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> since it seems it's been absorbed perfectly by the global economy. So that's why we're getting 8-9% inflation rates? Because of the perfect absorption?
by soperj 4y ago
> since it seems it's been absorbed perfectly by the global economy.
So that's why we're getting 8-9% inflation rates? Because of the perfect absorption?
- belltaco 4y agoPart of it is oil and gas supply going down because of war and since producing anything requires energy, prices are going to go up regardless of the money supply.
- hutzlibu 4y agoYeah but it does not look like the war is going away anytime soon. In case you missed it, russia partly mobilised today. So parent seems right refuting this claim: > since it seems it's been absorbed perfectly by the global economy.
- soperj 4y agoInflation was 8.5% before the war started, it's now at 8.3%. I don't think your premise holds.
- slowhand09 4y agoUh no. Oil and gas supply went down due to presidential mandates. Biden's “pause” on federal oil and gas leasing and drilling permits. And any new permits that might be approved on public lands had royalties increased from 12.5% to 18.75%. A 6.25% increase on production.
- SideQuark 4y agoYou can look at oil prices when the war started and see the jump. There was no such jump at any announcement of Biden. The evidence is clear and easily checked.
- behaveEc0n00 4y agoGreed seems to explain it easily enough. The macro-economy is solely for the wealthy and when they need a billion or more to see a return on a billion or more, shrinkflation and price increases go up; hard to make a billion back on long time scales at 2010 prices. I’m not saying they intentionally operate on that philosophy. I’m saying reliance on data trends means they prioritize responding to data regardless of the externalities to the masses. Only the rich can afford assets so assets are priced for the rich.
- gamegoblin 4y agoAre periods of low inflation thus caused by elites being less greedy?
- behaveEc0n00 4y agoYes. Powell is on record saying he wants the public to save and not trade on the market. He wants bonds to go up. He wants salaries to stop going up. If everyone is flush in assets from having cash to spend it fucks up the game for establishment elites. He’s keeping the public out of the way of elites. Banks are raising savings account rates to keep cash stashed. VCs are scaling back. Prices on say, homes will crash, rates will be too high for average people, elites build property management portfolios and expand their rent seeking. The recent era of spread the wealth has been put on pause while the asset class shores up public agency that was getting away from it by creating too many elites. If everyone is an elite the current elites have no power. That’s the simple game they’re playing, leveraging technical indirection to obfuscate.
- alexb_ 4y agoThat's not how any of this works. Yes, the fed sometimes wants the economy to slow. This is not because of some global conspiracy to make poor people poor, it's because if they don't now they are putting it off to be much, much worse in the future. It's letting off steam so you don't explode. Interest rates rise to try and combat inflation because if you don't it leaves people starving. Rates should have gone up years ago, but a stubborn fed kept putting it off (and COVID didn't help either). The Fed does not benefit from everyone being poor. And I'm someone who thinks cynically all the time, check my post history, but this is just uninformed.
- arcticbull 4y agoInflation is not the change in size of the money supply. Inflation the broad-based change of purchasing power of the dollar by proxy of a basket of goods and services. This is a function of many, many things - cultural norms, commodity prices, labor supply, fiscal policy, supply chain efficiency, interest rates and yes, to a degree, monetary base.
- jtbayly 4y agoIt’s complicated, therefore supply doesn’t matter for money, only demand? I think you’ll need to do a better job convincing me than that.
- arcticbull 4y agoI'm not convincing you of anything, I'm sharing that your definition of inflation is not the definition generally accepted. Money supply growth is not inflation. Inflation is a broad-based reduction in purchasing power caused by any number of things. By definition. Here's why. A 50% sales tax would be inflationary without changing the money supply. Conversely, a trillion dollar coin minted and put into a vault wouldn't have any inflationary effect whatsoever because placing it into the vault has a commensurate reduction in velocity. The idea that 'more money' necessarily immediately means each unit is worth less doesn't stand up to any scrutiny and many counterexamples exist all over the world - and at home. Just look at Japan's monetary base expansion since the 90s [1], while inflation was dead flat zero [2]. Your model is too simplistic which is why it is not generally accepted. [1] https://fred.stlouisfed.org/series/MYAGM2JPM189S https://fred.stlouisfed.org/series/MYAGM2JPM189S [2] https://fred.stlouisfed.org/series/JPNCPIALLMINMEI https://fred.stlouisfed.org/series/JPNCPIALLMINMEI
- jtbayly 4y agoNobody is claiming that inflation is only caused by printing money. You’re straw-manning. What we’re saying is that everybody knows supply and demand affects money, also. And if you’d like examples of hyperinflation from over-supply of money, you can just look around.
- oldgradstudent 4y ago> So that's why we're getting 8-9% inflation rates? Because of the perfect absorption? Not to mention the massive asset price inflation.