fed for keeping rates so low for so long, but there were probably sound political and economic reasons for doing so. However, I'm not economist, just an accountant who studied economics for awhile. > I'm having trouble understanding how this stimulus is responsible for today's inflation. The stimulus was paid out more to businesses than to citizens. The airline needed bailouts, paycheck protection program, etc. Defense spending is always increasing. Child tax credits and an expansion of snap/wic benefits and stimulus checks reduced child poverty for a time, but we're regressing in the US now as far as child poverty and malnourishment rates are concerned. I don't suppose I covered everything, and I am just recapping from memory here.

camhart 4y ago

> People earning between $35,000 and $75,000 annually traded stocks about 90% more than the week prior to receiving their stimulus check. https://www.cnbc.com/2020/05/21/many-americans-used-part-of-their-coronavirus-stimulus-check-to-trade-stocks.html https://www.cnbc.com/2020/05/21/many-americans-used-part-of-...

bombcar 4y ago
That could be an increase from 1% to 1.9% However I don't doubt many considered the stimulus payments "found or free" money and basically gambled with them.

Aspos 4y ago

All the money given to people living paycheck to paycheck quickly converted into goods and services which generated profit for those who don't live paycheck to paycheck. All the rain poured onto a city ends up in the sea, all the money pumped into the system eventually ends up in real estate and capital markets.

labrador 4y ago
This makes sense but shouldn't the result have been easily foreseen? I don't believe that those who manage the money across two administrations are totally incompetent, although I'm sure some will say that.
- Aspos 4y ago
  tbf the bulk of the money was pumped in during one administration and the other one had no choice but to continue some of the handouts.
- cykros 4y ago
  The insiders buy on the way up, and dump on the retail investors before things come crashing back down (who are drawn in by the reports of how much money is being made on Wall St. Not all of them execute flawlessly on this of course, but the bulk of who ends up losing out in this situation won't be those professionals, but rather the retail investors, or those who experienced higher costs on the way up in their 401k's and other retirement accounts and will be selling them at lower prices as they enter retirement (or otherwise will be experiencing likely a few years of sub-optimal growth). A major issue here is that while normally those approaching retirement are advised to diversify from equities into a fairly sizeable portion of fixed income, ultimately, many moved away from this strategy over the last few years due to the Fed's bond buying program, which ultimately drove up the price of bonds as well, keeping yields low, so the usual ability to see at least some growth without taking on the risk associated with equity markets wasn't nearly as available as it has been in the past. Those who didn't adjust, meanwhile, are taking major hits, as their bond holdings have seen value plummet amid the Fed backing off of the bond buying program, and are stuck between selling at a loss or holding low yielding bonds. As for the managers of those mutual funds...well, most of those funds don't have them anymore, since the Vanguard revolution initiated by Jack Bogle, as the bulk of the industry is passive mutual funds, which simply track their associated index. They're cheap (in terms of expense ratio), but offer nobody steering the ship to react in the face of turbulence...always a trade off to bear in mind.

_uy6i 4y ago

Most Americans live paycheck to paycheck because they are out spending their money (bars, restaurants, gas commuting, going to the movies etc. = discretionary spending), but because of lockdowns they weren’t able to do that (yes some of that money got spent on other things (computer monitors and streaming services)) but the us savings rate has never been higher[1], and the wait staff that were out of jobs made more money not working than when they did! https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT

tmaly 4y ago

Look at size of total stimulus and compare it to how much actually went out directly to people as checks.

readthenotes1 4y ago

It's having the money PLUS not having the goods because of broken supply chains (China lockdowns and shipping through Port of L. A) followed by doubling of fuel costs which were in part driven by huge surge in demand after lockdowns ended plus no new supply of oil refineries because, in part, the war on fossil fuels in the US and elsewhere and all fed by our expectations of higher prices that allow the greedy corporations to raise prices with less fear.

sofixa 4y ago

> This is common wisdom but I wonder how true it is Anyone ignoring the effects of the Russian invasion of Ukraine is missing a big part of the picture IMHO. That's the main driver behind higher food and fuel prices (there's shortages of them in some places, which drives prices up and worries markets even in places which aren't impacted - e.g. Indonesia banned the export of palm oil due to rising oils prices at home due to the lack of sunflower and similar oils normally exported from Ukraine and Russia). Then add in the supply chain issues due to the pandemic and the war (a big chunk of the world's heavy duty air cargo aircraft are out of commission), and why are people focusing only on the money supply?

deleted 4y ago
[deleted]
cykros 4y ago
Let's be fully clear about this; while Russia's invasion has some direct effects, the bulk of the economic effects are from the response to its invasion, primarily in the form of sanctions on fuel and petroleum derived fertilizers, rather than following as an immediate effect caused by Russia's actions. The matter of whether or not the response is justified is another matter, but to clearly understand the economic situation it must be recognized that a choice was made regarding a response, and that choice is what has left us with these repercussions.
- sofixa 4y ago
  Isn't the Russian blockade of Ukrainian exports of foodstuffs of a much higher impact? Are there even sanctions on "sanctions on fuel and petroleum derived fertilizers"? I was under the impression that nothing food related was sanctioned.
  - WastingMyTime89 4y ago
    Russia is not really blocking exports. Each side accuses the other of being responsible. Ukraine put mines around deep water ports but say they can’t be removed because Russia would then use its fleet. As with every war, nothing is as simple as it seems in Ukraine.