Reading this article and going through these comments make me realize that while I know what these words are I have a real lack of understanding how this stuff works. This may not be the best place to ask but do any of you guys have any recommendations on where to learn more about economics? Preferably something with good historical context.
US inflation jumps to 31-year high amid global supply chain crisis
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Re: US inflation jumps to 31-year high amid global supply chain crisis
#42Earlier quoted context omitted.
> Aren't more products being bought than ever despite the supposed supply chain issue? If there is more stuff and still not enough then shouldn't we assume that there is too much money? This doesn't rule out a "demand spike following COVID" as mentioned by the parent. It's like a cartoon where someone (COVID) steps on the hose and a big bulge of water (demand + extra savings) forms. Now that bulge is working its way…
The snake swallowing an elephant theory of the price level would explain a one time increase in the price level, but not higher constant inflation, and certainly not an increasing rate of inflation.
A shortage somewhere takes awhile to be noticed. Once stocks deplete, this causes excess orders to start to be generated by folks to replenish (or create) their own personal stocks from suppliers with low or inconsistent supplies, which generates excess demand. As this happens more and more, you get a demand shock with excess orders and lower and lower supplies. See the ongoing and expanding chip shortage. This has happened with ammunition multiple times in the US in the last few decades, along with many other components and parts.
Eventually the panic buying slows or stops and the orders clear, but it can take years for this to happen.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#43You need to take this seriously. the reason you should be concerned about these prices in relation to their 2008 crisis prices is because the countermeasure that resulted in 2008 relief --Quantitative Easing-- cannot be used again because we effectively never quit using it to prop up the last decade of commercial market performance. https://en.wikipedia.org/wiki/Quantitative_easing#US_QE4 the Federal reserve also has…
> the Federal reserve also has no leverage to modify the prime interest rate to combat this inflation, as it already sits near-zero
...huh? If you want to lower inflation you'd typically raise interest rates...
(These sorts of stupid-simple mistakes are pretty typical from inflation fearmongers in threads like this one... a lot of words that make it sounds like they know what they're talking about but sprinkled with incredible tells like this one.)
Re: US inflation jumps to 31-year high amid global supply chain crisis
#44Hey everyone - we need to chill out for a second. Stop buying the knee jerk reaction of the media trying to freak everyone out and get some good advertising dollars. This is going to take until after the new year maybe Q1-Q3 timeframe to see if it is transitory. Reminder: we had an unprecedented global supply collapse followed by shutdowns and border closures for more than a year combined with historic levels of fast…
You miss the key point on why this is happening and will continue to get significantly worse. What happens when the number of dollars approximately doubles in 2 years as it happened? Do you think prices stay the same and everything is just 50% off? Reality is that the current number is off by reality quite a bit, real number has to be much higher. It's just math and the worst part... it can't be just reversed.
We haven't doubled the money supply (not even close). The amount of misinformation in this conversation in the general public speaks to the lack of understanding of our monetary systems.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#45Hey everyone - we need to chill out for a second. Stop buying the knee jerk reaction of the media trying to freak everyone out and get some good advertising dollars. This is going to take until after the new year maybe Q1-Q3 timeframe to see if it is transitory. Reminder: we had an unprecedented global supply collapse followed by shutdowns and border closures for more than a year combined with historic levels of fast…
All you have to do is look at the Fed balance sheet to get an inkling of what's going on. They are monetizing the debt. Inflation is a very simple concept to understand. It's too many dollars facing too few goods. I understand no one wants a panic, but you also don't want to bury your head in the sand.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#46[deleted]
Re: US inflation jumps to 31-year high amid global supply chain crisis
#47I've mentioned before [1] but these prices still don't seem that serious. Most prices have still not beat their highs made in 2008-2014 (crude oil, global energy price, eggs, milk, sugar, rice, chicken, pork chops). Ground beef is an outlier, however. And US price per kwh is back at its peak, though it declined in these October numbers to be below... 2014 numbers again. [2] So while the climb up is bad, the prices th…
Cereal I could buy for $3 and granola bars I could buy for $2 now cost $4.30 and $3.29 respectively. Detergent that was $5 is now $7.50. McDonald's cheeseburgers are $2 on their own. That is the largest jump of inflation I've ever experienced in such a short time.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#48Hey everyone - we need to chill out for a second. Stop buying the knee jerk reaction of the media trying to freak everyone out and get some good advertising dollars. This is going to take until after the new year maybe Q1-Q3 timeframe to see if it is transitory. Reminder: we had an unprecedented global supply collapse followed by shutdowns and border closures for more than a year combined with historic levels of fast…
You miss the key point on why this is happening and will continue to get significantly worse. What happens when the number of dollars approximately doubles in 2 years as it happened? Do you think prices stay the same and everything is just 50% off? Reality is that the current number is off by reality quite a bit, real number has to be much higher. It's just math and the worst part... it can't be just reversed.
I'm not sure that's the worst part.
I predicted about 2x inflation as a best-case outcome a year ago. Worst-case outcome would have been serious structural damage, in terms of business bankruptcies, lost jobs, lost mortgages, etc.
Unless we get into a hyperinflationary cycle, we came out pretty well, economically.
Our public health response, on the other hand, was and continues to be a disaster.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#49It's not transitory. Prices have increased, unless there is extreme deflation, they aren't going down. Prices will continue to increase. At this rate, feds will have no control.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#50Earlier quoted context omitted.
I know that if Red Team had won the election Blue Team would be running news stories every day about the dangers of inflation and how it is hurting the middle class. Instead, we are seeing pundits downplay inflation as either something 'transitory' or something beneficial: "Why the inflation we're seeing now is a good thing" -MSNBC tweet that got deleted. Edit: "Yes, inflation is back, and you should probably be reli…
I'm told that NYT, WaPost and others are all solidly Blue Team and yet they seem to be running stories about inflation and how much it's risen daily. It's not a good thing in my opinion, but who's to say it's not transitory?
People were flagged on HN just 6 months ago for mentioning inflation. There was relentless suppression on HN about inflation until media started reversing the story.
The narrative in the media would be have taken a whole another level - scare mongering, etc if it wasn’t the Blue team in the office. I don’t really trust anything but hard numbers from sites such as TradingEconomics or FT.
I have no horse in this race but Blue teams vs Red team is getting really dull and frankly annoying. Everyone seems to be wearing tinted glasses. I have higher standards for media and information that I listen and trust - opinions on HN doesn’t cut the mustard. Usually it’s safe to assume that opposite of the current HN zeitgeist is true (I only joke slightly).