Inflation" What is it? What causes it? What is the fix?

[ICU 812]

Inflation: What is it? What causes it? What is the fix?

The pol of economic expertise and experience on this set of forums is deep and wide. I consider myself to be sitting on the edge of that pool dabbling my toes in the water. There are lots of folks here with an excess of financial resources tthat allows them o reputedly hobby their brains out. Without sarcasm or mockery, I say, good for them!

And so, I pose these questions regarding the national economy. Responses do not need to reference political patties or political personalities, just the workings of macro-economics and the polocies that affect how it works.

[1blackman1]

Current inflation is driven by supply chain issues starting mainly with pandemic closures in Asia. Then spending money was made more available by the govt concurrent with those supply issues. There was also the phenomenon of people job jumping which exacerbated the issues on both end. More wages so more spending. Fewer workers causing supply constraints.

Supply was decreased causing prices to rise. However because there was free money purchases continued causing more price increases.

Since we’re still feeling the effects of the supply shortages prices have remained high. That’s the reason the fed is trying to slow spending which would, in turn, allow supply to catch up to demand, thereby driving prices downwards.

What hasn’t happened is reduced spending. So inflation remains where it is. Until the above issues resolve inflation isn’t going anywhere.

[oilfieldace]

Inflation is driven by Biden policy , if anyone thinks anything else they are totally lost

[WTF]

Originally Posted by oilfieldace

Inflation is driven by Biden policy , if anyone thinks anything else they are totally lost

You haven't a clue if you believe that.

Maybe you should Google... Federal Reserve.

You have carlots half full and prices sky high. That has nothing to do with Biden. That is a supply side issue.

Many of you need to distinguish between Political bullshit and economic facts.

[1blackman1]

WTF, we both know that telling them facts only confuses them. They need guidance from Tucker on how to respond.

[Levianon17]

Originally Posted by WTF

You haven't a clue if you believe that.

Maybe you should Google... Federal Reserve.

You have carlots half full and prices sky high. That has nothing to do with Biden. That is a supply side issue.

Many of you need to distinguish between Political bullshit and economic facts.

There ya go that's exactly right.

[farmstud60]

Originally Posted by 1blackman1

WTF, we both know that telling them facts only confuses them. They need guidance from Tucker on how to respond.

You are spreading total bull pucky, not facts.


75% of inflation is caused by Biden policies restricting fossil fuel production, increasing regulation on all businesses, and increasing spending at the same time they stopped using covid as an excuse to shut businesses. The Fed was slow to react, now is going on overdrive raising interest rates which is about to send the economy into an economy wall.


Couple this with the fact that we have the longest LaNina weather pattern causing lower crop output doesn't help the situation either.


Biden's idiot war on fossil fuels and weakness on foreign policy more or less gave Putin the green light to go to war with Ukraine, and helped to finance that war with Russia gaining lots of money on oil sales before the Ukrainian war.


Then there is the Increase Inflation Act, which is what really it caused. Not the lie in the title of Inflation Reduction Act that idiots believe.

[Tiny]

Originally Posted by ICU 812

Inflation: What is it? What causes it? What is the fix?

The pol of economic expertise and experience on this set of forums is deep and wide. I consider myself to be sitting on the edge of that pool dabbling my toes in the water. There are lots of folks here with an excess of financial resources tthat allows them o reputedly hobby their brains out. Without sarcasm or mockery, I say, good for them!

And so, I pose these questions regarding the national economy. Responses do not need to reference political patties or political personalities, just the workings of macro-economics and the polocies that affect how it works.

Texas Contrarian and Lusty Lad know more about this than all the rest of us combined. Maybe one will weigh in.

Blackman and WTF provide the reasons, although they conveniently underemphasize the $5 trillion in stimulus dumped into the U.S. economy (25% of GDP!!!), and in particular the $1.9 trillion American Rescue Plan, which was passed over the kicks and screams of two of the most prominent Democratic Party economists, Larry Summers and Jason Furman.

I'd add the piss poor investment environment for oil and gas E&P companies and refiners. Institutional investors have arm twisted them to emphasize dividends and buybacks over investment, given that Progressive Democrats will put the companies out of business if they get their way. Would OPEC be "cutting" 2 million barrels a day if it thought U.S. domestic producers would ramp up production hugely if prices go back up to $100 a barrel? I think not. Admittedly though, WTF's and Blackman's other reasons are a bigger reason for high inflation than oil and gas policy.

[WTF]

I haven't discounted the infusion of money into the economy....but that was from both parties.

Investors call for a decent ROI instead of low oil prices....imagine that!

The Saudi's cut production because they want more pro Saudi/Russian Republicans elected in the House. If you haven't noticed it now appears it is Europe and the US vs Russia, China and the Saudi's.

And TC might know more than most but lustylad don't know the difference between his bunghole and a dry well.

[WTF]

I agree with this mainly....I think the Fed is fucking up. Inflation was caused by a one off, never seen before

https://time.com/6222613/painless-fix-high-inflation/

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If you listened to what the Fed and many economists are saying, you’d hardly be aware that this has been a two-year period unlike any other. You’d think today is normal and regrettable bout of too much money, too much demand, and high wages. That is not the case. This time it’s different.

In 2020 and in 2021, the U.S. government injected as much as $5 trillion into the system between the two emergency COVID-19 stimulus bills of April 2020 and March 2021 and the expansion of the Federal Reserve balance sheet. That was matched throughout the world by trillions more of stimulus from other countries. That money, for the first time in memory, went directly not just to companies and to banks but also to individuals and small businesses to keep them afloat when the government-mandated shutdowns froze economic activity and mobility. That level of spending surpassed the entire New Deal.

Then, almost simultaneously, the world opened up beginning in the summer of 2021 as vaccines were rolled out, and whatever vestiges of shutdowns remained were largely lifted by this spring. All of the current high inflation begins at that time and was then exacerbated by Russia’s invasion of Ukraine in late February

[ICU 812]

My thanks to Blackman1 and WTF for sober and straightforward responses that do not involve calling out personalities by name.

Also thanks to Tiney for his detailed input.



Oilfieldace: Which policies do you refer to and how do they affect inflation?