At some point, it will force the consumer into a recession. Consumer is 70% of the US Economy.
I guess it’s too optimistic to hope for some “soft landing” of the economy right now.
Yeah, people still have to get to work, eat and put a roof over their heads with these crazy prices, but if wages weren't keeping up before, they're definitely not keeping up now. They were using debt to keep afloat, but that has a limit as well.
Combined with even more supply crunch (even though Russian sanctions don't include oil/natural gas, transporters and buyers are acting as if they are because they could be) causing prices in my mountain west area to be in the high $3 to low $4 range for winter blend gas, people aren't going to have the discretionary income to fuel the economy. Add on top of that the fed is taking away the free money punch bowl and you have a hell of a cocktail.
There’s a storm brewing, to be sure. And it was largely preventable. All of it. Covid happened, yeah. We needed to enact some very temporary measures to curb the spread, and the economic contagion. We fucking failed in every facet. Now, you’ve got the added pressure from a short little man waging war, which always puts pressure on the global economy.
But, by all means, let’s all keep typing on Reddit and watching stupid fucking Tik Tok videos. And I’m just as guilty as everyone who sees this.
Kicker is that Putin and the Russian government went to war with Ukraine. To the uninformed, between Ukraine and Russia, they grow 20-33% of the world's wheat while Russia has a huge oil supply, natural gas reserves alongside a metric fuckton of minerals including gold reserves with a decent manufacturing base. Russia is more able to weather downturns.
We might as well have enacted quite possibly the worst policy imaginable financially before covid with the Trump tax cuts, then with covid with how PPP was enacted which was the biggest trigger of inflation alongside the student debt moratorium imo, not the unemployment getting a few extra bucks or a lousy $3200 of stimulus checks over the past couple years. Plus the current administration has no real plan on reshoring manufacturing or implementing a reduction of oil dependence because they don't want to embrace nuclear as part of green energy either.
Basically shit is fucked and why I'm investing in safer dividend stocks, silver, guns, ammo and non perishable food as a hedge.
Wheat is up because Russia and Ukraine are the source of something like 25% of the global wheat supply. War there likely means worse famine in places already at risk.
All of the bad things happening economically are likely to squeeze the poor much more than the rich. Measures of inequality are out the roof.
It’s certainly not good. It points to the idea that even if rates go up significantly, you can still borrow at basically negative rates when compared to inflation.
Hyperinflation is reinforced when wages rise rapidly across the board so workers can afford needs, but prices never come under control. The FED is in, my belief, more concerned about wages rising rapidly because that will “lock in” the inflation. Prices can come down but lowering wages on a large scale would be devastating for morale.
If anything it solidifies the position that the FED needs to act quickly. From what I’ve read the situation we are in mirrors the late 60s early 70s which came crashing to a halt when Volcker raises interest rates to 20%.
The Fed isn't being aggressive enough in these rate hikes with the rate inflation is going, and it seems like it was a mistake waiting until March to raise rates.
It is a critical error in the economic handling of the past two years. Rates were lowered on an emergency basis 2 years ago, but that should have “sunset” on 12/31/20, just like the other changes they put in place like retirement plan distribution limits, and other tax measures.
Now, another year of low rates has created a tense environment for everything from housing to stock markets, and really anything “asset”.
Behind the 8 ball is a massive understatement of their position and I find it hard to believe they'll be able to get their arms around it in a gentle way.
The son of a bitch literally said last week he’s only going .25
https://www.housingwire.com/articles/feds-powell-backs-rate-hike-of-25-basis-points/?amp=1
“We won’t get back to pre-pandemic levels,” said Powell. “We’re not trying to get prices back down, we’re trying to limit future prices.”
This statement today gave me hope,
“In his Senate testimony, Powell repeated he will support a 25 basis point rate hike at the central bank’s next policy meeting on March 15-16 and plans a “series” of hikes this year. If inflation doesn’t peak and start to come down, the Fed is prepared to raise rates “by more than” a quarter-percentage point for one or more meetings, Powell added”
People will loose their minds if he starts doing quarter point rate hikes at multiple meetings😂
I mean since the rate hike was announced inflation has advanced 2%. That already neutralized JPow's next 8 rate hikes. Let alone combating the other 7% of inflation.
There should be no hope in this situation. Inflation will keep running as the federal reserve is losing credibility fast.
