Inflation Rearing its Ugly Head

[Visbek]

Obviously you're not grasping the whole picture.

Yeah, I am. You can't even read the entire articles you're posting, let alone understand global causality for economic events.

And you are the cherry picker here.

So your rejoinder is "I'm rubber, you're glue!" lol...

We have a global economy. What happens in China and Mexico and the UK reverberates here and vice versa.

LOL

No, dude. You're gonna have to do a LOT better than that.

Go ahead, display your expertise. Explain to us exactly how the federal government of the United States has caused inflation around the globe, just by patching a $2 trillion hole in the US economy. In detail.

And BTW, lumber prices are headed back up.

Uh huh. So, do you accept that spot lumber prices peaked at $1600 in May, and are now down to $615 -- an 88% difference? And that per your own source, prices are generally back to pre-COVID levels?

Do you accept that monthly inflation has dropped the past two months?

Or are you just going to pluck out one or two things that you believe confirms your view?

And if you can't debate without being incessantly snotty - your overriding attribute - I will not continue with you.

Oh, whatever. The bottom line is you can't prove your points, and you know it, so now you have to fall back on this stuff.

 

[Logophile]

Yeah, I am. You can't even read the entire articles you're posting, let alone understand global causality for economic events.


So your rejoinder is "I'm rubber, you're glue!" lol...


LOL

No, dude. You're gonna have to do a LOT better than that.

Go ahead, display your expertise. Explain to us exactly how the federal government of the United States has caused inflation around the globe, just by patching a $2 trillion hole in the US economy. In detail.


Uh huh. So, do you accept that spot lumber prices peaked at $1600 in May, and are now down to $615 -- an 88% difference? And that per your own source, prices are generally back to pre-COVID levels?

Do you accept that monthly inflation has dropped the past two months?

Or are you just going to pluck out one or two things that you believe confirms your view?


Oh, whatever. The bottom line is you can't prove your points, and you know it, so now you have to fall back on this stuff.

I guess you just can't help it. You just can't gather up a group of points and understand a cohesive conclusion. I've said this to you before on other threads: lose the snottiness but you just can't do it. I want to debate adults so we're done. Thanks!!

 

[Visbek]

I guess you just can't help it. You just can't gather up a group of points and understand a cohesive conclusion.

Oh, whatever. I've demonstrated my points, over and over and over again. You even asked me directly for facts and links. When I did so, you produced an utterly terrible excuse to ignore them. I'm shocked. (Not)

And now, you can't answer a straight-forward request to explain why federal spending... at a time when private spending nosedived... somehow caused global inflation. I'm shocked. (Not)

 

[Ishm]

Inflation at this time has a pandemic specific driver as well as any fed policy contributions. People slowed their spending during 2020, and subseqiently saved money and/or reduced debt. Not everyone, but a lot. This is common across many developed countries. So once those people feel safe again (physically and economically) they start spending that extra money. BUT, covid has messed with supply chains. In the US, so has a record drought which has hit food production in volumes and costs. End result is upward price pressure. In some countries the massive slowdown in long and short term worker immigration has also put pressure on wages. All this adds up to inflationary pressure even before the countries start printing money.

The covid, and hopefully the drought impacts should be transitory, but adding money to the money supply may take a while to work through. Unlike previous recessions driven by slow evolving economic fundamentals, the covid recession could come with a very fast recovery, but the fed won't start tightening money supply while there is still significant uncertainty. I'm expecting inflation to return to pre covid low levels in 2022 rather than 2021. Govt (Biden) policies can mostly impact inflation via their impact on consumer confidence.

 

[HangLow]

Where are your links?? Oh yea, that's right. Facts are what you decide are facts with ZERO links. We are still MINUS millions of jobs since the advent of the pandemic. And unemployment took an unexpected turn for the worse last month, right in line with all the inflation news.

Job creation for August was a huge disappointment, with the economy adding just 235,000 positions, the Labor Department reported Friday.

Economists surveyed by Dow Jones had been looking for 720,000 new hires.

August’s total — the worst since January — comes with heightened fears of the pandemic and the impact that rising Covid cases could have on what has been a mostly robust recovery.

