You’ve said QE is the cause, but provide no evidence to back up these claims. Considering QE occurred multiple times after the 08 crisis, what makes this time different? Bold claims without much substance.
Perhaps I struggle to articulate this clearly because it seems so obvious.
If there are 3 potential logical causes being discussed (QE, reduction in supply of commodities due to covid, and reduction in supply of fossil fuels from Russia since the invasion of Ukraine), and I provide data that suggests that 2 of them could not be significantly responsible, that leaves only one.
The difference is the magnitude. Never before in US history has the government expanded the M2 money supply by ~20% in a matter of a few weeks. This is the chart that sums it up [0]. That was significantly by direct cash injection/expansion of the Fed's balance sheet. Combined with ultra low interest rates (also the most significant in US history) and the elimination of the reserve requirement, M2 has been growing at an incredible rate ever since. When you have 1 gold bar worth of value in an economy and 100 dollars, a gold bar is worth $100. If you print 20 more dollars, well, that gold bar will soon be worth $120, and not because the inherent value or usefulness of the gold bar changed.
If there are 3 potential logical causes being discussed (QE, reduction in supply of commodities due to covid, and reduction in supply of fossil fuels from Russia since the invasion of Ukraine), and I provide data that suggests that 2 of them could not be significantly responsible, that leaves only one.
The difference is the magnitude. Never before in US history has the government expanded the M2 money supply by ~20% in a matter of a few weeks. This is the chart that sums it up [0]. That was significantly by direct cash injection/expansion of the Fed's balance sheet. Combined with ultra low interest rates (also the most significant in US history) and the elimination of the reserve requirement, M2 has been growing at an incredible rate ever since. When you have 1 gold bar worth of value in an economy and 100 dollars, a gold bar is worth $100. If you print 20 more dollars, well, that gold bar will soon be worth $120, and not because the inherent value or usefulness of the gold bar changed.
[0] https://fred.stlouisfed.org/series/WM2NS