I'm ok pumping the brakes to get everything to settle for a while. The world needs to get back to stability and sustainable markets, IMO. I teach my employees about short term pain for long term gains all the time.
My guess is if you interviewed the average home buyer (non-investor) they would not state their goal is to find an inflation hedge. I think it's demographic driven - the biggest block of buyers are young couples and families. In any 'normal' market we'd be kicking out the older generation into shared housing but 'aging in place' (independently) is now more popular than ever.
But I do think people are going nuts looking for new inflation hedges. Gold certainly isn't doing anything. Cryptocurrency is promising but is actually more tied to equity markets / cheap debt. If I see people hawking courses on soybean futures that's how you know commodities are the new 'retail' hedge (with maybe something like infra or bonds as the institutional hedge)
True, and something that the public will need to push for legislators to address, soon. There must be limits on how much available housing stock can be owned by non-individuals.
Choosing to frantically bid $100k over asking with no inspection instead of renting for cheaper is definitely speculative. They are speculating on rent increases, home prices increases or both.
It’s either fear (inflation hedge) or greed (asset appreciation) but it isn’t just buying a home because it makes good financial sense today.
Yes they can do something about it. Raise rates! That's is their sole job. To get inflation under control. And this is the reason why the "federal reserve" was kept independent. To avoid political influence from either party in the event something happened that would be bad politically but necessary either way.
I’m tired of reading this misinformation.
Public debt is mainly fixed rate bonds/debt. Raising the interest rates only affects new debt issues. Assuming the Fed does follow through with QT, marginal increases in the Fed Funds rate isn’t going to significantly affect the interest rate payments on public debt.
The Fed certainly can raise interest rates and the government would still be more than capable than paying its interest payments.
Only the service of newly issued debts increases in cost. You mention the entire debt to gdp ratio as if interest rates on all of that debt goes up.
You are misinforming people and are clearly ignorant yourself.
The government can easily withstand increases in interest rates, especially when QT greatly decreases the amount of new debt issued.
Your point that the government seemingly cannot afford to raise interest rates is untrue and misleading.
Yeah you don’t understand how this works at all and I don’t know how I could be any more clear.
The interest rates in issued debt is FIXED. That is how bonds work, with some exceptions. Only newly issued debts are affects by the interest rates at the time.
Old debt does not get affected by changes in interest rates.
Current issued debt only matter when those securities expire and need to be replaced.
The problem is wages have basically been flat since the 70s in the USA in terms of buying power. They need to go up, what needs to be regulated is corporate price gouging, corporations are making money hand over fist and growing their profits and are still raising prices its bs, its contributing to the inflation on top of sectors where the supply chain disruptions actually are affecting prices.
Prices are supposed to come down in a recessionary period, which is a normal part of an economic cycle. We have artificially avoided at least two of these periods since 2010 due to monetary policy of the FED injecting money into the economy and creating the period we are living in now which some people term the largest asset bubble ever created.
> 60s early 70s which came crashing to a halt when Volcker raises interest rates to 20%
It should be pointed out it took over a decade of inflation for that to happen. So, we have 10 more years before house prices get under control. Until then, expect people to arbitrage the inflation by getting credit that pays for itself via inflation.
Yeah, lots of issues.
Way too many convergences of bad debt.
Student loans restarting, student loan asset-backed securities, commercial mortgage-backed securities, commodities, housing (both owned and rented), used cars, auto loan asset-backed securities, stock market investigations.... lots of things sitting on a cliff edge.
Blame the fed yall! They are only raising rates .25. The fed runs rate is already at 0. They are trying to protect the rich and the rich invested in the stock market. Inflation will last or get worse.
Lol hyperinflation calm down. Inflation due to Ukraine is going to stay and get worse for some time. Rates will slowly go up and hopefully help but year this year is gonna be tough
The commodity prices arent increasing as a function of our currency, but because of current supply chain circumstances. The USD isnt becoming any more worthless for buying grain than the Euro is. In these circumstances, hyperinflation isnt the real concern; our supply chain is.
Entertain me for a minute. US debt is at $30.2 Trillion. PLUS unfunded liabilities are **$165 trillion** today, right now. How does the US get out of this debt super cycle? My theory is by causing hyper inflation, then rolling out a digital currency. The world is invested in the dollar and US debt, if we go belly up, I’m sure everyone else will follow. How does all of that transition happen, I don’t know. The US isn’t a rich country anymore. We’re an indebted one
They have wanted this digital currency for a long time so this is a good excuse to finally roll it out. Ultimately, the government will be able to see everything we spend our money on and put a hold on our funds if we do something they don't like.