The weak report could cloud policy for the Federal Reserve,
which is weighing whether to pull back on some of the massive stimulus
it has been adding since the outbreak in early 2020

Jobs report disappoints — only 235,000 positions added vs. expectations of 720,000

Job creation for August was a huge disappointment, with the economy adding just 235,000 positions against expectations of 720,000.

www.cnbc.com

Thanks!!

 

[Logophile]

Powell: "Tension" between jobs, inflation is the chief challenge facing Fed​

Sept 29 (Reuters) - Resolving "tension" between high inflation and still-elevated unemployment is the most urgent issue facing the Federal Reserve right now, Fed Chair Jerome Powell said Wednesday, acknowledging the central bank's two goals are in potential conflict.

"This is not the situation that we have faced for a very long time and it is one in which there is a tension between our two objectives...Inflation is high and well above target and yet there appears to be slack in the labor market," Powell said at a European Central Bank forum, an apparent reference to the 1970s bout of U.S. "stagflation" that combined high unemployment and fast-rising prices.

The United States is more than 5 million jobs short of where it was before the pandemic. At the Fed's most recent meeting policymakers lifted their inflation forecasts for this year to 4.2% - more than twice the targeted level of 2%. They see that pace easing in 2022 to 2.2%, modestly above where they had pegged it in their previous projections in June.

Powell said the Fed's working "hypothesis" is that inflation will largely ease on its own as the global economy returns to normal after a rocky reopening from the pandemic, a baseline that lets the Fed chief refer to interest rate increases as still "a ways off."

But asked about his biggest concerns right now, Powell referred to the possible clash between the Fed's two goals of stable prices and full employment, a situation that could force the Fed to make trade-offs between the two by raising interest rates to tame prices at a time when it still wants to encourage job growth.

Powell: "Tension" between jobs, inflation is the chief challenge facing Fed

Resolving "tension" between high inflation and still-elevated unemployment is the most urgent issue facing the Federal Reserve right now, Fed Chair Jerome Powell said Wednesday, acknowledging the central bank's two goals are in potential conflict.

www.reuters.com

Ah. No surprise here. Lack of employment and rising prices. Nothing like pumping money we don't have into the economy. Oh, and let's borrow a whole lot more for pork projects. That'll help. Thanks!!

 

[Logophile]

Price pinch: global economy caught in perfect storm

Price pinch: global economy caught in perfect storm​

Britain's biggest chicken producer warned that the country's 20-year cheap food binge is coming to an end and said food price inflation could hit double digits.

"The days when you could feed a family of four with a 3 pound ($4) chicken are coming to an end," Ranjit Singh Boparan, owner of the 2 Sisters Group, said.

An acute shortage of warehouse workers, truckers and butchers as the world's fifth-largest economy deals with Brexit as well as COVID-19 is exacerbating global strains.

Even in Japan, where weak growth has meant that prices of many things - as well as wages - haven't risen much in decades, consumers and businesses are facing a price shock for basics such as coffee and beef bowls.

Japan's core consumer inflation only stopped falling in August, snapping a 12-month deflationary spell. Economists and policymakers expect to see the recent price rises reflected in official data in the coming months.

With central bankers around the world on high alert and inflation in Spain, Ireland and Sweden hitting 13-year highs, European Central Bank President Christine Lagarde repeated that the upswing in Europe is seen as temporary and said there were no signs that the recent surge is becoming embedded in wages.

"The impact of these factors should fade out ... in the course of next year, dampening annual inflation," Lagarde said.

I think anybody with a modicum of economic knowledge should have seen this coming. We have no forward thinkers that have any clout in the US government, never mind in the world today. All of this was predictable and could have been avoided. If I could see it - I've been posting about it for months - governments across the globe should have certainly have been able to see it and prepare for it. From energy prices to labor shortages, we've had the US government literally working against us, as well as the Chinese government working against its own people by gifting them with energy shortages WHILE STILL IN A PANDEMIC. And the EU can't get a handle on this either which makes no sense. Shortages started last year. Legarde couldn't see this coming, and now predicting it will FADE. It hasn't "faded" so far, and it's been over a year. Why is she there?? Why do we have such dumbasses as lawmakers and leaders?? They have no forethought at all. Thanks!!

