Maybe this is better in its own thread, inflation is here and it's rising fast.

I have seen some crazy takes in the media lately, including that inflation only hurts the rich 1% and helps everyone else

This is actually nonsense, inflation only helps those who have debt and only IF inflations causes wages to rise at a faster rate than inflation and interest rates lag.

The super wealthy aren't hurt by inflation as their assets rise in value and higher interest rates give them a better return on their money.
The worker on the other hand might not understand that 5% inflation is a 5% pay cut.

I mean, is there anything we can do but bite the pillow?

Most of the US is heavily in debt. Average American has 52,940 in debt. We are in good shape here I guess.  Let the inflation come!!!

Nov 12, 2021 22:03:26 GMT @ness said:

I mean, is there anything we can do but bite the pillow?

Sure, kill medicaid, medicare and social security.  This is what the GOP is gunning for.  

Then again the GOP right now is trying the Trump strat of charging things then just never paying your debts.  

Nov 12, 2021 22:10:47 GMT c said:

Nov 12, 2021 22:03:26 GMT @ness said:

I mean, is there anything we can do but bite the pillow?

Sure, kill medicaid, medicare and social security.  This is what the GOP is gunning for.

Kills abortion

Complains when people need medicaid to support the unwanted fetus

GOP

Better support that fetus too as if it dies before birth from malnutrition in some states it now murder.  After it is born they do not care about it though and it can go fuck itself.

I just don't see how paying more food, gas, and other everday items is a good thing for working people.

Nov 12, 2021 22:06:58 GMT c said:

Most of the US is heavily in debt. Average American has 52,940 in debt. We are in good shape here I guess.  Let the inflation come!!!

You realise that with inflation comes higher interest rates?
The only way you're okay is if you're asset values rise faster than the interest rates.
Even if they do, your 400k house being worth 500k now, doesn't actually help you make higher repayments.

Nov 12, 2021 22:24:57 GMT thereallt said:

I just don't see how paying more food, gas, and other everday items is a good thing for working people.

Maybe because it's not.

Nov 12, 2021 22:03:26 GMT @ness said:

I mean, is there anything we can do but bite the pillow?

Yes, choose to not be a drone.

Nov 12, 2021 22:25:09 GMT iNCY said:

Nov 12, 2021 22:06:58 GMT c said:

Most of the US is heavily in debt. Average American has 52,940 in debt. We are in good shape here I guess.  Let the inflation come!!!

You realise that with inflation comes higher interest rates?
The only way you're okay is if you're asset values rise faster than the interest rates.
Even if they do, your 400k house being worth 500k now, doesn't actually help you make higher repayments.

Apparently not in the US it does not <.<

Interest rates are 0 for at least two more years.

Best job market for workers in the US in more than 60 years.  Right now 10 million jobs for 8 million people.  US workers have power they have not seen since the death of old unions.

And homeownership is not an option for most people under 35 is at 38% and dropping yearly.  By 50 only 70% can afford a home and that continues to drop as well. 


In the US a lot of the country is seeing very little inflation.  Outside of meat the main source of inflation is in energy from fossil fuels.  Has nothing to do with the economy either.  Biden said he would no longer be giving them corporate welfare, and they said if he held to this they would jack rates.  Now 9 months later everyone is freaking out that the energy companies jacked rate, completely forgetting this.

Other main source of inflation in the US is meat.   Meat plants suffered a lot of employee deaths while already being short due to Trump raids scaring off their illegal immigrant labor.  People not very happy to work in a meat plant for min wage when there are other option and historically they relied on heavy amounts of illegal immigrants, which is why Trump targeted this industry in the first place.  When hundreds of people are fired right before the pandemic, then no safety precautions are put into place and workers are against the vaccines in areas with meat plants, what did people expect would happen here?  Maybe they will allow kids to work the saws and things will be all ok.


Both of these are related to policy issues and not sure how either is linked to overall inflation.  Remove these and average increase in consumer prices drops well below the increase in wages.


www.supplychainbrain.com/articles/34057-meat-prices-continue-to-surge-with-worker-shortage

www.reuters.com/article/us-usa-treasury-tax-energy/biden-tax-plan-replaces-u-s-fossil-fuel-subsidies-with-clean-energy-incentives-idUSKBN2BU2HL

www.cnbc.com/2021/09/09/natural-gas-prices-are-rising-and-could-be-the-most-expensive-in-13-years-this-winter.html

Nov 13, 2021 0:18:07 GMT c said:

Nov 12, 2021 22:25:09 GMT iNCY said:

You realise that with inflation comes higher interest rates?
The only way you're okay is if you're asset values rise faster than the interest rates.
Even if they do, your 400k house being worth 500k now, doesn't actually help you make higher repayments.

Apparently not in the US it does not <.<

Interest rates are 0 for at least two more years.

Best job market for workers in the US in more than 60 years.  Right now 10 million jobs for 8 million people.  US workers have power they have not seen since the death of old unions.

And homeownership is not an option for most people under 35 is at 38% and dropping yearly.  By 50 only 70% can afford a home and that continues to drop as well. 


