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I hear politicians in all there wisdom are considering handing out inflation checks...so probably never
Here before this thread devolves into hyper-partisan/anti-Biden drivel.
Incoming 10 page essay from PE GME guy seething mad
And retaliation from Finance ABC or Ctrl Alt Left
[insert copy+paste non sequitur incel retort]
Cope and seethe you sad little Berkeley reject.
Amazing how liberals already in the comments acting like inflation is a joke
What do you want me to do about it?
Go storm the capitol? Maybe I’ll listen to Alex jones infowars podcasts for solutions
Inflation is basically the imbalance between supply and demand.
Supply side inflation occurs when external shocks decreases/limits the supply of goods and consequently increases its prices. Through supply side inflation, companies down the supply chain are eventually forced to increase their prices as the cost of goods increases. Back in March 2020, inflation was mainly a supply side factor due to supply chain disruptions. Increasing interest rates cannot solve supply side inflation, which was why Powell emphasized a lot on the transitive inflation narrative in hopes that prices go back to normal once the supply chains are back to normal.
The other side of the inflation equation is demand side inflation, which is primarily based on inflation expectations. With high inflation expectation, consumers purchase more goods in the present than in the future as they believe inflation will be higher in the future, which pushes prices further and creates a cycle. Easy money through low interest rates and QE can theoretically be catalysts for a inflation spiral to begin. However, the most common case as seen in the 70s and now is when supply side shocks start the demand side inflation spiral. Overall, since interest rates and QT are able to affect the demand of consumers, these tools are effective to tame against demand side inflation. This is where we see the “soft landing” narrative come into play in which the fed is trying to raise rates and enact QT in order to tame inflation but only to the point that the economy doesn’t land into a deep recession.
Hope this helps a bit in explaining inflation.
Chad AM intern
If and when the war in Ukraine ends, when global supply chains return to some semblance of normalcy... that'll do it. $1,400 subsidy payments to households aren't driving this.
Worth noting that most of the people (myself included) are young enough to only remember the last 10-15 years, which has seen historically low inflation (well under 2% for most of that period), whereas even in the 90s, which was hardly an inflationary environment, it was (slightly) north of 3%. Obviously 8 or 9% inflation is closer to what we saw in the 70s and 80s with the hyperinflation of the late 70s/early 80s, but even if settles back down into the 3-4% range that's hardly a historical anomaly, whatever Mr Biden's detractors will come on here and say. May be tough to recall, but the Fed actually had a lot of difficulty hitting its inflation targets for most of the 2010s
Well that may be true, but is it relevant to this discussion?
And while sure, the stimulus checks aren't helping inflation, they're also helping households afford groceries and gas a shit, so I'd hardly say that's a meaningful cause. It's no fun blaming outside events like the war in Ukraine, though, for either party, so of course it'll be Biden's fault every night on Fox News. We've seen stimulus checks handed out before and they had no real shift on inflation, so kinda crazy to assume it's a major driver here.
My opinion is that this inflation we're seeing is supply side constrainsts as opposed to demand side, so interest rate hikes won't do anything to tame inflation until the war settles down and other issues calm down too
However, inflation doesn't register asset prices where we would've seen inflation since 2012 because of QE and 0 interest rates, so the rate hikes are good
Short-term: inflation ends when the scumbags at the Federal Reserve decide to actually make an effort by quitting with the market backstopping/continuous quantitative easing bullshit and jack rates into the double digits (no more of these weak-ass 50-75bp hikes) which crashes the stock market like the current admin's approval rating.
Long-term: when the US government as a whole decides to stop running a massive deficit by sending hundreds of billions of dollars abroad to bride foreign countries, fighting endless wars to feed the military industrial complex, funding continuous administrative bloat with burdensome and unending regulation on the private & public sector, and supporting the giant Ponzi scheme that is social security.
