5 ms·
Markets don't arbitrarily inflate prices across asset classes (stocks, crypto, commodities, real estate). Classifying widespread worldwide inflation as energy c
by silentsea90 4y ago
Markets don't arbitrarily inflate prices across asset classes (stocks, crypto, commodities, real estate). Classifying widespread worldwide inflation as energy cost inflation OR profiteering is (subjectively) an excuse for policy failure. Single family home owners in San Diego don't collude with condo owners in Vietnam. They do respond to bidders outbidding each other, flush with cash from asset values rising as a consequence of money printing worldwide. The core reason is money printing. The rest is noise. See charts for Fed balance sheet, M1 and M2 money supply for 10 years worth of printing in a year. The Cantillon effect makes people close to the money spigot richer at the expense of the masses.
The Fed knows it too, else QT and interest rate hikes wouldn't be used as weapons against inflation. Political messaging is oriented around not taking responsibility and blaming the pandemic, supply chain issues, Ukraine war etc. These reasons do play a role to be clear, but not to the extent that $ printing does.
- ameister14 4y agoThe proximate cause might be money printing, but the policy failures go way deeper than that to the cause of a hyper-concentrated economy.
- silentsea90 4y agoPlease expand
- ameister14 4y agoWell, the Massachusetts Fed found that pass-throughs are 25% higher in a highly concentrated market, that these price increases last for longer, and that industries in the US are 50% more concentrated than they were in 2005. https://www.bostonfed.org/publications/current-policy-perspectives/2022/cost-price-relationships-in-a-concentrated-economy.aspx https://www.bostonfed.org/publications/current-policy-perspe... So essentially, in more concentrated markets cost shocks are more likely to result in extended periods of inflation. Why are things more concentrated? A lot of reasons, but a big one is that there were almost no effective antitrust actions for decades, and courts weakened the ability of the DOJ and FTC to enforce competitive guidelines. At the same time, Congress weakened the regulatory controls.
- nonethewiser 4y agoAgree with everything except the US “fanning” the war in Ukraine. In what sense? Is Ukraine fanning the war?
- silentsea90 4y agoI removed this sentence as it is subjective and distracts from the original point. That said, the US supplies Ukraine with weapons and Intel, instead of making strong efforts to bring all parties to the negotiating table. China is now supplying weaponry to Russia. This is escalatory and takes us further from peaceful resolution. Of course, I don't have any insider information so this opinion is weakly held
- mschuster91 4y ago> instead of making strong efforts to bring all parties to the negotiating table Putin literally said there are no negotiations possible. The only way to force Putin to the negotiation table is to crush the Russian forces.
- silentsea90 4y agoMaybe, maybe not. Crushing Russian forces helps sell weapons and also helps take down an adversary while having Ukraine fight the war. The incentives behind blowing up the pipeline also appear to align with the US cause. I would take the media's reporting on this with a large grain of salt.
- phatfish 4y ago> "while having Ukraine fight the war" Interesting turn of phrase, and one used heavily in Russian propaganda to remove any agency from the Ukrainian people. If the Ukrainian government had listened to their western allies Zelensky would have been on an evacuation flight shortly after the first missile hit. I'm quite sure they are not "having to fight" against Russia for anyone except themselves, and to ensure the continued existence of their country.