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by landemva 1188 days ago
> not raising short rates would increase inflation

Proxy war in eastern Europe, with USA dumping big $ there, is causing price rises.

4 comments

Inflation was surging well before the Ukraine invasion.
The virus lockdowns ended and manufacturing supply chains have been clearing. Please tell us why price increases are continuing, instead of dramatically dropping.
Because we printed trillions of dollars and haven’t come close to removing all that excess stimulus yet - nor have any supply side constraints that existed prior to Covid been removed.
I thought the corona payments ended. Computer chips and PCs are largely back in stock.

Fertilizer and fuel prices went higher in past year. This drove up food production prices. Molecule flow in pipeline to Germany was sabotaged, preventing sale of molecules from east to west which drove up natural gas prices at export ports in USA. Not a virus issue but a war issue.

> Computer chips and PCs are largely back in stock.

Not sure if car manufacturers, the Raspberry Pi foundation, and many others would agree with that assessment. Energy prices in Europe have started coming down again as well.

And Corona payments may have ended, but the money is still sloshing around in the system.

Right, the specialized chips are still catching up. And Dell forecasts a 20% revenue drop this quarter.

https://www.electropages.com/blog/2023/02/semiconductor-over...

I had read that rpi started selling bulk to companies which is leaving little supply for consumers. Maybe upstarts like Orange Pi will step in to fill the void for consumers.

http://www.orangepi.org/html/hardWare/computerAndMicrocontro...

>> payments may have ended, but the money is still sloshing around in the system.

How would existing money cause additional inflation? It would flat-line, not increase.

Why wouldn't you expect price increases to continue?
How does that domestic impact service sector wages
Large debt issuance to fund federal government deficit spending causes dollar to devalue. This affects price of labor paid in dollars.
Russian troll.
"Proxy war" ? Asserting that Russia only invaded Ukraine at the behest of another country (China?) is a pretty strong claim.