Joe Biden
US inflation jumps to 31-year high amid global supply chain crisis
161–170 of 304 posts
Re: US inflation jumps to 31-year high amid global supply chain crisis
#162Earlier quoted context omitted.
Nobody wants to be the next Jimmy Carter who lets the fed raise interest rates to stem inflation because it invariably triggers a recession that gets said president and his party voted out of office. So rates will stay perpetually low.
Eh, we had high interest rates in the 90s and it worked out. Also, involving politicians is a huge mistake, the Fed needs to recapture its independence so it can make tough decisions. As for the rest, we as a society have become too petulant, expecting a forever boom and doing hardly anything to mellow out the boom bust cycle. And it’s not just the USA either.
What we had in the 90s wasn't that high - check out the early 80s. 15-16%+ mortgage rates iirc, think about those payments on a $1 million dollar 3 bedroom.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#163Earlier quoted context omitted.
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.
But you’re mistaking inflation for the rate of inflation growth. The rate of inflation growth is horrible right now.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#164Earlier quoted context omitted.
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.
That is not a lot of information, though. Processed food has been harder hit than real food and areas that are entirely dependent on trucking because of a lack of ports or rail also have seen much greater impacts.
Poor people, which is a large majority of the United States, can only afford processed food. You neoliberals in your whole foods crap make me nauseous.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#165Earlier quoted context omitted.
If you never stop drinking, you never get a hangover? If we get hyperinflation, maybe housing will be affordable again? Tough time for retirees and folks who put money in the bank already (and not the stock market), but what else is new.
> If we get hyperinflation This isn’t hyperinflation, nor is it on the precipice. It’s not in the same ballpark, it’s not in the same league. The only way the US experiences hyperinflation is if the petrodollar system completely collapses along with several other shocks to the system at the same time. Not impossible, but completely separate and distinct from current fed policy.
COVID, climate change, and near-term high inflation in the dollar are all system shocks that will unravel the petrodollar in pretty short order. We’re following the Argentina school of monetary policy, so it shouldn’t surprise us if we get the same hyperinflation here.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#166Earlier quoted context omitted.
> What do you mean by "number of dollars approximately doubles in 2"? I think OP was talking about monetary inflation. We nearly double the money supply so it should translate to a nearly double price inflation.
That is not how inflation works.
All thing being equal. 2x monetary supply should translate to 2x price inflation. It’s literally how inflation work. The reason we don’t have that’s crazy inflation is not everything is equal. Mostly at natural the economy should deflate right now.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#167Earlier quoted context omitted.
That article is about world food prices, every single link I give in my comments contain US-only food prices: https://news.ycombinator.com/item?id=29114501 I have never said that inflation is not real, only that this price inflation has merely returned prices to 2011-2014 levels (excepting beef, which is actually at a new high).
Prices are always moving so you can say anything you want by cherrypicking individual categories. That says nothing about inflation.
For this comment to be helpful, you could offer links about goods that you feel better better represent inflation.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#168There's one thing I've never quite understood. There seems to be some sort of obsession with inflation and Fed policy among the HN/Reddit demographic. Could it be the crossover with interest in Cryptocurrencies? I could be wrong but it's just something I've noticed over the years.
Inflation hedging is to inflation as vaccines are to pandemics.
Re: US inflation jumps to 31-year high amid global supply chain crisis
#169I'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…
the problem with this line of reasoning is that the Fed has tools to control inflation which they are not using because of it (namely, rate hike) while simultaneously the working and middle classes are feeling the worst effects since they own the fewest equities, least property, and have the most shoestring budgets
meanwhile if you're rich you prob got richer
perhaps we need to rethink how healthy inflation really is
Re: US inflation jumps to 31-year high amid global supply chain crisis
#170Earlier 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.
I would note that prices are markovian. So if something doubles over night it means something happened to affect that price. All the information about the thing and its history is represented in the current price. Having that price double overnight conveys information that something is happening. It doesn't matter that the thing cost even more 10 years ago.
You have to look at prices on the margin.