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US inflation jumps to 31-year high amid global supply chain crisis

theguardian.com

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Re: US inflation jumps to 31-year high amid global supply chain crisis

#51

Post by throwawaygh »

boringg wrote: post #44
kerng wrote: post #40

Earlier quoted context omitted.

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.

It's not a lack of understanding. There are multiple incredibly strong propaganda machines, both political (R) and business (crypto), pushing this narrative.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#52

Post by crisdux »

simonsarris wrote: post #32
crisdux wrote: post #22

Earlier quoted context omitted.

I see significant errors in your thesis. You are using global commodity prices to make claims about US consumer prices and consumer inflation. We have comprehensive data from national food retail that shows strong price inflation. Your insistence in using global commodity prices to disprove consumer inflation concerns is incorrect.

No, I have used only US commodity prices, except crude and a global energy figure, which is why I also added US kwh prices. All food prices mentioned are US-only figures.

The link you provided in your previous post is about global prices and uses global commodity data. They are certainly not US-only figures. Correcting this error would likely show you that inflation is real.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#53

Post by dubcanada »

kerng wrote: post #40
boringg wrote: post #27

Hey 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 have no idea what you are saying. Also what is "just math" and why can't it be reversed? Inflation can go down, it's not a purely up percentage, you can have negative inflation.

What do you mean by "number of dollars approximately doubles in 2"?

Re: US inflation jumps to 31-year high amid global supply chain crisis

#54

Post by wayoutthere »

alphabettsy wrote: post #25
wayoutthere wrote: post #23

Earlier quoted context omitted.

I completely agree with you; but it’s because this is what “the collapse” looks like. A long, slow decline into a world that most of us cannot afford. I honestly don’t think there’s much we can do to stop it at this point; it’s the result of 100 years of energy policy keeping prices artificially low by ignoring the externalities that causes. I don’t think we’re ever going back to the pre-pandemic past. Climate change…

Can you elaborate on why your view of the situation is so bleak?

Climate change, and how brittle the JIT-optimized global logistics system we built over the last 50 years is. We can and will need to adjust to a more flexible system to deal with the increased disruption from climate change, but that system will be more expensive and less efficient.

Couple this with the fact that we’re going to eventually have food shortages at least locally in the short-to-medium term, which will destabilize the developing world and raise global food prices as more countries have to import from “bread basket” countries like the US and China and consuming even more global logistics capacity than it does today. This long-term famine is already happening in Central America and is driving more and more migrants north every year.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#55

Post by boringg »

kerng wrote: post #40
boringg wrote: post #27

Hey 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.

FWIW: Narrow money - (cash, deposits, savings account) over $40 trillion of USD. $90 Trillion in broad money. $1.3 quadrillion including investments, crypto, derivatives.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#56

Post by jihadjihad »

mattmoose21 wrote: post #41

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.

One to look into is Backhouse's The Ordinary Business of Life (2002). A good overview of the subject that incorporates ancient and modern perspectives.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#57

Post by nightski »

simonsarris wrote: post #13

I'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…

It's not the prices people are necessarily scared with, it's the rate of increase. It's higher than was anticipated.

What's also concerning is that the velocity of money is really low while M2 money supply is very high. If the velocity picks up we could be in a world of hurt.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#58

Post by mint2 »

A main cause of inflation sticking around is public perception of inflation existing. I feel like there is solid perception that inflation exists. I would not bet on it being transitory. Even if the underlying cause goes away, it will take longer for the perception to go away because is a self reinforcing phenomenon.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#59

Post by MeinBlutIstBlau »

BitwiseFool wrote: post #19
argentinian wrote: post #10

Earlier quoted context omitted.

It's incredible. It's the same strategy that some politicians use in Argentina: they find any kind of thing to blame for inflation, except for monetary policy. Americans, please don't imitate Argentina, keep a healthy economy.

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 know HN doesn't like it when you criticize the US left but I'm here with you. I didn't buy a single word out of the Biden administration pre-election. The "never Trump" people were so blinded by Trump that they didn't realize the other guy was a worse bought and paid for puppet than Hilary. Hilary at least had a functioning brain and could reign in the Dems. Biden doesn't even know it's Wednesday.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#60

Post by throwawaygh »

nightski wrote: post #57
simonsarris wrote: post #13

I'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…

It's not the prices people are necessarily scared with, it's the rate of increase. It's higher than was anticipated. What's also concerning is that the velocity of money is really low while M2 money supply is very high. If the velocity picks up we could be in a world of hurt.

This post and its parent hit the nail on the head. Levels aren't particularly worrisome. High, sure, not scary high. However, you should still be worried. Just not about current prices.

It's various first and second derivatives + the amount of "potential energy" in the system that have (informed) people scared.

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