Inflation

[The Great Zaganza]

Oh, great.
Another "the Fed is a Ponzi scheme" conspiracist.

 

[lobosrul5]

Oh, great.
Another "the Fed is a Ponzi scheme" conspiracist.

Just replying to say, I don't subscribe to such notions. One only need look at the economic calamities that preceded a strong central bank to know its actually in our interests to have one. Keeping interest rates well below inflation now that we are out of the COVID crisis is what does irk me. Just glad I'm not near retirement age or there and trying to exist on bonds.

 

[dudalb]

It will hit New Zealand too, just don't get to happy about the US having inflation

 

[dudalb]

Just replying to say, I don't subscribe to such notions. One only need look at the economic calamities that preceded a strong central bank to know its actually in our interests to have one. Keeping interest rates well below inflation now that we are out of the COVID crisis is what does irk me. Just glad I'm not near retirement age or there and trying to exist on bonds.

Amazing how the anti central bank wackjobs ignore how chaotice things were before we had central banking. Let's go back to the good old days when any bank, no matter how shady, could issue it 's own currency.
It is one thing to criticise a specific policy a central bank has, but to abolish them and go back to anarachy in the fiscal world.
Of course most of the Anti Central Bank folk are anarchist anyway...

 

[The Atheist]

It will hit New Zealand too, just don't get to happy about the US having inflation

If you bothered to read my posts instead of jerking off over what you think I said, I've highlighted NZ inflation several times in this very thread.

 

[Brainster]

Well, there goes Modern Monetary Theory out the window.

 

[The Great Zaganza]

Well, there goes Modern Monetary Theory out the window.

How so?
There is nothing that Dems have done so far that Bush, Trump and others haven't done without increasing inflation.
Meanwhile, he have a pandemic and supply shortage, which explains inflation much better.

If you want to review the effects of MMT on inflation, you need a better test.

 

[psionl0]

Well, there goes Modern Monetary Theory out the window.

MMT hasn't ever been tested. Rather than printing money when needed, the government borrows it. * And you will never see the government run a surplus budget and burn the difference.

* I know the FED does QE from time to time but this is more as a reaction to government profligacy than implementing MMT.

 

[Meadmaker]

Sigh.

Last year, two presidents decided to throa a bunch of money at us to stimulate the economy. Awesome, except that, at the time, I noted the reason for the bad economy was that people weren't buying anything, because they weren't allowed to, or because they were afraid to go to stores to find the stuff, much less get on airplanes and spend it on hotels.

So now we've go tons of money, enough that we can buy lots of stuff, but still not travel or attend entertainment options, so instead we're buying tons of stuff that have to be loaded onto trucks, and we're out of trucks.

And eventually, the marketing departments say, "I think people will buy this stuff even if we raise prices by 5 %, so they do.....and just as I am about to start pulling money out of my retirement fund and not have another income, we return to those glorious days of yesteryear, when inflation was just considered normal.

Bah.

 

[lomiller]

Amazing how the anti central bank wackjobs ignore how chaotice things were before we had central banking. Let's go back to the good old days when any bank, no matter how shady, could issue it 's own currency.

It's pretty predictably really. Any time a big problem is fixed. 50-70 years later you have a generation that has never experienced the problem and convince themselves it doesn't exist because they have never seen it first hand. It's why it's easier to convince people in third world countries to get their kids vaccinated against diseases like Polio that it is to convince people in the US or Western Europe. The former have seen the disease first hand.

For another example look in the Brexit thread where you can seem prominent UK politicians in denial about all the problems being in a common market, common customs area with harmonized regulations solved for them. One recent example had one who denied the need for an enforced boarder at all, thinks it's just fine to let anyone or anything cross into the UK across the border with Ireland.

 

[Brainster]

How so?
There is nothing that Dems have done so far that Bush, Trump and others haven't done without increasing inflation.
Meanwhile, he have a pandemic and supply shortage, which explains inflation much better.

If you want to review the effects of MMT on inflation, you need a better test.

Did I blame the current inflation on anybody? If you ask me now the current inflation is about 50/50 Trump/Biden.

I do think MMT is horsecrap and is about to be exposed as such.

 

[The Great Zaganza]

Did I blame the current inflation on anybody? If you ask me now the current inflation is about 50/50 Trump/Biden.

I do think MMT is horsecrap and is about to be exposed as such.