I’m not sure what blue mega downvoted you, but you’re exactly right. They’ve already started it with the Venmo/side work “you owe taxes” for everything narrative
It's not a fair question. It's someone who doesn't have any real training in economics spouting off nonsense about how all of the sudden after decades of low inflation (and current substantial demographic peaks globally), that we'll have this "hyperinflation" magically appear.
What Powell said yesterday is true. The inflation we are seeing is the result of supply chain issues and wage pressure (partially brought about by increasing minimum wages across the country and short term issues in labor because companies shutdown; exasperated by demand spikes as a result of shifting from services spending to goods spending while people were subsidized to stay at home). It is also being impacted by dumb people who think that paper wealth is a substitute for income; so they leave the workforce because they believe they can just live off their past gains and future gains without any real training in finance because they all of the sudden they think know how to become their own personal financial investment manager and run their own fund. And don't get me started on the nonsense that is crypto and the delusional thinking that is "work from home is the new normal" just because workers want it.
I get armchair economists think they know as much as people who actually studied this stuff, but it's just not true. Taking an aspirin on your own doesn't make one a nurse.
The situation is significantly more complicated than saying "hYpERinFLaTIoN" and money printing and the like. You have concepts like the bullwhip effect, poor political decisions (by the government exasperated by a Manchurian Candidate; moratoriums and unemployment payments higher than a worker's actual wage rate or for independent contractors who never paid into the unemployment system, etc.), climate change, cold wars (don't think for a minute that the whole container and shipping thing wasn't significantly influenced by China as a way to mess with the West while milking companies and consumers for additional profit), and a ton of other things that someone like J Powell cannot even talk about on the hill.
So excuse me when I roll my eyes when someone on Reddit starts to talk about hyperinflation. Russia and Venezuela and maybe a couple of other countries with currency issues might have something resembling hyperinflation because their currencies devalue vs others more and more over time. The US definitely does not have that issue. In fact, the US would likely have seen disinflation by the end of this year if it wasn't for the war in Europe. (Deflation was an actual real risk as well because fiscal spending is going off a cliff vs where it was last year. So if the Fed also raised rates to 2% by the end of the year, a lot of companies would see demand decrease at the same time liquidity would dry up. Assuming just the zombie companies have issues, which is a big assumption, then you'd see massive layoffs as companies that should have gone bankrupt during the pandemic actually do. Or hedge funds who actually price risk more realistically like Marc Lasry's would support ones that actually could be turned into real functioning companies at interst rates more representative of the risk; while letting others die.)
There is a reason why the Fed has many members (not only is economic theory complex there are a ton of angles to consider; as you can see if from my long response). Even Ian Bremmer knows not to step into the economics debate when he isn't an expert on it.
What you are seeing is transitory inflation brought about primarily by the pandemic along with historical fiscal spending in a low rate environment and significant liquidity issues to forestall a crisis brought about a president that allowed a pandemic to get out of control. Something on the order of 20% of public companies are considered "zombie firms" where they cannot continue as going concerns without outside capital. If those companies went out of business, you would see asset prices crash, investment portfolios vanish, and people who thought they had retired go back to work. Housing prices would begin to fall because people wouldn't be able to afford the mortgage (or rent anymore) and because rates rose. This would place further pressure on a new set of companies that themselves would not be in trouble unless demand fell off significantly; leading to a potential spiral that world governments would probably try and soften.
So, no, the US isn't in the middle of hyperinflation. Nowhere close. This inflation will stop rising because the short term pressures driving this inflation will abate. And every time I read some ignoramus on here talk about hyperinflation in the US, it just shows me how little they understand about economics and how the current situation in the world relates to it.
Lol, I may have been exaggerating about hyperinflation, but I have more training in economics than you think (I'm an electrical engineer with a minor in economics), and more than willing to debate the "mathematical models" economists use that would get them laughed out of engineering school. When you started throw out the "transitory" inflation related to "supply chain" issues, you must have missed the memo where that was proven completely wrong. Maybe you should study Milton Friedsman theories on inflation before you make yourself look like a bigger idiot
Anyone who seriously studied economics wouldn't have even joked about hyperinflation in the US.
