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It's mainly a supply issue. There is also a demand component but supply is the main bottleneck causing this sticky inflation. Originally they thought the supply

It's mainly a supply issue. There is also a demand component but supply is the main bottleneck causing this sticky inflation. Originally they thought the supply issues would improve by now but it just can't catch up for some reason. So they need to force demand down until supply catches up. China also isn't helping with their foolish lockdown policies that are severely affecting supply chains. Guess this is what happens when Western lawmakers sell out domestic manufacturing because some dickhead MBAs said it would be "efficient".

ttul 4y ago
And Xi cannot change China’s zero-Covid policy, because, to do so, he would have to lose face by admitting it’s a failure. He would rather have the population endure continual hell. It’s such a tragedy for China.
- Leader2light 4y ago
- satao 4y ago
  Faillure how? The west let millions of people die.
  - pfortuny 4y ago
    The west preferred freedom to life. There are many many historical figuresbwho died for that idea.
  - dougmwne 4y ago
    I think this is a really legitimate question with a complex answer. At the end of the day, Covid is one of the most contagious diseases out there. It has terrible impacts, but China’s policy is like trying to hold back the rising ocean with ever higher sea walls. The cost will continue to mount, the global isolation will continue to take its toll and one day the waters will break through the walls anyway.
  - thehappypm 4y ago
    China is just kicking the can down the road. They have poor population immunity and the virus is endemic in most of the world. Eventually it’ll sneak in
- marricks 4y ago
  Wait, how is it a failure? I get that their cases have doubled in recent months, but that doubling is from 250 cases a week to 500[1] and their highest spike was a brief 5,000 number of cases in April. Whereas the US, with a much smaller population, has been rocking at least 10,000 cases a day (and far more deaths) all year, with almost all of May to July having more than 100,000 cases a day. [1] https://www.worldometers.info/coronavirus/country/china/ https://www.worldometers.info/coronavirus/country/china/ [2] https://covid.cdc.gov/covid-data-tracker/#trends_dailycases_select_00 https://covid.cdc.gov/covid-data-tracker/#trends_dailycases_...
  - chasd00 4y ago
    It's a failure in that COVID will never be zero. The policy is pushing on a string, there will be lockdowns forever if the policy remains in place.
    - marricks 4y ago
      Okay, but an aspirational "Zero-COVID" policy seems to be working out better than the US's "burrying-our-heads-in-the-sand" policy. I get it may have an impact on economy but, seriously, how can people value human lives so little?
      - Auracle 4y ago
        “Better” is a vague term. We could reduce a ridiculous number of deaths by reducing the speed limit on all roads and highways to 25mph, but we don’t. The trade off isn’t worth it to most people. Zero COVID policies made some amount of sense when we thought a vaccine that would work really well was around the corner, as the effect on daily life would be temporary.
      - cr1895 4y ago
        > how can people value human lives so little? I would suggest reading up on how the zero COVID approach taken by the Chinese government has impacted its citizens, and how it’s really very much divorced from any pragmatic notion of saving lives.
- lamontcg 4y ago
  What is weird is that he can't just force all the old people to get vaccinated. You'd think that'd be one of the benefits of being an authoritarian, but apparently that'd be touching some kind of political third rail in China. He really is stuck with Zero Covid because China's death rate would still be very high if they drop that and let it rip (Similar to what happened in Hong Kong with Omicron).
mattbrewsbytes 4y ago
Western companies cut costs by moving manufacturing overseas, can you elaborate how lawmakers are impacting that decision making process?
- deleted 4y ago
  [deleted]
ZoomerCretin 4y ago
Housing is also a huge contributor to inflation, and hiking rates kills demand for new construction as effectively as it kills demand for all other housing. They're making the housing crisis worse in the long term, just as they did in 2008.
- hnuser847 4y ago
  It's wild. The Fed brought interest rates down to zero and created a massive asset bubbled fueled by cheap debt. Now they're cranking up interest rates to pop they bubble they created, and we're supposed to applaud them for carefully maintaining "stable prices". All they've done is put us through an economic rollercoaster where most of us ended poorer in the end.
  - chasd00 4y ago
    well don't forget, in 2008/9 they were fighting a deflationary spiral. That was the biggest fear and Bernanke even said he'd drop bags of money from helicopters before getting trapped in that situation. There were lots of voices warning of the inevitability of high inflation but the deflationary conditions soaked it up until now. I think the real problem is the pandemic was not a deflationary situation, we just turned off production quite literally and then increased demand by giving everyone money for not producing anything. /not an economist just a normal everyday guy
    - mitthrowaway2 4y ago
  - mullingitover 4y ago
    The crazy part is that they dropped reserve requirements to zero for banks at the beginning of the pandemic, and for all the hiking of rates the reserve requirements are still at zero. They slammed on the brakes while the other foot is still flooring the gas pedal.
- fleddr 4y ago
teddyh 4y ago
> Guess this is what happens when Western lawmakers sell out domestic manufacturing because some dickhead MBAs said it would be "efficient". One could make a more charitable interpretation than that. It has been an observed strategy of the modern western world to transition from physical labor as an asset to “IP”; i.e. immaterial rights (mostly copyrights and patents), as an asset. One could charitably then guess that law and policy makers might have envisioned the western world as, like Joel Spolsky once said, “a trendy couple sipping Chardonnay in their living room outsourcing everything”¹. Joel was talking about companies, but the analogy can be stretched to entire countries. The strategy didn’t work as well as they hoped, obviously, since IP rights depend on laws, and sovereign nations are ultimately not beholden to laws. The strategy still worked somewhat, only, I think, because a Chinese company can’t just create a popular product and sell it in the west (although they are getting better all the time, like how Amazon is filled to the brim with pseudo-brand junk). There’s something fundamentally missing there, like how hardware companies can’t write good software to save their lives, and mostly vice versa. This fact has allowed the west to cling to the dream of Chardonnay long enough to survive until today, when we can finally see the first really big drawbacks of not having control of your own production and supply chains. 1. https://www.joelonsoftware.com/2001/10/14/in-defense-of-not-invented-here-syndrome/ https://www.joelonsoftware.com/2001/10/14/in-defense-of-not-...
Lionga 4y ago
Well if supply is not coming back the only thing you can and have to reduce is demand. Either via raising interest rates or via runaway, entrenched inflation if you don't raise rates quickly enough. Once you have entrenched inflation you need to raise rates even more if you ever want to get it back under control.
yobbo 4y ago
> It's mainly a supply issue. So there is less milk and bread being sold now than a year ago? Because if it's the same amount of milk and bread for a higher price, then the it's mainly a shift in demand.
- pwinnski 4y ago
  You're picking a subset of even the CPI basket of goods, but still the answer is yes[0]. The linked chart currently only goes to 2021, but 2021 was down almost 13% from 2020, and I have no expectations that 2022 will be any different. The supply chain has stumbled incredibly badly in ways that affect almost everything, including milk and bread--which have to be packaged up and shipped and in the case of bread, contains added ingredient that might themselves be in short supply. 0. https://www.statista.com/statistics/251537/us-milk-sales/ https://www.statista.com/statistics/251537/us-milk-sales/
  - yobbo 4y ago
    To be fair, it looks like a long term decline, with a larger drop between 2018 and 2019. Could be that milk is less and less preferred by consumers. The milk might still be used for cream, cheese, yoghurt, ice cream, protein powder, and so on. According to this, the number of milk cows stays constant: https://www.statista.com/statistics/194934/number-of-milk-cows-in-the-us-since-1999/ https://www.statista.com/statistics/194934/number-of-milk-co...
gggmaster 4y ago
Your are blaming others for your own failure.

