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The short answer is we are inflating our way out of debt.
Timothy Geithner, Secretary of the Treasury under Obama, said back in 2009 that we didn't need to worry about the national debt, because inflation would eat it away.
Not sure I like the answer, but I appreciate the honesty.
Lots of that debt is to help old people stay retired comfortably via bond investments in pensions, 401Ks, and IRAs.
But in the same breath, anyone who thinks Biden started the horrible inflation while ignoring Trump increasing the money supply by leaps and bounds is a moron. Not that you are saying one way or the other.
Republicans need to clean their own house, it's filthy.
none of that QE affected inflation until Biden pronounced his ARP.
The CARES Act was overwhelmingly approved by politicians on both sides in an emergency. Even then, deficit hawks swore it would ruin us, and inflation would go nuts. Perhaps by sheer luck that didn't happen. What we know is GDP dropped by ~2T in the middle of '20, and CARES was 2T. By the time ARP came around, GDP had already recovered.
So while yes, costs to produce are also rising. They are taking in a bigger percentage profit on top of that.
I'm not saying that's the cause of inflation, but companies are indeed making more with less in this environment.
well, perhaps a look at what companies are in the S&P500, and their lines of business and how their profit margin looks would be of value.
Companies like Amazon, Apple, Google, and yes Wal-Mart and Kroger. Are the first 3 enjoying record margins? I'm sure they probably are. Are Wal-Mart and Kroger - the places that sell the "necessities" that consumers buy daily - making the 12%+ net income? No, they are not.
Amazon, Apple and Google can easily afford to pay their already highly-paid workers. They don't have to go to $20/hr (except Amazon in the warehouse). Amazon doesn't care if the goods it sells go up in wholesale price, because they just pass that straight on to the consumer.
Amazon’s AWS segment generated net sales of $17.8 billion and operating income of $5.3 billion in Q4 FY 2021. Net sales grew 39.5% and operating income rose 48.5% compared with the year-ago quarter. Although net sales from AWS are below net sales for the North America segment and International segments, AWS’s operating income is substantially higher. The AWS segment accounts for about 13% of total net sales. Because the other two segments posted operating losses in the fourth quarter, AWS accounts for all of the company’s operating income.
Amazon controls about a third of the global cloud market, substantially more than its next closest competitor. AWS’s biggest rivals are Microsoft Corp.’s (MSFT) Azure and Alphabet Inc.’s (GOOGL) Google Cloud.
see, to many people, they think Amazon and they just think of online shopping, fulfillment warehouses, and packages arriving at their doors. They think of everybody who suddenly was ordering everything online and are just sure that Amazon is a greedy corporation making all kinds of cash from their purchases.
Getting them to understand the reality - it's the growth in AWS that fuels the income statement - is often hard.
Inflation is NOT from Greedy businesses as Blueanon folks like Liz "Pocahontas" Warren and Jen "Orange Woman" Psaki claim.
I would suggest some producers were pushing the envelope on Price Elasticity to recoup losses during the stupid useless unnecessary shut-downs during STUPID-19, but now they're getting slammed with higher transportation costs, including higher fuel prices.
Quote:
Originally Posted by michiganmoon
(1) Producer Price Indexes have risen faster than Consumer Price Indexes. That is, it is costing manufacturers more to make their products than the growth it costs consumers to buy it. In 2021, producers ate most of their rising costs and they can no longer continue to do this.
That points back to pushing the envelope on Price Elasticity.
Quote:
Originally Posted by michiganmoon
(2) Since February, M2 Money supply increased by 41%, but the GDP only increased by 9%. This means that more dollars are chasing the same amount of products as before, which is an inflationary pressure. China, which did not create trillions out of thin air during the pandemic, only has 0.9% inflation.
I reject that because money velocity is flat.
Some of you might remember about 8-10 years ago I said that starting around 2025, you would experience mild hyper-Monetary Inflation worse than the 1970s but not as bad as the 1920s, which I pegged running between 15%-25% annually.
Guess what's gonna happen when velocity takes off.
The argument isn't whether it was needed or not. Fact is increasing the money supply leads to inflation. It knows no political boundaries.
Yes, increasing the money supply leads to inflation.
Was it needed? Yes, to move some wealth accomplished by the plandemic. Those little stimulus checks that came to citizens were the tip of the iceberg. I think burial assistance ran into the billions, as did those special payments for anyone that might have had COVID when they had their stroke or heart attack (including illegal aliens for all of this as they don't ask "status"). Then, businesses got stimulus checks to offset being shutdown by the government.
Obama tried to crush our economy, but didn't get it done, so now whoever is the puppeteer of brain dead Biden is trying to finish the job. They have to break us to bring in the New World Order, and Obama has had his eye on that for some time.
Timothy Geithner, Secretary of the Treasury under Obama, said back in 2009 that we didn't need to worry about the national debt, because inflation would eat it away.
Not sure I like the answer, but I appreciate the honesty.
Lots of that debt is to help old people stay retired comfortably via bond investments in pensions, 401Ks, and IRAs.
That is Paul Krugman at the NY Times excuse for ballooning the debt. I guess if we get hyper inflation and prices rise 1000% a year. Then the debt won't look so bad.
The statistics I gave are from the government. Remember, M2 money velocity is measured per individual dollar unit not total dollars flowing. So hypothetically if the velocity remains the same but money supply doubles, you still got twice as much money flowing.
Quote:
Originally Posted by Oklazona Bound
That is Paul Krugman at the NY Times excuse for ballooning the debt. I guess if we get hyper inflation and prices rise 1000% a year. Then the debt won't look so bad.
That would be really painful. Neither party has elected adults in decades IMHO and that is why we have this potential mess.
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Not that you are saying one way or the other.
