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0 pointstsunamifury3y ago0 comments

This isn’t 1980, raising interest rates doesn’t fix supply chain issues. This isn’t inflation it’s a real supply shortage. By the fed doesn’t seem to know how to help with that so, let’s just tank everything. Killing demand to get workers back to lower wages and unemployment up seems to be that real goal.

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Matticus_Rex3y ago

There is a supply shortage in some areas... and there is price inflation as well. That's actually what you'd expect with a supply shortage that isn't very evenly distributed anyway, but when you add dramatic expansion of the money supply in a period of very low interest rates on top of that, you'd certainly expect to see dramatic price inflation to match, as we have. The idea that a supply shortage is causing all of this seems insane.

mywittyname3y ago

The "expansion in the money supply" has been going on for 15 years. The supply issues started 2.5 years ago. The inflation started about 2 years ago. So only one of those factors is correlated with serious inflation.

The explicit goal of expanding the money supply in 2009 was to drive inflation in order to combat deflation. It didn't work. We ended up with a decade+ long period of low/no inflation.

Even today, the USD is growing stronger relative to other currencies. So in spite of this continued money supply expansion, Americans are experiencing inflation the least of anyone in the developed world.

zeroonetwothree3y ago

Money supply has roughly doubled since 2020. So you are not correct.

https://fred.stlouisfed.org/series/M2SL

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Matticus_Rex3y ago

The money supply has expanded as much since the monetary policy shifts of 2020 as it did between 2011 and those shifts, and inflation is a lagging indicator. You can't use "oh, we've expanded the money supply before and it hasn't caused inflation" to dismiss the idea that expanding the money supply at several times the speed is going to have a much more dramatic inflationary effect.

baggy_trough3y ago

It's both.

j / k navigate · click thread line to collapse

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Matticus_Rex3y ago

mywittyname3y ago

The explicit goal of expanding the money supply in 2009 was to drive inflation in order to combat deflation. It didn't work. We ended up with a decade+ long period of low/no inflation.

zeroonetwothree3y ago

Money supply has roughly doubled since 2020. So you are not correct.

https://fred.stlouisfed.org/series/M2SL

2 more replies

Matticus_Rex3y ago

baggy_trough3y ago

It's both.

j / k navigate · click thread line to collapse