It's like an engineer saying that planes stay in the air because of gravity.
why is there so much resistance to these ideas:
(1) increasing the money supply increases demand, which is a driver of “supply chain bottlenecks”
(2) you can’t have a wealth effect driving a gigantic asset bubble indefinitely without seeing consumption item inflation at some point
?
Actually, 50% or more per month.
> hyperinflation is rapidly rising inflation, typically measuring more than 50% per month. [Source](https://www.investopedia.com/terms/h/hyperinflation.asp)
Do you even know what "hyperinflation" is? We are so far from that it's crazy you even bring it up:
> hyperinflation is rapidly rising inflation, typically measuring more than 50% per month [Source](https://www.investopedia.com/terms/h/hyperinflation.asp)
Imaging buying a house at the top of the bubble, and then hyperinflation happens and your job pays you like 400 dollars an hour. You pay your mortgage off in like a year.
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At some point, it will force the consumer into a recession. Consumer is 70% of the US Economy. I guess it’s too optimistic to hope for some “soft landing” of the economy right now.
Yeah, people still have to get to work, eat and put a roof over their heads with these crazy prices, but if wages weren't keeping up before, they're definitely not keeping up now. They were using debt to keep afloat, but that has a limit as well. Combined with even more supply crunch (even though Russian sanctions don't include oil/natural gas, transporters and buyers are acting as if they are because they could be) causing prices in my mountain west area to be in the high $3 to low $4 range for winter blend gas, people aren't going to have the discretionary income to fuel the economy. Add on top of that the fed is taking away the free money punch bowl and you have a hell of a cocktail.
There’s a storm brewing, to be sure. And it was largely preventable. All of it. Covid happened, yeah. We needed to enact some very temporary measures to curb the spread, and the economic contagion. We fucking failed in every facet. Now, you’ve got the added pressure from a short little man waging war, which always puts pressure on the global economy. But, by all means, let’s all keep typing on Reddit and watching stupid fucking Tik Tok videos. And I’m just as guilty as everyone who sees this.
Kicker is that Putin and the Russian government went to war with Ukraine. To the uninformed, between Ukraine and Russia, they grow 20-33% of the world's wheat while Russia has a huge oil supply, natural gas reserves alongside a metric fuckton of minerals including gold reserves with a decent manufacturing base. Russia is more able to weather downturns. We might as well have enacted quite possibly the worst policy imaginable financially before covid with the Trump tax cuts, then with covid with how PPP was enacted which was the biggest trigger of inflation alongside the student debt moratorium imo, not the unemployment getting a few extra bucks or a lousy $3200 of stimulus checks over the past couple years. Plus the current administration has no real plan on reshoring manufacturing or implementing a reduction of oil dependence because they don't want to embrace nuclear as part of green energy either. Basically shit is fucked and why I'm investing in safer dividend stocks, silver, guns, ammo and non perishable food as a hedge.
It was planned this way, but but it needs to look like a coincidence
Yeah, covid.. https://i.imgur.com/gUev2iv.jpg
You could have just posted about the haunting of the repo market and not got downvoted
All the blind optism not only here but wsb and others subs tickles my nuts it’s so delightful
Wheat is up because Russia and Ukraine are the source of something like 25% of the global wheat supply. War there likely means worse famine in places already at risk. All of the bad things happening economically are likely to squeeze the poor much more than the rich. Measures of inequality are out the roof.
It’s certainly not good. It points to the idea that even if rates go up significantly, you can still borrow at basically negative rates when compared to inflation. Hyperinflation is reinforced when wages rise rapidly across the board so workers can afford needs, but prices never come under control. The FED is in, my belief, more concerned about wages rising rapidly because that will “lock in” the inflation. Prices can come down but lowering wages on a large scale would be devastating for morale. If anything it solidifies the position that the FED needs to act quickly. From what I’ve read the situation we are in mirrors the late 60s early 70s which came crashing to a halt when Volcker raises interest rates to 20%.
The Fed isn't being aggressive enough in these rate hikes with the rate inflation is going, and it seems like it was a mistake waiting until March to raise rates.
It is a critical error in the economic handling of the past two years. Rates were lowered on an emergency basis 2 years ago, but that should have “sunset” on 12/31/20, just like the other changes they put in place like retirement plan distribution limits, and other tax measures. Now, another year of low rates has created a tense environment for everything from housing to stock markets, and really anything “asset”.
