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Don't let the name fool you, inflation is not about prices increasing per se. It's about your dollar having less value. In response to Covid The Fed "goosed" t

Don't let the name fool you, inflation is not about prices increasing per se. It's about your dollar having less value. In response to Covid The Fed "goosed" the economy by "printing" a ridiculous amount of new dollars. That obviously devalued what was already in circulation. Devalue === worth less Worth less === buys less Voila...inflation. The reason you / we don't understand is because no one - gov, Fed or media - wants the come clean on the impact of The Fed's Covid related decisions.

deleted 3y ago
[deleted]
nly 3y ago
The classic Milton Friedman argument is: higher government spending = higher inflation. Friedman made the argument that productivity (GDP growth per capita) has no effect on inflation, and interest rates just move where you choose to measure 0, hence his famous quote that "inflation is always and everywhere a momentary phenomenon" (paraphrased)
- nly 3y ago
  Friedman also always said that wage growth doesn't cause inflation, but inflation causes wage growth.
- zeroonetwothree 3y ago
  The quote is “inflation is always and everywhere a _monetary_ phenomenon” which means something quite different than what you said
  - nly 3y ago
    Yes, sorry, typo.
IndoorPatio 3y ago
The dollar's value is high. https://www.schwab.com/learn/story/will-us-dollar-be-dethroned https://www.schwab.com/learn/story/will-us-dollar-be-dethron...
- fuzzfactor 3y ago
  In comparison to what? Other currencies? Certainly not in what it will buy in the USA. Wages definitely are not driving inflation, wages will never keep up very well nor catch up. Prices will never come down, except in unusual circumstances like overblown bubbles in market-based commodities where the market controls the value more so than underlying utility.
- htss2013 3y ago
  Not domestically. If the dollar had been gaining strength, the price of everything domestically would be getting cheaper.
  - witchesindublin 3y ago
    This is what the FT noted was the paradox of the US dollar's strength. The problem comes with the fact that the US dollar being the global currency of trade, means that everything is originally priced in US dollars, so the strength or weakness of the US dollar does not change the price. Furthermore the US is somewhat self-sufficient in terms of trade in key inflation areas such as food, so the dollar is ending up hurting exporters and reducing corporates profits.
- deleted 3y ago
  [deleted]
ffgjgf1 3y ago
They have been printing money at a significantly elevated (yet far from being as high as in 2020-21) rates for years yet CPI growth remained very low both in US and the EU besides fluctuations in energy prices and housing.
- chiefalchemist 3y ago
  That might be true on the surface. But there needs to be an explanation why all that printing had no side effects. It doesn't make sense. Something else must be going on.
  - ffgjgf1 3y ago
    There was inflation in asset and some other prices but those are simply not included or have a low weight. Also increasing productivity and technological progress should (and usually does)result in lower prices of goods. Of course for things like cars or phones you end up paying the same or more for a superior product with more features, efficiency etc. instead.
- s1artibartfast 3y ago
  Money has to go somewhere. When real economic growth is high, that money gets locked up investments or used to purchase more goods. If there are no good investments and the number of goods manufactured isn't increasing, then the price of goods themselves goes up.
dragonwriter 3y ago
> Don't let the name fool you, inflation is not about prices increasing per se. It literally exactly is. > It's about your dollar having less value. That’s exactly the same thing. > The reason you / we don't understand is because no one - gov, Fed or media - wants the come clean on the impact of The Fed's Covid related decisions. Almosf everyone (policy makers, media, outside observers) recogbizes and openly acknowledges that the recent inflation is largely a stimulus (mix of fiscal and monetary, though you focus on specifically the monetary part) overshoot from the extremely sharp but also extremely short, and with an extraordinary rapid bounce back, COVID recession. Trying to make this an “everyone is hiding it” conspiracy is... amusing, I guess, but not grounded in reality in any way.
- chiefalchemist 3y ago
  No. It's not the same thing. At least not in the minds of the masses. The value of your dollar is *deflating*. And that's because where there used to be X there are now more of X. A lot more. It's not a conspiracy theory when 99% of the time the narrative is "...it's the Russians and war..." or whatever BS they push and barely passing references to "oh btw The Fed flooded the money supply...again...and has devalued your dollars...effectively raising your taxes". FFS stop with the hyperbole, stop being so naive, and stick to the facts. Please.
  - dragonwriter 3y ago
    > No. It's not the same thing. Yes, “the number of dollars I must give to get a fixed set of goods is larger” is exactly the same thing as “the number of things I can get for a fixed quantity of dollars is smaller”. General price increases and dollars being less are identical. > It's not a conspiracy theory when 99% of the time the narrative is "...it's the Russians and war... It wouldn’t be if that were true 99% of the time, but its not so, as you say: > FFS stop with the hyperbole, stop being so naive, and stick to the facts. Please.
    - chiefalchemist 3y ago
      It's not the same thing. Because looking at it from the two different perspectives leads to two different conclusions. So it's The Russians? And The Fed's decisions have nothing to do with it? Come on now. Who aside from the masses is buying that? And instead of tossing around cliches (e.g., conspiracy theories) just stick the facts. There's a narrative in the media and it doesn't mention The Fed. Funny enough, you seem to be championing that narrative. I can see w hy you're confused and lazily playing the cliche card. Good luck with that.

