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We cannot "jack up" interest rates, the debts are far too enormous, and the ecological capacity for further "growth" to pay those higher rates simply is not there.
I think we’re too far in to a long term debt cycle for it to make much of a difference. But I do think that’s what they’re going to try to do. What else could they do? Nothing I suppose.
I think we’re too far in to a long term debt cycle for it to make much of a difference. But I do think that’s what they’re going to try to do. What else could they do? Nothing I suppose.
That's precisely what they'll do- nothing, whilst pretending the problem doesn't exist.
In fact, they'll make the problem even worse, by printing further trillions of dollars of funny money out of thin air.
It’s here I read it, hear it, and have seen some mostly in gas.
So tell us where have you seen it, for how long and exactly how much of a price increase have you seen?
Mom and I buy pretty much the same food list all the time. Food prices started inching up four years ago. Just this month my favourite yoghurt jumped from five buck to seven, eggs went up almost two dollars. Cereal??? Sometimes the good stuff is on sale, so we watch. Hydro is now a major cost: up five percent in a granted increase during Covid. GAS SHOULD be an election issue in the USA...........for the last fifty years. (It's not directly this thread issue) And of course any lease/rents are climbing fast. Unless you're very connected and lucky, they're DOUBLED in less than three years. Inflation is THERE, no matter how the Feds want to tweak the measurement of it. I RARELY eat out any more. It's incredibly expensive where I am. Decades ago when I made a very average private sector wage, I'd think of nothing of eating out at least once a week. I haven't eaten out in two years.
The problem is wages aren’t really increasing to match the inflation. Hence, stagflation. IMO the government has just recklessly been trying to throw money at a problem and has now created a whole new monster that can’t be satiated with printing endless fiat. I honestly think we are moving into 1970s era inflation and the antidote, jacking up interest rates, is going to be very painful for many segments of the economy. Or, the fed very well could keep living in la la land and let the chips fall where they may. Either way, I don’t anticipate a soft landing.
What I think is unique about this situation is when SHTF, EVERYONE is going to blame the government.
I'm fairly well-paid by the standards of my local area, but I've been working throughout COVID, haven't been furloughed/unemployed, etc., and am making 2% more than I was in February 2020, right after I got promoted.
If you're at the median ~$35k or so HHI, this inflation is screwing you over.
Quote:
Originally Posted by redguard57
The video game point is interesting. I would expect technology to go down.
Keep in mind that video game sales are going increasingly digital, so there isn't even the cost of the physical disc/jewel case, shipping, etc. I don't have a single physical game for my Playstation 5. Those costs are up from $49.95, and rarely $59.95 in the last generation, to $69.95 across the board.
Computer graphics cards and video game consoles are hard to find at any price due to the chip shortage. I had to follow multiple Twitter accounts for a few days for restock alerts on the PS5 before I had any chance of getting one. I did eventually get one, but I've bought most video game consoles at or near launch for 25 years and this is the worst I've ever seen things.
The thing with blame game is, we'll never know what's right. We will never know if the inflation would have happened had we just printed money and there had been no covid causing supply line issues. Had there been no covid, however, there would not have been political will to stimulate an economy that was already good and stimulated.
This is the situation: Covid happened, humanity shut down the entire world economy, we gave people money and printed money so the financial sysyem would not seize up and cause a massive depression within a pandemic, supply lines caused shortages, shortages cause inflation, more money in circulation also causes inflation. We don't know which is more to blame. It was all because of covid. Things would have been better without covid. We all know that, but here we are.
Here's the thing before you play the political blame game. The entire globe reacted to covid with some amount of similarity - shut downs followed by stimuli. For the governments that could afford it. We are not the only country facing inflation. It's pretty high in India and the Phillippines, for example.
Also remember that many of these markets are global - lumber, oil, etc..
Also if you look at history, this was bound to happen. There Plagues tend to followed by labor shortages amd labor shortages caise wage growth and then inflation. Humanity never never reacted to a plague in the way we did in 2020, usually they were just gritted and endured, whoever was going to get sick and die, just got sick and died. Maybe localities lile cities tried to do some restrictions. In 2020 we made very serious efforts to save people at a macro-economic cost, resulting in quasi-command economies the likes of which we have never done except in world wars. Transition away from war economies does result in inflation.
It's unfortunate for research purposes that the Spanish Influenza coincided with WWI. We don't really know what economic problems in 1918-23 were war-caused and which were pandemic- caused.
E.g.: I was recently reading about how, in France, to prosecute WWI, they got off the gold standard and printed a ton of money, about 5x the amount of currency in circulation pre-war. They also did a lot of rent moratoria and gave direct payments to families who had members involved in the war effort which was something like half the country. They had high growth but also high inflation for about 8 years afterward.
Sound familiar?
I think it is pretty obvious inflation would have been bad if the Fed did what it did and there was no covid.
No one knows for sure, but when the Fed printed money in 2008-2009, the money went to bank reserves in response to liquidity crisis which caused banks to collapse due to shadow money going away as bad loans could not be made anymore. Now they just threw money recklessly because of shutdowns assuming they could keep economy going when there was no financial crisis that justified money printing. The FED printed money during great recession because there was shadow money that was gone and the bank reserves were lost and the whole banking system would have gone down. The same was not the case with Covid nor other recessions.