In the US a lot of the country is seeing very little inflation.  Outside of meat the main source of inflation is in energy from fossil fuels.  Has nothing to do with the economy either.  Biden said he would no longer be giving them corporate welfare, and they said if he held to this they would jack rates.  Now 9 months later everyone is freaking out that the energy companies jacked rate, completely forgetting this.

Other main source of inflation in the US is meat.   Meat plants suffered a lot of employee deaths while already being short due to Trump raids scaring off their illegal immigrant labor.  People not very happy to work in a meat plant for min wage when there are other option and historically they relied on heavy amounts of illegal immigrants, which is why Trump targeted this industry in the first place.  When hundreds of people are fired right before the pandemic, then no safety precautions are put into place and workers are against the vaccines in areas with meat plants, what did people expect would happen here?  Maybe they will allow kids to work the saws and things will be all ok.


Both of these are related to policy issues and not sure how either is linked to overall inflation.  Remove these and average increase in consumer prices drops well below the increase in wages.


www.supplychainbrain.com/articles/34057-meat-prices-continue-to-surge-with-worker-shortage

www.reuters.com/article/us-usa-treasury-tax-energy/biden-tax-plan-replaces-u-s-fossil-fuel-subsidies-with-clean-energy-incentives-idUSKBN2BU2HL

www.cnbc.com/2021/09/09/natural-gas-prices-are-rising-and-could-be-the-most-expensive-in-13-years-this-winter.html

That meandering post makes little to no sense.
In this thread you have argued:

1. homeownership is not an option for most people under 35 is at 38% and dropping
2. Most of the US is heavily in debt. Average American has 52,940 in debt. We are in good shape here I guess. Let the inflation come!!!
   

if US households are 53k in debt and not home owners, they are in the worst possible place for inflation.
Interest rates will rise inside of two years and unsecured debt is the worst kind.


edition.cnn.com/2021/11/10/success/credit-card-apr-feseries/index.html


"Over the past two quarters the average annual percentage rate has grown from 15.91% to 17.13%, leaving the current rate just a tick under the all-time record high of 17.14% that was reached in 2019"

Whether or not the Fed Reserve raises rates, the banks know it's coming and are pricing it in to their rates.
The Fed Reserve rate has little bearing on the bank interest rates apart from setting the floor for any rises... Certainly not the ceilings.

Oh man. Im off listening to pod, youth of the nation. Am i doing it right?

What I really want to know is how does social spending in the US cause inflation in Asia and the EU. If we get China to cut social spending will inflation here drop?

Also find it weird that everyone forgot when companies said they would freeze cost increases last year, and help stabilize prices, but that would mean after the pandemic they would have to raise prices higher to make up for it. Now they consider the pandemic clearing and raised the prices people are screaming hyperinflation.

I am sick of this getting weaponized against progressives when the issue has nothing to do with social spending at all and it was the conversative crackdown on migrant workers that drove up food costs domestically. I am not sure how though lowering the cost of prescription drugs leads to a shortage of microprocessors, or a vaccine mandate in the US leads to a decline in decline in international shipping.

What we see is a cycle in the US. Conservative politics leads to inflation then they leave office and blame liberals for the problems they created. Ford's policies lead to the Carter era inflation, Clinton dealt with the backlash from Bush Sr going to war in Iraq, Obama dealt with Bush Jr's war and deregulation causing the energy crisis. But Carter, Clinton, Obama and now Biden are to blame for inflation that started before they even set foot in office. Every time a democrat is elected into office they are screamed at about inflation. Even time the GOP takes office they spend like drunken sailors and cut taxes. It is getting really old.

My entire life I been told that electing democrats will lead to hyperinflation and the end of the US economy. Each time we are told that this new threat is uniquely different than the previous times they said this would happen and it did not.

Tell them Remy:

You know what would fix this problem fast in the US? Declare a war on inflation and do a draft. Make people quit their jobs and work for military wages in factories for 4 years. US trade gap will close real fast if we draft millions of people to provide low cost labor to multibillion dollar corporations. Do your patriotic duty!!!

Should also note that former sec of Labor who served under four presidents is saying the problem is not even inflation, but companies simply raising prices despite record profits, something which goes against the inflation theory for increasing costs, and instead places the blame at US corporations no longer having competition, and when they do, it is so little competition they can collude price increases.

If inflation was a real issue, profits would have decreased before the prices were raised. This was not the case though. It seems more likely fear of inflation, was all they needed to massively raise prices, then they can blame inflation for why they had to do it, despite having record profits, cash on hand and buying back stocks at record levels.

So if there is inflation, it is not been seen by corporate America who sets the prices that determine the CPI. Meanwhile more mergers are expected this year.

www.theguardian.com/commentisfree/2021/nov/11/us-inflation-market-power-america-antitrust-robert-reich

Nov 13, 2021 17:16:07 GMT c said:

What I really want to know is how does social spending in the US cause inflation in Asia and the EU. If we get China to cut social spending will inflation here drop?

