Reply to Inflation: explain it to me like I'm 5

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[quote=Anonymous]Read the Wikipedia entry on inflation in Argentina.  It explains the phenomenon well.  It is a monetary phenomenon and it's global. 
 In the U.S. 20% of all dollars in existence were printed since the start of Covid and then pushed into the economy through the banks to drive up asset prices.  Combined with the zero interest rate policy it worked - too well.  The Fed and Treasury were complacent because despite rampant money printing since the financial crisis and artificially suppressed interest rates, and lots of tax cuts, inflation had remained low.  But the massive stimulus during Covid - along with all the moratoria - was too much.  Inflation became rampant throughout the world as all the central banks followed a similar path.  It will only settle down once that massive increase in money is withdrawn, which the various central banks (except Japan) are in the process of doing.  But they don't want to crash the global economy, so it's a slow process.  If we're really lucky it will work and eventually inflation will return to the 1 to 3 percent range.  But based on past experiences - the 40s and 70s - for example, it will take time and there will be more spikes.[/quote]

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