And the money they put into system in covid they lowered reserve requirements and allowed money to escape to economy to allow M2 money supply to skyrocket where it did not after the QE during 2008-2009 financial crisis and even did not afterwards in 2011-2015.
SO I think with the inflation we are seeing now that the FED is lying is gonna ease just to justify there stupid money printing in the name of most perfect employment ever (We do not live in a perfect world and in fact we have record job openings yet Fed acts as if employment is a problem when ever you said RedGuard87 it is not now as opposed to months after August 2008). would have been far worse if there was no covid. I mean we had the greatest economy ever before covid with low inflation in everything except college education, homes, and some forms of health care, and yet the Fed was worried about less than 2% inflation even before Covid. Dorks they are. So yeah if they printed that kind of money and allowed it to more than bank reserves without Covid following greatest economy ever, than yeah inflation would have been double digits easily.
The problem is also that the current administration is trying to cram through a lot of spending after the stimulus.
I expected that this would eventually occur. The public notices that a small segment of the population is benefiting disproportionately from the asset purchase program and also that the program does nothing on its own to reduce unemployment.
FYI: Not trying to be political by pointing out Biden administration no more than my pointing out the CPI modifications under Reagan and Clinton administrations. Politics really reduces the IQ of some people since they immediately become defensive when they perceive their hero to be attacked or their anti-hero to be elevated.
Here's the charts for new cars and used cars. They've been fairly well-suppressed for several decades.
If you go by their numbers, you may be paying about $ 16,000 more than you should for the average new car or truck using their price change data since the last 90's.
The inflation is also showing up in the auto rental rates and Uber/Lyft prices as well.
I love your posts, Ichoro. Agree 100%.
I heard a story on NPR ( sorry, cannot recall what it was called to source it ) about how
currency economy changes every 50 yrs. or so as a cycle.
I believe a huge mistake was made to not slowly raise the minimum wage as it should have
been done gradually over the years and decades, instead of not doing anything at all.
If I were in charge of things, I would have taken a look at the population and the various
economic needs of the population every 10 yrs. or so to monitor and identify upcoming
needs of the population and factors that will need to be addressed to meet those needs.
Because interest rates have been so flat, investors have been manipulating various sectors
to make profit. Now we see sky high costs for these speculations. Internet has been spun
off to foreign markets, while enough skeleton crew remains in the US to be a public traded
stock but customers have zero recourse to find US based support for the internet. This
summer, we have learned that housing is being scooped up by a hedge fund group that
everyone depends on for their portfolio. Etc. etc.
Shareholders demand profit, profit comes from inflated prices that customers pay. If
customers work a 9 to 5 job, customers want to be able to earn enough to pay for their
basic living expenses. Smaller business gets squeezed because it cannot compete with
corporate.
Personally, I believe that lobbying has morphed from it's original Constitutional intent
into what is now out and out legalized bribery of ALL our elected officials in returned for
political influence and favoritism.
That's precisely what they'll do- nothing, whilst pretending the problem doesn't exist.
In fact, they'll make the problem even worse, by printing further trillions of dollars of funny money out of thin air.
I couldn't rep you again for this, but you're 100% correct. Working in supply chain has been pure hell, and I almost cannot keep up with the amount of requests I receive. Lead time are horrendous. I don't want to reveal in detail what I do or where I work, but I see it daily. You cannot let this continue by flooding the market with more money on a system that cannot keep up. Increasing the child tax credit and advancing half of it in monthly payments is worsening the situation.
Like I said in another post, it blows my mind the number of people paying $800 per night for a hotel room here at the beach. No normal person could or would do that; but they are. Why? Pent up demand, printed $ in their pocket, or maybe excess money they didn't spend during Covid. Add all that together, and prices have spiraled out of control. Something has put the brakes on soon.
I couldn't rep you again for this, but you're 100% correct. Working in supply chain has been pure hell, and I almost cannot keep up with the amount of requests I receive. Lead time are horrendous. I don't want to reveal in detail what I do or where I work, but I see it daily. You cannot let this continue by flooding the market with more money on a system that cannot keep up. Increasing the child tax credit and advancing half of it in monthly payments is worsening the situation.
Like I said in another post, it blows my mind the number of people paying $800 per night for a hotel room here at the beach. No normal person could or would do that; but they are. Why? Pent up demand, printed $ in their pocket, or maybe excess money they didn't spend during Covid. Add all that together, and prices have spiraled out of control. Something has put the brakes on soon.
Pent up demand, supply/demand chaos due to and then coming out of the Pandemic.
They are using savings, not newly printed money. First hand, I can tell you that there are more than plenty of people with enough means to do exactly what we have been doing at the beaches from Dan Point CA to Seaside OR these past few weeks.
Pent up demand, supply/demand chaos due to and then coming out of the Pandemic.
They are using savings, not newly printed money. First hand, I can tell you that there are more than plenty of people with enough means to do exactly what we have been doing at the beaches from Dan Point CA to Seaside OR these past few weeks.
How does the trillions in newly printed money have nothing to do with it? That doesn’t make any sense.
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