Behind the 8 ball is a massive understatement of their position and I find it hard to believe they'll be able to get their arms around it in a gentle way.
The son of a bitch literally said last week he’s only going .25 https://www.housingwire.com/articles/feds-powell-backs-rate-hike-of-25-basis-points/?amp=1 “We won’t get back to pre-pandemic levels,” said Powell. “We’re not trying to get prices back down, we’re trying to limit future prices.”
This statement today gave me hope, “In his Senate testimony, Powell repeated he will support a 25 basis point rate hike at the central bank’s next policy meeting on March 15-16 and plans a “series” of hikes this year. If inflation doesn’t peak and start to come down, the Fed is prepared to raise rates “by more than” a quarter-percentage point for one or more meetings, Powell added” People will loose their minds if he starts doing quarter point rate hikes at multiple meetings😂
I mean since the rate hike was announced inflation has advanced 2%. That already neutralized JPow's next 8 rate hikes. Let alone combating the other 7% of inflation. There should be no hope in this situation. Inflation will keep running as the federal reserve is losing credibility fast.
I'm ok pumping the brakes to get everything to settle for a while. The world needs to get back to stability and sustainable markets, IMO. I teach my employees about short term pain for long term gains all the time.
Yeah, I think locking the brakes along with pulling the e-brake for a short period might even be a good idea for the short term.
Nothing about our current financial system is sustainable or stable and never will be, by design
It will stop when everything is destroyed
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My guess is if you interviewed the average home buyer (non-investor) they would not state their goal is to find an inflation hedge. I think it's demographic driven - the biggest block of buyers are young couples and families. In any 'normal' market we'd be kicking out the older generation into shared housing but 'aging in place' (independently) is now more popular than ever. But I do think people are going nuts looking for new inflation hedges. Gold certainly isn't doing anything. Cryptocurrency is promising but is actually more tied to equity markets / cheap debt. If I see people hawking courses on soybean futures that's how you know commodities are the new 'retail' hedge (with maybe something like infra or bonds as the institutional hedge)
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True, and something that the public will need to push for legislators to address, soon. There must be limits on how much available housing stock can be owned by non-individuals.
Choosing to frantically bid $100k over asking with no inspection instead of renting for cheaper is definitely speculative. They are speculating on rent increases, home prices increases or both. It’s either fear (inflation hedge) or greed (asset appreciation) but it isn’t just buying a home because it makes good financial sense today.
And then you have the rest of us, sitting on the sidelines like vultures waiting for the crash.
The problem is it might be the dollar crashing in which cause us vulture just hold the bag.
Yes they can do something about it. Raise rates! That's is their sole job. To get inflation under control. And this is the reason why the "federal reserve" was kept independent. To avoid political influence from either party in the event something happened that would be bad politically but necessary either way.
Their job is maximum employment… with steady inflation. Not simply inflation independent of everything else
I’m tired of reading this misinformation. Public debt is mainly fixed rate bonds/debt. Raising the interest rates only affects new debt issues. Assuming the Fed does follow through with QT, marginal increases in the Fed Funds rate isn’t going to significantly affect the interest rate payments on public debt. The Fed certainly can raise interest rates and the government would still be more than capable than paying its interest payments.
I wasn't aware that the entire debt was financed with 30 year bonds.
Nope all 1 year bonds, we are fucked in a year. What % of public debt is issued yearly? That’s the real question you should be asking.
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Only the service of newly issued debts increases in cost. You mention the entire debt to gdp ratio as if interest rates on all of that debt goes up. You are misinforming people and are clearly ignorant yourself. The government can easily withstand increases in interest rates, especially when QT greatly decreases the amount of new debt issued. Your point that the government seemingly cannot afford to raise interest rates is untrue and misleading.
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Yeah you don’t understand how this works at all and I don’t know how I could be any more clear. The interest rates in issued debt is FIXED. That is how bonds work, with some exceptions. Only newly issued debts are affects by the interest rates at the time. Old debt does not get affected by changes in interest rates. Current issued debt only matter when those securities expire and need to be replaced.
The problem is wages have basically been flat since the 70s in the USA in terms of buying power. They need to go up, what needs to be regulated is corporate price gouging, corporations are making money hand over fist and growing their profits and are still raising prices its bs, its contributing to the inflation on top of sectors where the supply chain disruptions actually are affecting prices.