 

[highroller]

Price pinch: global economy caught in perfect storm

Price pinch: global economy caught in perfect storm​

Britain's biggest chicken producer warned that the country's 20-year cheap food binge is coming to an end and said food price inflation could hit double digits.

"The days when you could feed a family of four with a 3 pound ($4) chicken are coming to an end," Ranjit Singh Boparan, owner of the 2 Sisters Group, said.

An acute shortage of warehouse workers, truckers and butchers as the world's fifth-largest economy deals with Brexit as well as COVID-19 is exacerbating global strains.

Even in Japan, where weak growth has meant that prices of many things - as well as wages - haven't risen much in decades, consumers and businesses are facing a price shock for basics such as coffee and beef bowls.

Japan's core consumer inflation only stopped falling in August, snapping a 12-month deflationary spell. Economists and policymakers expect to see the recent price rises reflected in official data in the coming months.

With central bankers around the world on high alert and inflation in Spain, Ireland and Sweden hitting 13-year highs, European Central Bank President Christine Lagarde repeated that the upswing in Europe is seen as temporary and said there were no signs that the recent surge is becoming embedded in wages.

"The impact of these factors should fade out ... in the course of next year, dampening annual inflation," Lagarde said.

I think anybody with a modicum of economic knowledge should have seen this coming. We have no forward thinkers that have any clout in the US government, never mind in the world today. All of this was predictable and could have been avoided. If I could see it - I've been posting about it for months - governments across the globe should have certainly have been able to see it and prepare for it. From energy prices to labor shortages, we've had the US government literally working against us, as well as the Chinese government working against its own people by gifting them with energy shortages WHILE STILL IN A PANDEMIC. And the EU can't get a handle on this either which makes no sense. Shortages started last year. Legarde couldn't see this coming, and now predicting it will FADE. It hasn't "faded" so far, and it's been over a year. Why is she there?? Why do we have such dumbasses as lawmakers and leaders?? They have no forethought at all. Thanks!!

Open up free trade, legalize slavery, smash the unions, and outsource the higher income jobs. Inflation solved.

 

[Logophile]

Open up free trade, legalize slavery, smash the unions, and outsource the higher income jobs. Inflation solved.

Do you have anything productive to say?? I don't think you're going to be so glib in a few months. Thanks!!

 

[highroller]

Do you have anything productive to say?? I don't think you're going to be so glib in a few months. Thanks!!

How is that not productive?

There is a lot that can be done to solve the inflation issue (which I don’t even think it’s an issue)

You can raise taxes, you can raise interest rates, you can increase production by bringing in military contractors to do the work.

 

[highroller]

Why is 4% inflation the end of the world? Can somebody answer that?

 

[Logophile]

How is that not productive?

There is a lot that can be done to solve the inflation issue (which I don’t even think it’s an issue)

You can raise taxes, you can raise interest rates, you can increase production by bringing in military contractors to do the work.

So why aren't we raising the interest rates?? Anybody with half a brain knows that we're above the official 5.3 percent mark, and well above the 2 percent projection. As usual, the Feds with the blessing of Biden are a day late and a dollar short, and we're going to pay dearly for it. Thanks!!

 

[Logophile]

Why is 4% inflation the end of the world? Can somebody answer that?

Because it's NOT 4 percent. It's well above that - by the Feds own admission - and rising. Thanks!!

 

[highroller]

Anybody with half a brain knows that we're above the official 5.3 percent mark, and well above the 2 percent projection.

I’ve been hearing this the last 12 years that we are lying about the inflation rate.

Doesn’t matter who the Fed president is
doesn’t matter who is in Congress
doesn’t matter who the president is
doesn’t matter what parties or people in charge so what do you want to do?

it boils down to one thing. This isn’t a political issue, this is a class issue. Although a lot of people would say class issues are political issues.

 

[highroller]

So why aren't we raising the interest rates?? Anybody with half a brain knows that we're above the official 5.3 percent mark, and well above the 2 percent projection. As usual, the Feds with the blessing of Biden are a day late and a dollar short, and we're going to pay dearly for it. Thanks!!

2% is not a projection, it is the target. If the Fed refuses to raise rates, why don’t we raise taxes?