Short-term might happen after midterms/the next Presidential election depending on the outcomes - I think if Democraps keep all of their majorities through midterms (which I have bet money they do not) this gets dragged out to the next Presidential election but if Republicuks get control maybe it crashes and Dems get to point the blame at them. Depending on the outlook of the next Presidential run maybe it dumps just before primaries to make ditching Biden more palatable for a living, breathing candidate or it dumps if a Republican wins for same reason as above. Or maybe the US's military hold over the world's political structure and the petro-dollar peg are just that powerful and we can keep getting away with it for even longer - god knows if it's hitting us this bad it's knee-capping the rest of the world given that we're the world reserve currency.
Long-term doesn't happen unless there's a total revamp of the US government which more than likely never happens. If it does it will happen after we have a massive economic depression that makes the 1930s and GFC look like fond memories, perhaps a Great Reset of sorts. Or we just have a huge war to jump start the Western economies and the powers that be draft all the useless eaters to become infantry fodder. Only time will tell.
Seriously, I've long said the only places the U.S. should be spending money on outside the country is Latin America (because it is geographically proximate & so it's just national security) and secondarily maybe Europe. Enough with wasting colossal resources in the Middle East and Asia
Agreed on principle, but I also understand why a lot of South America is weary of the US "trying to help". The CIA did quite the number down there, which makes it all the more hilarious watching people try to pretend J6 was a "coup" against the Constitution led by a bunch of meemaws and morons that could've actually endangered the US govt. John Bolton got offended the other day when the J6 committee tried to say it's not hard to plan a coup which was just golden, particularly when you look at his involvement with Venezuela.
MSNBC: Why John Bolton's bragging about planning coups is so revealing
Inflation growth will go down but the increased prices are here to stay. Trust me if we were to see absolute value of prices for down, ie deflation that would even be nastier than the reverse. People wouldn’t be incentivized to spend if they can buy at cheaper prices in the future. There is a reason why the fed allows for a healthy 2% inflation.
Related: They fucked shit up with the PPP handouts. We'll see the effects of that if we get a recession.
Because of 9/11 the media just forgot to ever bring up the DOD misplacing literal trillions as revealed the day before. I'm sure the natural disaster that was Covid will be more than enough of an excuse for the government to forget to follow up on a few misplaced hundred billion that were earmarked for a meaningful cause to help the American people - regardless of where the money actually ended up.
They should have had a payback clause of some sort tied to profitability of the business so that it literally wasn't handed out. . Literally padding the business owner's pockets at the expense of the tax payer. It's the American way i guess.
PPP + stimulus checks + Biden killing off Keystone and antagonizing Saudi Arabia resulting in sky high oil prices are the main culprits
I.e. This problem was overwhelmingly created by Democrats. First round of stimulus + PPP made a ton of sense, but every subsequent round was a colossal waste of resources & is now a sneaky tax on the middle class. Supply chain was always going to be an issue outside of our control largely (except for idiotic regulations and policies) but the Dems managed to screw up everything that was within our power & then some
This is lazy thinking and logic. Biden wasn’t even president for PPP and Trump Bucks, come onnn mannnn
75% of the paycheck protection program went to business owners, mostly large businesses. 25% went to actual workers at risk of losing their jobs. 800 billion in total, all to the deficit. It was yet another Republican attempt at “socialism for the rich, pray some of it trickles down”. And of course it failed. No idea why people keep falling for it. Jared Kushner got millions of loans and many of them didn’t save a single job.
Saw this everyday at work - pissed me off so much I started looking for a new job. I didn't want to see it anymore.
Inflation ends when Joe Biden begins prioritizing neglected Americans instead of blindly hemorrhaging billions of dollars to a regime half a world away that has literally been proven to be corrupt, a regime whose leader literally insults Americans on social media and in gilded Vogue interviews for... caring about gas prices, food, and, well, fellow Americans. It's really not that complicated.
Aid to Ukraine isn’t a significant cause of inflation. We spend more than 20x that amount every year on our own military since the war on terror began and inflation was at historical lows the whole time. Daddy must have spend a loooot to get you into Harvard.
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