Yet you aren't on the barricades, are you? Is anybody else? — ssu
And with a 5% inflation, just look how quickly your money will lose value. Let's say that for the next five years you would have 5% inflation (which could be masqueraded by statistical gimmicks to look like 3% or 2%). Afterwards it won't take so much time to get where the money is half of it used to be. But who cares what things were priced a decade ago.
Only if it would be 5% per month people would panic and it would be an uproar. The idea is just to boil the frog so low that it doesn't jump out, you know.
Probably a direct result of growing up so poor... much easier to satisfy! — creativesoul
That big retailers exploit their financial control over suppliers to hobble smaller competitors is a different phenomenon. — ssu
As I've said, prices can go up and down for many reasons that aren't related to inflation. And you can allways find new reasons to argue just why prices are up. — ssu
I'm actually not so sure about that, unfortunately.Eventually, if inflation gets bad enough and the fed is seen as protecting bankers more than Main Street, a political party will run on a platform of revoking the fed's independence. — RogueAI
Companies that have the ability to put the highers costs into prices and protect their margins are actually quite good investments in this environment. — ssu
But are they really the sources, the main culprit, for inflation? — ssu
For example real estate doesn't have this ability — ssu
No they aren’t. They protect the profits, yes, which goes to shareholders. The consumers and workers get screwed, as always. It’s a terrible investment. — Mikie
Let me get this straight:It’s a major contributor and, often, the main culprit, yes. In the case of food, it’s the main culprit. In the case of cars…It’s partly that but partly supply disruptions. Etc. — Mikie
It's really about just who can put this inflation into motion.... — ssu
Why would they be a terrible investment? — ssu
Why would they be a terrible investment? — ssu
It's really about just who can put this inflation into motion.... — ssu
So your refutation is that once there was peak of deflation during the financial crisis? Weak.I find it odd that you keep blaming inflation on the government printing more money, while offering a graph that clearly disputes that...
Look at 2009... — creativesoul
Stock companies try to make a profit for their owners. It's not a terrible investment, if they achieve doing that.Because raising prices, which customers pay for, just to maintain profits, and then giving away 90% of those profits to shareholders is a terrible investment. It’s terrible for workers, customers, society, and, as has been studied, for businesses themselves. — Mikie
Stock buybacks etc. are another thing. Basically if the company makes a profit, then it's a healthy company.To even call it an investment is misleading. It’s not investing anything, really. It’s trying to keep the profits and stock prices high. — Mikie
So trade unions too when they achieve a pay raise?Whomever wants to increase profit margin and can get away with raising prices. — creativesoul
Most important asset being the US dollar. Yet I'd add that it's not just the Fed, it's all the central banks and financial institutions that have to be considered too.The Fed printing money does inflate certain assets, yes. That’s only one part of overall inflation. — Mikie
Stock companies try to make a profit for their owners. It's not a terrible investment, if they achieve doing that. — ssu
Basically if the company makes a profit, then it's a healthy company. — ssu
So your refutation is that once there was peak of deflation during the financial crisis? Weak. — ssu
Terrible practice to make a profit? Terrible for business?. And it’s a terrible practice. Terrible for businesses, in fact. To say nothing of the moral bankruptcy of the shareholder primacy view, which you seem to assume as a law of nature. — Mikie
What is the strawman where you do have inflation every year except one?It's never a good sign when one supplants valid objection with attacking a strawman. — creativesoul
Terrible practice to make a profit? Terrible for business? — ssu
Obviously you don't like capitalism, but the fact is profit is given to those that are the owners. Workers get salaries, owners profits.. Giving those profits to the rich is morally wrong and terrible practice. — Mikie
And thus I keep repeating on the absolutely massive Trump era COVID stimulus packages in addition to the out of control spending that the US has. — ssu
All nations are following the same example. And that's why a dollar crisis wouldn't be a crisis of the US, it would be a crisis for the West. We are in the same boat. And that's why the saying has gone that in the end the US is the best of the bad. I'd say the end result is monetary crisis of the whole system. Just like Nixon had in the 1970's.I think you're forgetting that the US is part of a global system. The US can overspend without developing hyper-inflation as long as China doesn't have high inflation. The problem right now is that everybody's inflation is on the high side. Even Japan's inflation rate is going up (which usually never happens). — frank
It would be good actually to see what economists and commentators said earlier. Reasons like why there wouldn't be any inflation because of the COVID stimulus packages and the huge increase in spending. There was even the Modern Monetary Theory (MMT) that was eagerly listened to. Even if the MMT did understand that somewhere inflation would be a problem, it wouldn't be now. Especially not for the US.Right now we're in a self-propelling cycle. Wages are up because spending is up, and vice versa. Even though there are signs that we may already be in a recession, inflation continues along it's own trail. — frank
(Washington Post, March 4th, 2021) This time, the proximate cause is the Biden administration’s $1.9 trillion coronavirus rescue package, coupled with the Fed’s new approach, which aims to let inflation hover near 2 percent (and go slightly above it when necessary), instead of strictly targeting 2 percent. What happens, the inflation hawks ask, if we emerge from the pandemic with an economic boom? If everyone gets back to work and uses that government money, will wages and prices suddenly shoot up? It’s not an outrageous question: Theory holds that goods will cost more and our money will buy less. But that’s not happening yet. And it hasn’t happened in a very long time. Our understanding of inflation has changed, our ability to control it has improved and the danger is more remote than we once believed. *** From a human standpoint, it seems like a no-brainer. Stop overly worrying about unlikely inflation and support a roaring economy, one that’s inclusive enough to pull people off the sidelines. It’s essential medicine. If only the hawks can be convinced to let us take it.
All nations are following the same example. And that's why a dollar crisis wouldn't be a crisis of the US, it would be a crisis for the West. — ssu
It would be good actually to see what economists and commentators said earlier. Reasons like why there wouldn't be any inflation because of the COVID stimulus packages and the huge increase in spending. There was even the Modern Monetary Theory (MMT) that was eagerly listened to. Even if the MMT did understand that somewhere inflation would be a problem, it wouldn't be now. Especially not for the US. — ssu
Especially after the sanctions now imposed on Russia, China can fear that similar things would happen to itself. And thus the globalization bromance between China and the US is over and globalization is now going backwards. China is also focused on trying to increase it's domestic market and doesn't see anymore the link to the US or the West's technology and investment as crucial as earlier.China isn't in the west. China doesn't follow western policies. — frank
But for more than 15 years—spanning the Bush, Obama, and Trump administrations—China has followed a strategy of reducing its dependence on foreign technology and capabilities. Moreover, it has projected that strategy forward another 15 years.
When the global economy crashed in March 2020 and markets went into free fall, the U.S. Treasury market — the $25 trillion bedrock of the global financial system — broke down. Sellers struggled to find buyers, and prices whipsawed higher and lower. The Fed stepped in, devoting trillions of dollars to steadying the market.
The importance of the Treasury market is hard to overstate. It is the main source of funding for the U.S. government and underpins borrowing costs around the globe, for a huge variety of assets. If you have a mortgage, the interest rate you received was probably priced in relation to Treasuries. The same goes for credit cards, business loans and just about anything with an interest rate attached to it. The proper functioning of this market is paramount.
That’s why even small wobbles in this market can generate huge worries. At its worst, a Treasury trading breakdown could cause the value of the dollar, stocks and other bonds to tumble.
What Chinese policies then you had in mind?I dont think much of what you wrote there is directly related to the present situation. — frank
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