ttul 4y ago

And Xi cannot change China’s zero-Covid policy, because, to do so, he would have to lose face by admitting it’s a failure. He would rather have the population endure continual hell. It’s such a tragedy for China.

Leader2light 4y ago
satao 4y ago
Faillure how? The west let millions of people die.
- pfortuny 4y ago
  The west preferred freedom to life. There are many many historical figuresbwho died for that idea.
- dougmwne 4y ago
  I think this is a really legitimate question with a complex answer. At the end of the day, Covid is one of the most contagious diseases out there. It has terrible impacts, but China’s policy is like trying to hold back the rising ocean with ever higher sea walls. The cost will continue to mount, the global isolation will continue to take its toll and one day the waters will break through the walls anyway.
- thehappypm 4y ago
  China is just kicking the can down the road. They have poor population immunity and the virus is endemic in most of the world. Eventually it’ll sneak in
marricks 4y ago
Wait, how is it a failure? I get that their cases have doubled in recent months, but that doubling is from 250 cases a week to 500[1] and their highest spike was a brief 5,000 number of cases in April. Whereas the US, with a much smaller population, has been rocking at least 10,000 cases a day (and far more deaths) all year, with almost all of May to July having more than 100,000 cases a day. [1] https://www.worldometers.info/coronavirus/country/china/ https://www.worldometers.info/coronavirus/country/china/ [2] https://covid.cdc.gov/covid-data-tracker/#trends_dailycases_select_00 https://covid.cdc.gov/covid-data-tracker/#trends_dailycases_...
- chasd00 4y ago
  It's a failure in that COVID will never be zero. The policy is pushing on a string, there will be lockdowns forever if the policy remains in place.
  - marricks 4y ago
    Okay, but an aspirational "Zero-COVID" policy seems to be working out better than the US's "burrying-our-heads-in-the-sand" policy. I get it may have an impact on economy but, seriously, how can people value human lives so little?
    - Auracle 4y ago
      “Better” is a vague term. We could reduce a ridiculous number of deaths by reducing the speed limit on all roads and highways to 25mph, but we don’t. The trade off isn’t worth it to most people. Zero COVID policies made some amount of sense when we thought a vaccine that would work really well was around the corner, as the effect on daily life would be temporary.
    - cr1895 4y ago
      > how can people value human lives so little? I would suggest reading up on how the zero COVID approach taken by the Chinese government has impacted its citizens, and how it’s really very much divorced from any pragmatic notion of saving lives.
lamontcg 4y ago
What is weird is that he can't just force all the old people to get vaccinated. You'd think that'd be one of the benefits of being an authoritarian, but apparently that'd be touching some kind of political third rail in China. He really is stuck with Zero Covid because China's death rate would still be very high if they drop that and let it rip (Similar to what happened in Hong Kong with Omicron).

