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You left out the underlying factor, which was Covid stimulus including the grants and loans that were written off. Money was being created and then funneled to
by starfallg 4y ago
You left out the underlying factor, which was Covid stimulus including the grants and loans that were written off. Money was being created and then funneled to the sectors of the economy which were not productive (such as commercial real estate) creating stress in the sectors that were. This will inevitably cause inflation with the conditions 2 & 3 you listed.
Housing is due for a correction as prices are at such high multiples of average wage. The wage price growth we see now is just the first step in bringing the ratio down.
- willnonya 4y agoFor some reason people keep skipping over this part...
- mjevans 4y agoIgnored, not forgot. It'd be like 4 or 5 on the list at least, and was a 'One Time' (spread across 3 or so events within about a year) tax holiday like effect. The timing was, maybe not the best, but I've yet to see a compelling explanation for how it would have an overall effect on __long term__ inflation.
- starfallg 4y agoI'm not just talking about government spending, but central bank intervention as well. It's in the trillions - https://www.bloomberg.com/graphics/2021-coronavirus-global-debt/ https://www.bloomberg.com/graphics/2021-coronavirus-global-d...