Reply to U.S. Annual Inflation rose to 6.8% in November

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Reply to "U.S. Annual Inflation rose to 6.8% in November - the highest in 40 years"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Come on, people, this is Econ 101. We are coming out of an economic shutdown. Prices are higher than a year ago because a year ago everything was terrible. Suppliers, shippers, producers, employers, and employees are all going through transitions and replacement cycles that would have happened gradually but were stopped for a year and are now accelerated by the rapid recovery. Give them a few months to figure things out. Demand exceeding the supply capability is a great problem to have. The first reaction is higher prices, but the long-term response is increased production and improvements in supply chain productivity and efficiency. [/quote]

You're right it is Econ 101 - yet again, another govt made problem by being too lax with fiscal spending and monetary policy. That's what happens when you keep handing out stimmi checks, govt hand out after govt hand out, and keep printing money.  The USG inflated the money supply by 25% in about 1-1.5 years.

It is a diabetic sugar rush.  It is only a matter of time before the crash occurs. [/quote]

It’s not about those checks. They account for a tiny part of the economy. Do the math. We have a much much faster recovery than after a regular recessions because we didn’t go through a full blown recession. Most people didn’t stop working and making money during the pandemic, they just cut way back on spending because they were working from home and not doing much else. A lot of boomers especially are sitting on piles of money and are spending some of it. We are at the beginning of an economic boom. [/quote]

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