mattbrewsbytes 4y ago

Western companies cut costs by moving manufacturing overseas, can you elaborate how lawmakers are impacting that decision making process?

deleted 4y ago
[deleted]

ZoomerCretin 4y ago

Housing is also a huge contributor to inflation, and hiking rates kills demand for new construction as effectively as it kills demand for all other housing. They're making the housing crisis worse in the long term, just as they did in 2008.

hnuser847 4y ago
It's wild. The Fed brought interest rates down to zero and created a massive asset bubbled fueled by cheap debt. Now they're cranking up interest rates to pop they bubble they created, and we're supposed to applaud them for carefully maintaining "stable prices". All they've done is put us through an economic rollercoaster where most of us ended poorer in the end.
- chasd00 4y ago
  well don't forget, in 2008/9 they were fighting a deflationary spiral. That was the biggest fear and Bernanke even said he'd drop bags of money from helicopters before getting trapped in that situation. There were lots of voices warning of the inevitability of high inflation but the deflationary conditions soaked it up until now. I think the real problem is the pandemic was not a deflationary situation, we just turned off production quite literally and then increased demand by giving everyone money for not producing anything. /not an economist just a normal everyday guy
  - mitthrowaway2 4y ago
- mullingitover 4y ago
  The crazy part is that they dropped reserve requirements to zero for banks at the beginning of the pandemic, and for all the hiking of rates the reserve requirements are still at zero. They slammed on the brakes while the other foot is still flooring the gas pedal.
fleddr 4y ago

teddyh 4y ago

> Guess this is what happens when Western lawmakers sell out domestic manufacturing because some dickhead MBAs said it would be "efficient". One could make a more charitable interpretation than that. It has been an observed strategy of the modern western world to transition from physical labor as an asset to “IP”; i.e. immaterial rights (mostly copyrights and patents), as an asset. One could charitably then guess that law and policy makers might have envisioned the western world as, like Joel Spolsky once said, “a trendy couple sipping Chardonnay in their living room outsourcing everything”¹. Joel was talking about companies, but the analogy can be stretched to entire countries. The strategy didn’t work as well as they hoped, obviously, since IP rights depend on laws, and sovereign nations are ultimately not beholden to laws. The strategy still worked somewhat, only, I think, because a Chinese company can’t just create a popular product and sell it in the west (although they are getting better all the time, like how Amazon is filled to the brim with pseudo-brand junk). There’s something fundamentally missing there, like how hardware companies can’t write good software to save their lives, and mostly vice versa. This fact has allowed the west to cling to the dream of Chardonnay long enough to survive until today, when we can finally see the first really big drawbacks of not having control of your own production and supply chains. 1. https://www.joelonsoftware.com/2001/10/14/in-defense-of-not-invented-here-syndrome/ https://www.joelonsoftware.com/2001/10/14/in-defense-of-not-...

Lionga 4y ago

Well if supply is not coming back the only thing you can and have to reduce is demand. Either via raising interest rates or via runaway, entrenched inflation if you don't raise rates quickly enough. Once you have entrenched inflation you need to raise rates even more if you ever want to get it back under control.

yobbo 4y ago

> It's mainly a supply issue. So there is less milk and bread being sold now than a year ago? Because if it's the same amount of milk and bread for a higher price, then the it's mainly a shift in demand.

pwinnski 4y ago
You're picking a subset of even the CPI basket of goods, but still the answer is yes[0]. The linked chart currently only goes to 2021, but 2021 was down almost 13% from 2020, and I have no expectations that 2022 will be any different. The supply chain has stumbled incredibly badly in ways that affect almost everything, including milk and bread--which have to be packaged up and shipped and in the case of bread, contains added ingredient that might themselves be in short supply. 0. https://www.statista.com/statistics/251537/us-milk-sales/ https://www.statista.com/statistics/251537/us-milk-sales/
- yobbo 4y ago
  To be fair, it looks like a long term decline, with a larger drop between 2018 and 2019. Could be that milk is less and less preferred by consumers. The milk might still be used for cream, cheese, yoghurt, ice cream, protein powder, and so on. According to this, the number of milk cows stays constant: https://www.statista.com/statistics/194934/number-of-milk-cows-in-the-us-since-1999/ https://www.statista.com/statistics/194934/number-of-milk-co...

gggmaster 4y ago

Your are blaming others for your own failure.