deleted 3y ago

[deleted]

nly 3y ago

The classic Milton Friedman argument is: higher government spending = higher inflation. Friedman made the argument that productivity (GDP growth per capita) has no effect on inflation, and interest rates just move where you choose to measure 0, hence his famous quote that "inflation is always and everywhere a momentary phenomenon" (paraphrased)

nly 3y ago
Friedman also always said that wage growth doesn't cause inflation, but inflation causes wage growth.
zeroonetwothree 3y ago
The quote is “inflation is always and everywhere a _monetary_ phenomenon” which means something quite different than what you said
- nly 3y ago
  Yes, sorry, typo.

IndoorPatio 3y ago

The dollar's value is high. https://www.schwab.com/learn/story/will-us-dollar-be-dethroned https://www.schwab.com/learn/story/will-us-dollar-be-dethron...

fuzzfactor 3y ago
In comparison to what? Other currencies? Certainly not in what it will buy in the USA. Wages definitely are not driving inflation, wages will never keep up very well nor catch up. Prices will never come down, except in unusual circumstances like overblown bubbles in market-based commodities where the market controls the value more so than underlying utility.
htss2013 3y ago
Not domestically. If the dollar had been gaining strength, the price of everything domestically would be getting cheaper.
- witchesindublin 3y ago
  This is what the FT noted was the paradox of the US dollar's strength. The problem comes with the fact that the US dollar being the global currency of trade, means that everything is originally priced in US dollars, so the strength or weakness of the US dollar does not change the price. Furthermore the US is somewhat self-sufficient in terms of trade in key inflation areas such as food, so the dollar is ending up hurting exporters and reducing corporates profits.
deleted 3y ago
[deleted]

ffgjgf1 3y ago

They have been printing money at a significantly elevated (yet far from being as high as in 2020-21) rates for years yet CPI growth remained very low both in US and the EU besides fluctuations in energy prices and housing.

chiefalchemist 3y ago
That might be true on the surface. But there needs to be an explanation why all that printing had no side effects. It doesn't make sense. Something else must be going on.
- ffgjgf1 3y ago
  There was inflation in asset and some other prices but those are simply not included or have a low weight. Also increasing productivity and technological progress should (and usually does)result in lower prices of goods. Of course for things like cars or phones you end up paying the same or more for a superior product with more features, efficiency etc. instead.
s1artibartfast 3y ago
Money has to go somewhere. When real economic growth is high, that money gets locked up investments or used to purchase more goods. If there are no good investments and the number of goods manufactured isn't increasing, then the price of goods themselves goes up.

dragonwriter 3y ago

> Don't let the name fool you, inflation is not about prices increasing per se. It literally exactly is. > It's about your dollar having less value. That’s exactly the same thing. > The reason you / we don't understand is because no one - gov, Fed or media - wants the come clean on the impact of The Fed's Covid related decisions. Almosf everyone (policy makers, media, outside observers) recogbizes and openly acknowledges that the recent inflation is largely a stimulus (mix of fiscal and monetary, though you focus on specifically the monetary part) overshoot from the extremely sharp but also extremely short, and with an extraordinary rapid bounce back, COVID recession. Trying to make this an “everyone is hiding it” conspiracy is... amusing, I guess, but not grounded in reality in any way.

chiefalchemist 3y ago
No. It's not the same thing. At least not in the minds of the masses. The value of your dollar is *deflating*. And that's because where there used to be X there are now more of X. A lot more. It's not a conspiracy theory when 99% of the time the narrative is "...it's the Russians and war..." or whatever BS they push and barely passing references to "oh btw The Fed flooded the money supply...again...and has devalued your dollars...effectively raising your taxes". FFS stop with the hyperbole, stop being so naive, and stick to the facts. Please.
- dragonwriter 3y ago
  > No. It's not the same thing. Yes, “the number of dollars I must give to get a fixed set of goods is larger” is exactly the same thing as “the number of things I can get for a fixed quantity of dollars is smaller”. General price increases and dollars being less are identical. > It's not a conspiracy theory when 99% of the time the narrative is "...it's the Russians and war... It wouldn’t be if that were true 99% of the time, but its not so, as you say: > FFS stop with the hyperbole, stop being so naive, and stick to the facts. Please.
  - chiefalchemist 3y ago
    It's not the same thing. Because looking at it from the two different perspectives leads to two different conclusions. So it's The Russians? And The Fed's decisions have nothing to do with it? Come on now. Who aside from the masses is buying that? And instead of tossing around cliches (e.g., conspiracy theories) just stick the facts. There's a narrative in the media and it doesn't mention The Fed. Funny enough, you seem to be championing that narrative. I can see w hy you're confused and lazily playing the cliche card. Good luck with that.