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"Hello ma? Ma, the screen is still red! Has been red for months now! We are turning into commie/tankie, ma! Help me, ma!"
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American Economics Thread
- Thread starter Bernard
- Start date
"Hello ma? Ma, the screen is still red! Has been red for months now! We are turning into commie/tankie, ma! Help me, ma!"
I remembered people lost their mind when the yield curve inverted for the 1st time. Today 2y10y spread is almost -0.5. Nobody gave a F anymore
Tight labor market and skyrocket rental prices are now the main causes of inflation. Not sure the Fed has what it takes to bring the housing prices down or induces a recession or slowdown to resolve the labor shortages.
Covid is still playing a major role in inflation but probably more to the service sector now. Ukraine conflict would still keep the energy and food price high so also a factor.
It doesn't have the now.
The article posted is from April, I have an article from July:
This one is from September showing how China manages to affect the supply chain:
This one from the same month shows how the supply chain is changing:
What makes supply chain bottlenecks and global input shortages even more severe is the huge demand shock generated by the printing of dollars by the Fed and the US Treasury.
That's the problem with ignoring the money side of the equation. If the problem is supply, raising interest rates to try to contain inflation would solve the problem, but there's no way the Fed can do that without triggering a recession. The other initiative is precisely not to print any more and this is simply impossible in the current US budget reality.
Just like the other two possibilities of correcting the problem through monetary policy and also now trade(no war) is impossible to implement, the problem of China's bottleneck is still serious, but at some point it will be solved.
supercat
Major
The real reason the Fed cannot lower inflation by hiking interest rates:
A living example of monopolistic price hikes:
A living example of monopolistic price hikes: