11 ms·
Seems like both post-COVID supply chain effects and the Ukraine war are fairly logical temporary effects that aren't representing fundamental limits on supply.
by zmmmmm 4y ago
Seems like both post-COVID supply chain effects and the Ukraine war are fairly logical temporary effects that aren't representing fundamental limits on supply. Hence measures taken should be seen in the light of managing a short term, temporary effect on supply of energy and labor with the goal of ensuring inflation doesn't become self-reinforcing - rather than modulating the medium to longer term economy.
- JohnJamesRambo 4y agohttps://www.bridgewater.com/its-mostly-a-demand-shock-not-a-supply-shock-and-its-everywhere https://www.bridgewater.com/its-mostly-a-demand-shock-not-a-... I've always found this insightful.
- readthenotes1 4y agoFrom Oct 2021, when the bureaucrats in charge were claiming inflation was transitory...
- oneoff786 4y agoSo where would inflation be if there was no war in Ukraine and a massive energy crisis Several months later? Do you think the sudden loss of energy, which affects our ability to produce everything, has had a negligible effect on inflation?
- readthenotes1 4y agoIt has had a measurable effect on inflation. However it is not the most significant impact on it. You can look at the rates of inflation before the war started and see how high they were. If you want to adjust for reality, then find the actual rate of increase for rent and home ownership during the time frame. The US data lags considerably.
- oneoff786 4y agoDodging the question though. How much of an effect? Because I’m inclined to guess upwards of 3 points. Because high energy costs affect everything. And if that’s true… not really much of a story.
- readthenotes1 4y agoI wasn't trying to dodge the question, I was figuring that you could actually look up the inflation rate in February of 2022 in compare it to April 2022 for yourself.
- za3faran 4y agoSupply chain effects don't seem to have a fundamental reason not to get resolved. What about the Ukraine war? What's the endgame and resolution on the horizon?
- culopatin 4y agoAnd another 2008 like Fed opening the dam too early and closing it too late.
- aetherson 4y agoIt's not clear to me that either China will have abandoned lockdowns nor that the Ukraine war will be over in a year. Like, maybe they will! But it seems plausible that they won't. I agree that neither are likely to last a decade or anything. But I'm not sure what anything we're doing right now is predicated on the idea that they will last a decade.
- Mikeb85 4y agoThe problem is that those aren't the reasons for the inflation. The increase in the money supply is. But crafty politicians have blamed everything else in order to try stay in power. The measures they're taking, increasing interest rates for a prolonged period of time, are to correct the inflation caused by the expansion in the money supply. They just can't admit it.
- skellington 4y agoThat's a childish view of how money works and what causes inflation.
- xyzzyz 4y agoI agree, it is childish thing to tell the truth, when lying and obfuscating is more conducive to gain and preserve power.
- abhinai 4y agoWhat is the adult view?
- tshaddox 4y agoProbably that it’s more complicated than that.
- abhinai 4y agoIs it really? If we agree that there was a huge increase in money supply and that supply of goods stayed the same or decreased then it follows logically that more money would be needed to acquire same quantity of goods. Seems fairly simple!
- voisin 4y agoChildren would tell it like it is, or rather like you just have. Adults would pretend it is much more complicated and cannot possibly be their fault.