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It’s mostly a demand shock, not a supply shock, and it’s everywhere

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Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#371

Post by sleepysysadmin »

wexler88 wrote: post #352
sleepysysadmin wrote: post #348

Earlier quoted context omitted.

>Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. US money supply M0 in late 2019 was low around 3.5 trillion. Today it's around 6.4 trillion. This doesn't equate to 100% inflation, but it certainly equates to affording jet skis. M2 money supply is sitting around 21 trillion and ought to be more around 16 trillion. This is the equivalent to 31% locke…

This is not how money works.

>This is not how money works.

Ok, could you educate me please?

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#372

Post by bloopernova »

eddyg wrote: post #301
ajsnigrutin wrote: post #281

Earlier quoted context omitted.

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

You can easily see the massive increase in savings in data from the Fed (for the U.S., at least): https://fred.stlouisfed.org/graph/?g=ysLo Typical growth in household checkable deposits/currency/savings deposits was around $500 billion/year during the mid-2010's. last year it was... $2.6 trillion

$2.6T... good lord. I wonder whether it will level off at $500B/y again?

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#373

Post by politician »

RC_ITR wrote: post #216
rsj_hn wrote: post #214

Earlier quoted context omitted.

I'm not the one ranting here. Biden has 1) put a moratorium on oil and gas leases in Federal lands and waters 2) cancelled one pipeline already and is about to cancel another (which means prices go up as trucks need to ship in the fuel) The above makes oil and gas more costly to extract and to ship, which raises the price. Moreover he is lobbying to remove all investment tax deductions for Oil and Gas (even though ot…

What to Submit On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity. Off-Topic: Most stories about politics, or crime, or sports, unless they're evidence of some interesting new phenomenon. Videos of pratfalls or disasters, or cute animal pictures. If t…

This is such a bad take. HN regularly hosts popular discussions on topics like this. Your attempt to silence discussion is unwelcome and offensive.

Amy Goodman Is Facing Prison for Reporting on the Dakota Access Pipeline 621 pts https://news.ycombinator.com/item?id=12719333

US passes emergency waiver over fuel pipeline cyber-attack 611 pts https://news.ycombinator.com/item?id=27101092

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#374

Post by tim333 »

bezalmighty wrote: post #48
evergrande wrote: post #29

Earlier quoted context omitted.

Actually, that's a good point. Inflation would be even worse if that cash was going into physical goods and services. The government now has an incentive to leave crypto alone aside from providing clarity.

In the macro economic sense, fiat money isn't 'used up' or 'locked away' when you buy something like crypto, it's transferred from your account to someone else's bank account. Worse, it goes through the process of fractional reserve banking and multiplies about ~10x after changing hands repeatedly.

But if someone with money to spend transfers it to a crypto scammers account rather than buying say a car, that avoids inflationary pressure on car prices.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#375

Post by paulryanrogers »

adrianN wrote: post #347
Freskis wrote: post #262

Earlier quoted context omitted.

"we have perhaps a decade to get emissions under control" Every year we're told it's our absolute last chance. Environmental brinkmanship hasn't work and the tune needs to be changed. Literally no economies are planning for mass famine or wars because no-one actually believes that is going to happen, except religious cults.

Every year the goalposts move a little bit. Thirty years ago the goal was ca. 0° of global warming. Now we're debating whether we can muster the political will to limit warming to 2° (unlikely) or 3°.

Could it also be our understanding is gradually improving and the externalities are just lagging more than first thought?

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#376

Post by simonh »

arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

>Yeah there’s more money floating around, so perhaps more people want to spend it, but why?

Even if they don't spend the money, it still drives demand. That's because investment also drives demand. How do you get a return on investment? If you invest in a company, it will expand. Even if you put money into property that will drive renovations and new construction. All profits from investment come from profitable economic activities somewhere down the chain.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#377

Post by rustyminnow »

wexler88 wrote: post #351
Spooky23 wrote: post #81

Earlier quoted context omitted.

It’s a whiptail effect. Shifts in demand and supply cascade and create unpredictable effects. For example, the rush on toilet paper triggered more production, which reduced pulp supplies, which constrained golf cart supply. Why? Seats are made from particleboard, made from pulp. Plus, golf courses bought more carts than usual due to lockdown restrictions.

Was the particleboard really the operative constraint? Or is the explanation about extra demand the correct one? It seems plausible that golf cart manufacturers aren't ready to handle extremely spiky demand. Also, that the toilet paper explanation begins as a joke or a guess, and takes hold because everyone likes it as a story.

> Was the particleboard really the operative constraint? Or is the explanation about extra demand the correct one?

Probably both were contributing factors, along with a slew of other things.

This particular story does seem like it could be a folk-tale explanation, but it's not really about golf-carts - no one cares about golf-cart shortages. It's just a simple example of a broader issue for people to easily grasp. Even if it isn't particularly accurate, the same thing is happening in/across just about every industry

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#378

Post by mmarq »

throaway46546 wrote: post #299
ajsnigrutin wrote: post #281

Earlier quoted context omitted.

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

>Some lockdown policies directly affect your 'need for stuff' I think this was the root cause of the toilet paper shortage. People who normally spend a large portion of the day at the office were now spending that time at home. There was a popular viral video at the time of a man driving around on a forklift in a warehouse full of toilet paper laughing about the shortage, but it was all commercial toilet paper not wh…

The causes of the lockdown shortages are cultural, toilet paper disappeared in Northern European and English speaking countries, while in Italy (and I think in some places in Spain) yeast could not be found.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#379

Post by volkl48 »

dagw wrote: post #337
throaway46546 wrote: post #311

Earlier quoted context omitted.

It took forever for it to get back to normal here. There was limited TP available after the initial panic, but it took months to get anything decent on the shelves. I was ordering it online for a while.

48-72 hours after the initial panic my local large food store had literally more toilet paper on the shelves than I have ever seen in there before. However it was all super low quality and from brands I've never seen before or since.

It's the cheap stuff that you normally find in the bathroom at an average office building, fast food place, etc.

With the world shutting down the companies that supply those kinds of places had a warehouse full of inventory and most of their usual customers either were entirely shut or going through a lot less product.

I'll wager your grocery store called one of them up and got a few pallets to resell, creative move on their part.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#380

Post by ale_jrb »

stuaxo wrote: post #313

"governments transferred a massive amount of money to households". This isn't true in the UK, yet the article mentions a lack of truck drivers here - that's more likely to be due to Brexit and then not wanting to come back after being treated badly last winter.

The furlough system transferred a large amount of money to households, because people had substantially reduced expenses (due to not having to commute, and service-based industries being closed, for example) but only slightly reduced income.

This is generally true in most countries: although the exact mechanism was different, people ended up with more discretionary income and fewer services to spend it on, and so demanded more goods.

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