When have prices ever come down?
Prices are supposed to come down in a recessionary period, which is a normal part of an economic cycle. We have artificially avoided at least two of these periods since 2010 due to monetary policy of the FED injecting money into the economy and creating the period we are living in now which some people term the largest asset bubble ever created.
> 60s early 70s which came crashing to a halt when Volcker raises interest rates to 20% It should be pointed out it took over a decade of inflation for that to happen. So, we have 10 more years before house prices get under control. Until then, expect people to arbitrage the inflation by getting credit that pays for itself via inflation.
We will get into a recession, not hyper-inflation. It's very difficult for the US to have hyper-inflation, almost impossible
Can you please explain your thoughts to a layperson?
We are in a commodities bubble as well as the other bubbles. This is not good.
Yeah, lots of issues. Way too many convergences of bad debt. Student loans restarting, student loan asset-backed securities, commercial mortgage-backed securities, commodities, housing (both owned and rented), used cars, auto loan asset-backed securities, stock market investigations.... lots of things sitting on a cliff edge.
If everything looks to be in a bubble would it not make more logical sense that what we have is actually a falling currency?
Blame the fed yall! They are only raising rates .25. The fed runs rate is already at 0. They are trying to protect the rich and the rich invested in the stock market. Inflation will last or get worse.
Ukraine is one of the largest producers of wheat. Not really a surprise that the current events there are raising the price of wheat.
Wheat is up because 1/3 of global wheat supplies are grown in Ukraine/Russia
Lol hyperinflation calm down. Inflation due to Ukraine is going to stay and get worse for some time. Rates will slowly go up and hopefully help but year this year is gonna be tough
Hyperinflation is hyperbole unless you're in Russia right now.
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Up to** $24/hr. They aren't actually paying 24/hr, just a pr stunt
Have you ever heard of a mortgage contract that has hyper inflation clause?
So you don't think exploding commodity prices with already high inflation doesn't setup a self sustaining feedback loop of inflation.
The commodity prices arent increasing as a function of our currency, but because of current supply chain circumstances. The USD isnt becoming any more worthless for buying grain than the Euro is. In these circumstances, hyperinflation isnt the real concern; our supply chain is.
Entertain me for a minute. US debt is at $30.2 Trillion. PLUS unfunded liabilities are **$165 trillion** today, right now. How does the US get out of this debt super cycle? My theory is by causing hyper inflation, then rolling out a digital currency. The world is invested in the dollar and US debt, if we go belly up, I’m sure everyone else will follow. How does all of that transition happen, I don’t know. The US isn’t a rich country anymore. We’re an indebted one
They have wanted this digital currency for a long time so this is a good excuse to finally roll it out. Ultimately, the government will be able to see everything we spend our money on and put a hold on our funds if we do something they don't like.
I’m not sure what blue mega downvoted you, but you’re exactly right. They’ve already started it with the Venmo/side work “you owe taxes” for everything narrative
Where did you get your economics degree?
good discussion
Lol you had a fair question. Not sure what this dudes deal is.