There are two sides to national policy there is the monetary policy set by the federal reserve and the fiscal policy set by the federal government. When the economy is doing bad, you can spend more money and lower interest rates, when the economy is doing good you can raise taxes and interest rates. That’s called Keynesian economics.

 

[SMTA]

Well, it's not too late to start protesting - writing your congressman or calling Senators - to stop the excessive borrowing. That's for openers. Thanks!!

That’s not the cause.
Spin again

 

[Logophile]

2% is not a projection, it is the target. If the Fed refuses to raise rates, why don’t we raise taxes?

There are two sides to national policy there is the monetary policy set by the federal reserve and the fiscal policy set by the federal government. When the economy is doing bad, you can spend more money and lower interest rates, when the economy is doing good you can raise taxes and interest rates. That’s called Keynesian economics.

That's extremely simplistic. We are in a perfect storm, and if we don't get out of it by taking steps now, we will be grappling with a very rocky economic situation. Here are Some of the issues:

Labor shortage - contributing to broad based inflation
Goods shortage - contributing to broad based inflation
Fuel shortage - contributing to broad based inflation
Excessive federal borrowing - increasing an already unprecedented debt load
Excessive monetary printing - in other words, invented money - devaluing the dollar
Excessive federal spending - spending 1.20 for every buck we take in - contributing to debt load
Extremely low interest rates - encouraging broad based borrowing
Stifled job growth - for several reasons, but for the sake of argument, let's assume the overriding is government welfare

Tell me how all of these factors combined doesn't add up to a serious economic impact. Thanks!!

 

[SMTA]

We know a lot more medically now than we did in 1918.

Not according to self-medicating, medically uneducated anti-vacxxers.

 

[highroller]

Stifled job growth - for several reasons, but for the sake of argument, let's assume the overriding is government welfare

Wait, why should we just assume that?!?

 

[Logophile]

Wait, why should we just assume that?!?

We don't have to. It's merely A contributing factor. There are all kinds of reasons for stifled job growth. Small businesses out of business hence less jobs. People unwilling to work for lower wages which is all Mom and Pops can afford so they go out of business. Families supporting those unwilling to work or too afraid to work due to covid. People getting extended unemployment benefits, albeit that faucet has recently been all but shut off, the government trying to force a vaccine mandate which has people walking off jobs. The list goes on. Thanks!!

 

[Kushinator]

We don't have to. It's merely A contributing factor. There are all kinds of reasons for stifled job growth. Small businesses out of business hence less jobs.

Uh huh...

Why do you believe there are less jobs?

People unwilling to work for lower wages which is all Mom and Pops can afford so they go out of business.

Mom and Pop businesses can only afford low wages? Sounds like these businesses have a really shitty business plan.

the government trying to force a vaccine mandate which has people walking off jobs.

The newest Faux news mantra... it's not the surge in COVID-19 cases, hospitalizations, and deaths that has slowed employment growth... it's these pesky mandates.

Wow... and you are legally allowed to vote?

 

[bave]

Uh huh...

Why do you believe there are less jobs?

While I don't think there are less jobs, your chart doesn't have anything to do with total labor count either. All that shows is that we are at a record number of openings while still at an elevated unemployment rate. Something I think has a lot to do with covid related stimulus and welfare programs.

Mom and Pop businesses can only afford low wages? Sounds like these businesses have a really shitty business plan.

You don't think small businesses are at a competitive disadvantage? Look at their tax structure, capital costs, and pricing power just for starts.

The newest Faux news mantra... it's not the surge in COVID-19 cases, hospitalizations, and deaths that has slowed employment growth... it's these pesky mandates.

I don't think it is people walking off the job/vax mandates doing it. I think it is people who spent the last 18 months sitting at home not working living on the tit getting used to it and preferring to not go back to work and having a mild excuse to do so.

 

[Kushinator]

While I don't think there are less jobs, your chart doesn't have anything to do with total labor count either. All that shows is that we are at a record number of openings while still at an elevated unemployment rate. Something I think has a lot to do with covid related stimulus and welfare programs.

Consider what's actually being argued by the individual i have responded to: he is explicitly making the claim that so many small businesses have gone under that the current job availability has sunk. I am merely pointing out that this isn't the case.

