Reply to Can someone explain to me why we have such high inflation now?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Amazing how Americans don't understand basic econ. You thought all those stimmi checks, PPP loans, and other free give aways had no consequences?  The US gov have away multiple trillion dollar+ stimuli.  The Fed juiced the economy with zero percent interest rates, doubled the supply of money in only 2 years, and expanded the balance sheet to $9 trillion dollars (it was only $800B around 2008).  When you have that much cash and credit liquidity in the system you get persistent inflation.  How in the hell do American consumers STILL have a voracious appetite for vacations, cars, electronics, dining out, etc. even though prices are skyrocketing?  It's because people have too much money. The stamina for price hikes that Americans have is absurd.  It means inflation is sticky and very difficult to dislodge.

The latest CPI report tanked the markets. It was very bad.  It clearly shows inflation is being driven by excessive demand as well as an overly tight labor market and not so much due to supply constraints.  Yes, the labor market is too hot. Unemployment also needs to go back up to reduce the strangle the labor market has on inflation.

The fed is now raising interest rates and quantitative tightening to remove money and liquidity from the economy.  Costs to borrow are skyrocketing. It will bring down asset values, remove.miney from the system, and hopefully cause unemployment to go up. The net result will hopefully be taming of this terrible inflation.[/quote]

Amen.  Can’t believe how many people thought the stimulus money would have little effect.  So dumb. [/quote]

If the stimulus was the sole cause of inflation then you wouldn’t be seeing high inflation worldwide. All the central banks across the globe are dealing with the same issue, which points to the supply chain woes being the primary drivers of inflation and not a particular fiscal policy. But economic data is squishy enough that all the Biden haters can manipulate it to suit their midterm agenda.[/quote]

You keep carping about supply chains, but the latest CPI report blows up that narrative. Supply chains have eased.  The report shows that inflation is increasingly being driven by the cosnimer and is demand driven.  Trillions of dollars in expansionary monetary and fiscal policy have consequences.

Stop posting partisan hack.  Read the damn CPI report.  Why do you think the markets lost $1.6T in a single day when it came out? Because everyone on the street can read it and see that inflation is becoming entrenched and is being driven my demand. It means the Fed's job is a.lot harder now and they'll bring the hammer.

Read the news for crying out loud:

https://abcnews.go.com/US/wireStory/driven-consumers-us-inflation-grows-persistent-89863444

[quote][b]Driven by consumers[/b], US inflation grows more persistent

Some of the longtime drivers of higher inflation — spiking gas prices, supply chain snarls, soaring used-car prices — are fading. Yet underlying measures of inflation are actually worsening.[/quote]

The other poster had it right - inflation is multifaceted, from supply chains to too much stimulus and govt spending/expansion. Writing off trillions in spending and monetary/fiscal policy as having zero effect is not based in reality at all.

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