> The long answer is that today's inflation doesn't seem to be monetary in cause, because nearly every country is experiencing inflation simultaneously.
While this is true, the size of direct fiscal in the US i.e. stimmie checks was enormous. I think the original poster is correct, I encourage anybody in this thread to look into what happened with used cars. At times that accounted for as much as 1.5% of the month on month inflation figures.
A globalised supply chain was disrupted by covid and that exposed some pretty gnarly non-linearities in how pricing happens. Combined with an explosion in shipping prices that actually pre-cluded low inflation areas from exporting their disinflation to high inflation e.g. I've linked elsewhere charts on shipping costs. Have a look at a USDJPY chart and wonder why the US wasn't loading up on cheap Japanese goods..
Correct - once the world saw the Fed dumping $1 trillion into the money supply to prevent a collapse due to Covid in 2020, everybody else did as well. It takes time for that to make its way through the pricing system (bearing in mind inflation is measured over the last 12 months, its a lagging indicator).
There are also demand factors as well, but most of what we are seeing is monetary in origin, raising interest rate is also somewhat "demand" driven, in that the big trigger there was the market for buying MBS (packages of loans mostly made by banks and S&L) market froze and then spiked up significantly.
A globalised supply chain was disrupted by covid and that exposed some pretty gnarly non-linearities in how pricing happens. Combined with an explosion in shipping prices that actually pre-cluded low inflation areas from exporting their disinflation to high inflation e.g. I've linked elsewhere charts on shipping costs. Have a look at a USDJPY chart and wonder why the US wasn't loading up on cheap Japanese goods..