You don't think small businesses are at a competitive disadvantage? Look at their tax structure, capital costs, and pricing power just for starts.

Depends on the business... depends on the industry. Retail and manufacturing of normal goods? Definitely. But in the services sector, small business is the driver as they necessarily possess the type of local tacit knowledge that gives them an edge productivity wise.

Smaller manufacturers and retail tend to focus on niche aspects of these markets. Walmart isn't going to be a major competitor in the raw honey market.

I don't think it is people walking off the job/vax mandates doing it. I think it is people who spent the last 18 months sitting at home not working living on the tit getting used to it and preferring to not go back to work and having a mild excuse to do so.

Well, i think your take on the situation is driven purely on the basis of partisanship.

 

[Visbek]

Tell me how all of these factors combined doesn't add up to a serious economic impact.

How many times do I have to explain this to you?

• Wage increases only have a small impact on inflation (e.g. there was a labor shortage before COVID, but inflation was still low)

• Fed monetary policy isn't causing inflation, as shown by decades of people totally blowing that prediction

• The Fed is watching inflation like a hawk, and will act if it thinks inflation is becoming a serious issue

• Federal deficits don't cause inflation, as seen by decades of low inflation regardless of any year's deficit

• Federal debt doesn't cause inflation, as seen by decades of low inflation and growing debt

• Federal spending doesn't cause inflation, especially when what it's doing is filling in a huge hole in demand caused by a recession

And the icing on the cake:
• We're seeing the same types of inflation globally, despite different nations adopting different fiscal, monetary, labor, spending and trade policies

I.e. on a fundamental level, your analysis does not work. The cause of the moderate inflation we're seeing now -- and yeah, it's moderate -- is not government policies, it's the pandemic.

 

[Visbek]

While I don't think there are less jobs, your chart doesn't have anything to do with total labor count either. All that shows is that we are at a record number of openings while still at an elevated unemployment rate. Something I think has a lot to do with covid related stimulus and welfare programs.

The evidence is very clear: It's not the stimulus and welfare programs.

• The number of people voluntarily quitting is hitting record numbers -- and even though it's a pandemic, you are not eligible for unemployment insurance if you quit your job.

• Polls show that the biggest issues are concern about getting the virus (did'ja notice that there was a huge surge recently?) and concerns about child care. There's also some indications that low-wage employees don't enjoy being treated as punching bags by customers who are furious about things completely unrelated to the employee.

• The US hasn't sent out a stimulus check in over 6 months.

• The days of an additional $600 or $300 in UI checks are over.

• Cutting the extra UI from $600 to $300, and then $300 to $0, did not cause surges of people looking for work.

• States that cut back on unemployment insurance early did not see a significant increase in people looking for work.

• The number of TANF recipients has not significantly changed during the pandemic.

• Low-income workers qualify for many of the same benefits as those who aren't working (notably AFDC/food stamps).

• College grads are less likely to work right now. They don't qualify for UI, and tend to have large debts.

College graduates in the year of COVID-19 experienced a drop in employment, labor force participation

The challenges of a COVID-19 economy are clear for 2020 college graduates, who have experienced downturns in employment and labor force participation.

www.pewresearch.org

• And of course, there was a labor shortage before the pandemic.

Your theory doesn't explain what's actually happening, unless you think that most Americans can live for 2 years off of a $1400 stimulus check.

You don't think small businesses are at a competitive disadvantage?

They are. However, tons of research shows that things like increases in minimum wages, or even recessions, don't actually have an impact on business failure rates.

E.g. When you look at the survival rates of businesses since 1994, there's very little difference over time, regardless of the prevailing conditions. Roughly 1/2 of businesses were gone by year 5, regardless of whether that 10th year was in 1997, 2002, 2008, or 2011.

I'd add that merely saying "small businesses have it tougher!" doesn't mean that they should get a pass on underpaying, mistreating, disrespecting or otherwise undervaluing employees. It is, after all, a labor market, and right now employees are in demand. It is a bit crazy to assume that someone should work at Sal's Pizzeria, for the lowest possible wage and minimal (if any) benefits, out of the goodness of their hearts and because poor Sal needs a break.