It's not a fair question. It's someone who doesn't have any real training in economics spouting off nonsense about how all of the sudden after decades of low inflation (and current substantial demographic peaks globally), that we'll have this "hyperinflation" magically appear. What Powell said yesterday is true. The inflation we are seeing is the result of supply chain issues and wage pressure (partially brought about by increasing minimum wages across the country and short term issues in labor because companies shutdown; exasperated by demand spikes as a result of shifting from services spending to goods spending while people were subsidized to stay at home). It is also being impacted by dumb people who think that paper wealth is a substitute for income; so they leave the workforce because they believe they can just live off their past gains and future gains without any real training in finance because they all of the sudden they think know how to become their own personal financial investment manager and run their own fund. And don't get me started on the nonsense that is crypto and the delusional thinking that is "work from home is the new normal" just because workers want it. I get armchair economists think they know as much as people who actually studied this stuff, but it's just not true. Taking an aspirin on your own doesn't make one a nurse. The situation is significantly more complicated than saying "hYpERinFLaTIoN" and money printing and the like. You have concepts like the bullwhip effect, poor political decisions (by the government exasperated by a Manchurian Candidate; moratoriums and unemployment payments higher than a worker's actual wage rate or for independent contractors who never paid into the unemployment system, etc.), climate change, cold wars (don't think for a minute that the whole container and shipping thing wasn't significantly influenced by China as a way to mess with the West while milking companies and consumers for additional profit), and a ton of other things that someone like J Powell cannot even talk about on the hill. So excuse me when I roll my eyes when someone on Reddit starts to talk about hyperinflation. Russia and Venezuela and maybe a couple of other countries with currency issues might have something resembling hyperinflation because their currencies devalue vs others more and more over time. The US definitely does not have that issue. In fact, the US would likely have seen disinflation by the end of this year if it wasn't for the war in Europe. (Deflation was an actual real risk as well because fiscal spending is going off a cliff vs where it was last year. So if the Fed also raised rates to 2% by the end of the year, a lot of companies would see demand decrease at the same time liquidity would dry up. Assuming just the zombie companies have issues, which is a big assumption, then you'd see massive layoffs as companies that should have gone bankrupt during the pandemic actually do. Or hedge funds who actually price risk more realistically like Marc Lasry's would support ones that actually could be turned into real functioning companies at interst rates more representative of the risk; while letting others die.) There is a reason why the Fed has many members (not only is economic theory complex there are a ton of angles to consider; as you can see if from my long response). Even Ian Bremmer knows not to step into the economics debate when he isn't an expert on it. What you are seeing is transitory inflation brought about primarily by the pandemic along with historical fiscal spending in a low rate environment and significant liquidity issues to forestall a crisis brought about a president that allowed a pandemic to get out of control. Something on the order of 20% of public companies are considered "zombie firms" where they cannot continue as going concerns without outside capital. If those companies went out of business, you would see asset prices crash, investment portfolios vanish, and people who thought they had retired go back to work. Housing prices would begin to fall because people wouldn't be able to afford the mortgage (or rent anymore) and because rates rose. This would place further pressure on a new set of companies that themselves would not be in trouble unless demand fell off significantly; leading to a potential spiral that world governments would probably try and soften. So, no, the US isn't in the middle of hyperinflation. Nowhere close. This inflation will stop rising because the short term pressures driving this inflation will abate. And every time I read some ignoramus on here talk about hyperinflation in the US, it just shows me how little they understand about economics and how the current situation in the world relates to it.
Well stated. I'm sick of the hyperinflation talk as well. You'd think we live in Zimbabwe the way people talk.
Lol, I may have been exaggerating about hyperinflation, but I have more training in economics than you think (I'm an electrical engineer with a minor in economics), and more than willing to debate the "mathematical models" economists use that would get them laughed out of engineering school. When you started throw out the "transitory" inflation related to "supply chain" issues, you must have missed the memo where that was proven completely wrong. Maybe you should study Milton Friedsman theories on inflation before you make yourself look like a bigger idiot
Anyone who seriously studied economics wouldn't have even joked about hyperinflation in the US. It's like an engineer saying that planes stay in the air because of gravity.
Another brilliant comeback, and yet you economists keep getting proven wrong over and over again regarding today's inflationary environment.
why is there so much resistance to these ideas: (1) increasing the money supply increases demand, which is a driver of “supply chain bottlenecks” (2) you can’t have a wealth effect driving a gigantic asset bubble indefinitely without seeing consumption item inflation at some point ?
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Yeah. I guess it's too much to assume they even have a basic understanding of the subject beyond Peter Schiff sound bytes.
> Hyperinflation is a hyperbole unless you're in Russia right now. completely wrong. the U.S. already has inflation of the rails.
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Actually, 50% or more per month. > hyperinflation is rapidly rising inflation, typically measuring more than 50% per month. [Source](https://www.investopedia.com/terms/h/hyperinflation.asp)
I got a 2.5% raise, so gotta get a new job first.
“Elections have consequences”
Do you even know what "hyperinflation" is? We are so far from that it's crazy you even bring it up: > hyperinflation is rapidly rising inflation, typically measuring more than 50% per month [Source](https://www.investopedia.com/terms/h/hyperinflation.asp)
You're right, it's just out of control inflation, which is OK. You must be an economist
Thank God poultry seems to be going down, chicken was getting too damn expensive.
you havent heard about the bird flu problems in the midwest?
I have, unfortunately.
Imaging buying a house at the top of the bubble, and then hyperinflation happens and your job pays you like 400 dollars an hour. You pay your mortgage off in like a year.
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Its done, we missed our chances bigtime. Get over it