It can't be, since, as psionl0 explained, it hasn't been used yet.

 

[The Atheist]

Did I blame the current inflation on anybody? If you ask me now the current inflation is about 50/50 Trump/Biden.

My bet is that nobody with any understanding of economics or monetary policy would agree with your analysis. It started with the GFC and was exacerbated by Covid.

Neither Trump nor Biden have anything to do with it.

 

[psionl0]

It started with the GFC and was exacerbated by Covid.

The GFC was 13 years ago. I doubt that it still has much of an effect on the state of the economy today.

Like the stagflation of the 70s, it is supply shocks (brought on by Covid) that are playing havoc on prices today.

 

[The Atheist]

The GFC was 13 years ago. I doubt that it still has much of an effect on the state of the economy today.

The effects of the GFC will be felt for the rest of human history. That's when QE started, and without that, the world would have had a sustained period of recession, which never occurred, so everything since has been a completely different landscape to what it would have been.

Also, what the GFC taught central banks was that you could tip money into the system without fear of inflation, because what it did was prop up asset prices. The tipping point of how much cash the system can cope with looks to have been reached, and we're finally seeing inflation.

 

[marting]

There's a disturbance in the "Force" as Star Wars fans might say:

https://www.msn.com/en-us/money/mar...bound-b-of-a-rates-strategists-say/ar-AAQJ9dg

“While each of these in isolation might be easy to ignore, when combined it shows a Treasury market that is challenging to manage risk even near peak Fed liquidity,” BofA strategists Mark Cabana, Ralph Axel and Meghan Swiber wrote in a note Monday. They said the market “is not well” and that “signs of illiquidity abound.”

2022 is going to be a bitch.

 

[lobosrul5]

The GFC was 13 years ago. I doubt that it still has much of an effect on the state of the economy today.

Like the stagflation of the 70s, it is supply shocks (brought on by Covid) that are playing havoc on prices today.

But 70's era stagflation also saw high unemployment, this time we have inflation with almost full employment. Like literally any able bodied person can get a job right now. At least where I live, there are signs to apply now, get paid at the end of your shift TODAY. Also 70's supply shocks were pretty much just oil unless I'm mistaken , what we are dealing with now is much more complicated. Not to mention the negative yields, which have never been this bad at least going back to 1900. This is... something different. I'm afraid the FED is going to wait to late to raise rates for fears it will hurt the stock market and by then inflation is going to be out of control. But I am a rank amateur at this stuff and hope they know something I don't.

ETA: ok I may be mistaken it looks like '74 had real yields about as bad as now.

 

[The Atheist]

2022 is going to be a bitch.

Yeah, but at least it's coming on the back of two great years!

But 70's era stagflation also saw high unemployment, this time we have inflation with almost full employment. Like literally any able bodied person can get a job right now.

That's a big part of the problem - wages are being driven up through demand for workers.

The only thing I can see causing that is the lack of unskilled migrants, because NZ and US are in the same boat, with incredibly tight employment, while Australia - not known for its friendliness to unskilled migrants - has a very high unemployment rate.

 

[lobosrul5]

Yeah, but at least it's coming on the back of two great years!



That's a big part of the problem - wages are being driven up through demand for workers.

The only thing I can see causing that is the lack of unskilled migrants, because NZ and US are in the same boat, with incredibly tight employment, while Australia - not known for its friendliness to unskilled migrants - has a very high unemployment rate.

Analysis I'm seeing here is, a bunch of people retired earlier than they would've pre COVID, huge return on their 401k/IRA made it possible. Then theres the 700,000* people who have died, and obviously left the workforce (I mean some were already retired) probably a significant number that are long term sick that can't work, and more families choosing for one parent to stay home. And its more difficult to get a work visa here than many think.

*ETA: damn we're up to 762,000.

 

[lomiller]

My bet is that nobody with any understanding of economics or monetary policy would agree with your analysis. It started with the GFC and was exacerbated by Covid.

Neither Trump nor Biden have anything to do with it.

Trump spending 4 years pressuring the Fed to expand the money supply and appointing incompetent sycophants the the Federal Reserve Board may well have played a role. Politicians are not supposed to get involved with the central bank in this was specifically because it invariably ends in inflation.

It's pretty hard to separate out how much of the inflation was caused by Trumps mishandling of the Fed, how much was caused by Trumps mishandling of Covid and how much was just inevitable rebound from Covid.