Inflation Relief Checks.

a reply to: asabuvsobelow

no, what's causing this increased inflation is too much demand with not enough production to meet that demand because people are buying record amounts when production was reduced due to shutdowns, so until production recovers its normal level costs will remain elevated.

inflation is just scarcity of a product making it more valuable, its not about how much money is in the economy, if that was the case the value of dollars would be dropping right now, but its increasing in value and causing investors and industries to return to the US because its become less profitable to do things elsewhere once again.

a reply to: asabuvsobelow

No. They fail to get that money is symbolic rather than intrinsically valuable in its own right.

a reply to: asabuvsobelow

"And I've been putting out fire
With gasoline"
-David Bowie

a reply to: namehere

Inflation isn’t just scarcity, but you’re right that it can and did play a part. I think it’s fair to say we see that highlighter in many fossil fuels right now.

But in the macro market, I’d say the increase in supply of money played a bigger part in the broader picture. A lot of the supply issues have been resolved (not all, especially chips and certain products from China with their continued shutdowns).

This can be proved by looking at publicly traded companies posting record quarters and margins. Granted, they’re trying to recoup hits they took during COVID, but many have them have made those back and then some.

The housing market actually tells both stories. There was a decrease in supply because many stopped building in 08’, and an increase in demand because of the (previous) low interest rates. Currently we still see a problem because people with cash in hand aren’t effected by interest rates and are buying to rent or Airbnb.

But ultimately I see your point, and it stands, it just is only a part.

a reply to: namehere

Shortages were also due to reduction in forces in the start of the pandemic quickly followed by a huge hiring surge because of the demand spikes. That also led to some crazy salaries out there due to shortage in labor market, which also drove up demand due to increased salaries.

a reply to: mzinga



I focused on monetary policy, but you’re right one of the (hopefully) unintended consequences was a disruption in the supply chain with newly injected currency.

It certainly exacerbated the problem.

a reply to: CriticalStinker

They kinda went hand in hand to create the perfect storm. I'm in supply chain and have been working with companies all fighting the issue, but totally forgot about what the fed was doing which you summarized perfectly

a reply to: mzinga

It was a black swan event. we’ve seen cyclical market downturns every decade or two, but that was the biggest economic event I’ve seen in my life. I can’t even think of something that rivals it since say WWII which was coupled with the depression.

Tax reduction actually does work to reduce the effects of inflation. But it is an extremely limited resource and can create a bigger problem if not managed properly.

If your gross income is taxed 20%, then your gross income has 80% buying power. If your taxes are decreased 10%, the same gross income now gives you 90% buying power. Whether that reduction is in the form of monies never taken from you or returned via rebate works out the same.

What doesn't work is putting money from nowhere in the hands of the general public. "Everybody gets a check" puts groceries on your table today, but guarantees those same groceries will cost more a month from now. When the checks stop coming the whole system collapses. Once you start down that path, either you find a permanent solution or accept the inevitable.

a reply to: CriticalStinker

This one is going to flip, and when it does we will have major issues. Problem with supply issues is that the demand is inflated - and once those constraints are eased it flips.

I already had a good example working with a major electronics distributor.

During the first part of the pandemic with everyone working at home, there was a huge run on chromebooks as a cheap home computer option. This caused chromebooks to be out of stock everywhere .. This also leads to huge increases in lead time of products when they are on backorder.

Automated supply chain systems detect this change in lead time - and since they have replenishment setup automatically (and this lead time gets factored into their purchase signal) it increases the amount they have/had on order from Chromebook suppliers. During the height of the pandemic this customer of mine had over a huge amount of Chromebooks on order from suppliers. I warned the distributor that as soon as HP/Lenovo etc clears their supply shortages they are going to ship you this entire order - when you get supply you will see that as soon as you satisfy pent up demand the year long backlog you think is there will disappear and you won't need what you order.

Sure enough, chromebook suppliers ramp up production ship out all of their products, and those products make it out to the market .. Guess what happened? Chromebook demand normalized, and now the distributor is sitting on a years worth of inventory.

Couple in the fact that as the manufacturers blasted out all of that product, they also gobbled up major semiconductor processors/memory etc which then causes shortages for other products that they went into...

All in all it creates a huge mess - and one that is going to take a while to work out. We are still seeing the semi shortages out there - and those likely will remain as new capacity comes online.

Inflation Relief Checks.

www.usdebtclock.org...

m2 money supply-$21+trillion.

War on energy.

There is no way out of this S#show especially with China's world domination plans.

a reply to: mzinga

They’re learning the problems of just in time supply chain.

It’s still more efficient in the long run, since production is more closely tied to demand. The problems with chips is they plan the runs around 18 months out. They have to have purchase orders to build them into supply runs. If they go off indicators for now, the landscape may change in a year and a half.

I’m really concerned with the China Taiwan situation though. A vast majority of chips in the US come from there, and recently we put certain chip sanctions on China that is probably increasing their appetite to absorb Taiwan fully. TSMC has already said they’ll burn their sites down if China invaded, so even if we provided an off ramp with China to normalize relations, the damage is done and we’re screwed. We’re about ten years off from our ambitions to offset our reliance on Taiwan, and in government years that means we’re 20 years off.

a reply to: CriticalStinker

Intel will be having a lot of capacity coming up in the next 1-2 years US based that should reduce this risk, and they are going after TSMC's market.

a reply to: namehere

no mate that is simply supply and demand and that is a result of inflation yes but it is not inflation itself.

Inflation is the over printing of money in turn devaluing the money , The shortage of supply your talking about was caused by the pandemic and for the most part it was and is an artificial shortage . Keeping supply ships out in the water not allowing them to unload and shutting down massive warehouses and production plants because apparently they carry Covid is what caused the supply shortage .

you say the dollar has not lost any of it's value and I'm afraid you are very wrong because that is exactly what Inflation is .

a reply to: asabuvsobelow


12.01.2022

Today, Biden's Treasury Secretary said Americans are living TOO GOOD, which is why we're being punished with/by inflation.

Yellen Scolds Americans: www.foxnews.com...

In other words, we're reaping what we're sowing, and need to become more "Third-World-like".

Is Yellen RIGHT or WRONG?