[JavaBatman]

> In other words, governments with fiat currencies — including the United States — have the power to expand the quantity of those currencies. If they choose to do so, they risk inflating the prices of necessities like food, gas, and housing.

> In recent months, consumers have experienced higher price inflation than they have seen in decades. A major reason for the increases is that central bankers around the world — including those at the Federal Reserve — sought to compensate for Covid-19 lockdowns with dramatic monetary inflation. As a result, nearly $4 trillion in newly printed dollars, euros, and yen found their way from central banks into the coffers of global financial institutions.

This automatically assumes that the inflationary issues we are facing come from demand. However, it is very clearly a supply issue. Namely, the closure of plants and factories due to labor shortages, lockdowns, and geopolitical issues. When you reduce the supply of goods and services while demand is left the same, you get higher prices. Furthermore, OPEC isn't producing more, which increases oil prices and the prices of all other industries. The chip shortage, which is fundamentally a supply shortage, is also increasing the prices of all other goods and services that rely on chips.

This is not an issue of demand. It's similar to the 1970s: supply shocks that led to an increase in the price level.

[night862]

Word on the street is fed "printing money" = "inflation like Venezuela." I've had these conversations dozens of times this year. I'm not extra smart, but somehow almost everybody misses your point about demand.

There is also the matter of where the money the fed "prints" ends up. Its not handing out singles, they're using other instruments like buying paper. I'm not educated enough to recount exactly what the mechanisms are.

If you allow me to contrive that essentially the fed is buying stock dips for example, the funds they are creating to do so doesn't end up as you mentioned buying loafs of bread and driving up demand, it ends up in the dragon's horde of large corporations and the beneficiaries of the windfall.

So the ultra-wealthy, corporations, large institutional funds (Stanford?) and/or corporate stakeholders see their paper balances of stocks increase, and along with the fabulous credit that having lots of assets brings you, they are free to leverage these assets to consolidate other assets such as real estate, stocks (and buybacks), maybe (but probably not given the yeilds) bonds and maybe a yacht or three.

Corporations, institutions, and ultra-wealthy wouldn't suddenly be able to afford to pay off their credit cards or buy extra calculators or yogurt, that is covered nicely in the first 100k/yr.

The rest is fiefdoms and trust funds for generational transmission. Probably lobbyists too.

Gotta add about 401k/retirement plans: That money is more or less a stipend for end-of-life, how much could that really balance the scale given the facts about the business cycle?

[mohanmcgeek]

> Its not handing out singles, they're using other instruments like buying paper

Infact they're only buying paper.

The handouts are from the federal/state governments. The reserve has to buy the paper for the government to give out these handouts.

[night862]

Yeah the states and local municipalities don't have the fed for handouts (whatever you mean by that exactly, I am assuming it is the unemployment benefits) State/local has to balance their budgets for the most part aside from federal redistribution to "poor" states with less tax revenue.

[mohanmcgeek]

I'm not sure if state/local governments really need to balance their budgets. They can borrow just like the federal government can.

> the states and local municipalities don't have the fed

The federal government too doesn't "have" the fed. The federal reserve is a bank and it's independent of the government.

[missinfo]

I think it's both a supply and demand issue. A much greater supply of dollars = more buying power, plus people working from home increased demand of certain items like lumber and computer chips. On top of shortages of everything for the reasons you describe.

That will get worked out, but here's why it looks to me inflation is here to stay:

1. Wages are going up in order to solve labor shortages. Higher wages = higher cost of goods = higher prices. And wages are sticky. Workers now getting paid $25/hr probably aren't going back to $15.

2. The just in time supply chain is being re-evaluated. We need resiliency, but it's less efficient and more expensive. Higher COGS.

3. The Fed seems likely to keep increasing the supply of dollars and don't want to raise interest rates much.

[wsjtho55]

And supply shocks have more to do with JIT logistics than government interference

Blockchain, like a lot of computing ideas, is far too academic requiring constant fetishizing, or it’ll disappear.

May as well trot out a new religion; blockchain will be as unprovable and ephemeral to the masses.

Which is great for the hopes and dreams of blockchain grifters, and “egalitarian” tech oligarchs.

They have proven one thing though; the public will chase ephemeral carrot off a cliff.