Also find it weird that everyone forgot when companies said they would freeze cost increases last year, and help stabilize prices, but that would mean after the pandemic they would have to raise prices higher to make up for it. Now they consider the pandemic clearing and raised the prices people are screaming hyperinflation.

I am sick of this getting weaponized against progressives when the issue has nothing to do with social spending at all and it was the conversative crackdown on migrant workers that drove up food costs domestically. I am not sure how though lowering the cost of prescription drugs leads to a shortage of microprocessors, or a vaccine mandate in the US leads to a decline in decline in international shipping.

What we see is a cycle in the US. Conservative politics leads to inflation then they leave office and blame liberals for the problems they created. Ford's policies lead to the Carter era inflation, Clinton dealt with the backlash from Bush Sr going to war in Iraq, Obama dealt with Bush Jr's war and deregulation causing the energy crisis. But Carter, Clinton, Obama and now Biden are to blame for inflation that started before they even set foot in office. Every time a democrat is elected into office they are screamed at about inflation. Even time the GOP takes office they spend like drunken sailors and cut taxes. It is getting really old.

My entire life I been told that electing democrats will lead to hyperinflation and the end of the US economy. Each time we are told that this new threat is uniquely different than the previous times they said this would happen and it did not.

Tell them Remy:

That was a long rant filled with incorrect statements.
The inflation we are currently seeing has nothing to do with who is in the Whitehouse, never said that it did.
What I have repeatedly maintained is that a decade of quantitive easing and zero interest rates created the perfect storm.

But here we stand on the precipice and the worry is that rather than looking to curb inflation, psaki is running with inflation is good.
There are many ways to respond to an economic downturn and the West decided to skip the well worn path of government spending and go straight to monetary supply.
Now, after doing this for a decade the US wants to launch a social spending campaign pretty much unprecedented in its scope?
This is an either/or not both type of deal.
It's not a good time to release trillions of dollars in government spending/debt.

Let's not forget it was Obama who started this ride.


I'm not an economist, but I expect our unwillingness to take our medicine just sees the economic reckoning can kicked down the street a little, it grows larger each time and eventually you won't be able to kick it any more.
Politicians act like these reckonings can be avoided, but they can only be delayed.

Not saying we are there yet, maybe we are but that day is getting closer.

I see the same cycle I seen all my life of a Dem taking office in the US and people screaming inflation. This time they are pinning the actions of the world onto Biden. All this because he passed a single infrastructure bill, that is said to be the largest social spending package ever designed, despite Trump literally passing larger ones.

I also love the split here. Biden's 1 trillion dollar is said to be spending on an unprecedented scale and will cause hyperinflation. Trump's 2 trillion dollar infrastructure plan would have saved the US economy and starved off inflation. Everything in Biden's bill was in Trump's bill. So where is the difference outside of party?

Nov 14, 2021 0:41:12 GMT c said:

I see the same cycle I seen all my life of a Dem taking office in the US and people screaming inflation. This time they are pinning the actions of the world onto Biden. All this because he passed a single infrastructure bill, that is said to be the largest social spending package ever designed, despite Trump literally passing larger ones.

Nobody is screaming inflation because Biden is in office, people are screaming inflation because inflation is up by record amounts.
If this continues, interest rates will rise and the economy with contract faster than someones sphincter does when they drop their phone.

Nov 14, 2021 2:13:49 GMT c said:

I also love the split here. Biden's 1 trillion dollar is said to be spending on an unprecedented scale and will cause hyperinflation. Trump's 2 trillion dollar infrastructure plan would have saved the US economy and starved off inflation. Everything in Biden's bill was in Trump's bill. So where is the difference outside of party?

There is no difference, government spending needs to always be measured.

If Trump hadn't of welfared corporations through the pandemic we wouldn't have inflation now... But we would also have a deep and severe recession.
He also bullied the Fed reserve into keeping the QE going.
There's no good answer, monetary policy needs to be a careful balance trying to avoid the use of the brake or the accelerator.
If you take your foot off the accelerator and you're still picking up speed, you have the problem that's inflation.
My concern is that we lit a rocket under the economy for 10 years and it barely moved... But now it's picking up speed and there's no mechanism to wind back a decade of QE and low interest rates.

The underlying economy is not strong, that's what makes all this so nerve racking for nations.

Record amounts? Sure if you use a history that starts after the 80's inflation ease. We have not even reached 89's levels.

Government spending needs to be measured? Trump jacked up the US debt more than any other president. And the US economy is in incredible shape now with records profits being reports and more jobs than people seeking jobs.

And there it is, Trump good for spending, Biden bad for spending. Trump gives corporations and spikes inflations and that is good. Biden does not fix it fast enough and he takes the blame for Trump's actions. Like Obama did for Bush, Clinton did for Bush, Carter did for Ford, and so on.

Still does not explain how Biden's actions caused inflation in China though.


We seen this cycle before though. Next up in it is a deregulatory crash and recession from it.  Looking glass leans towards 2024.

Nov 14, 2021 3:17:43 GMT c said:

Record amounts? Sure if you use a history that starts after the 80's inflation ease. We have not even reached 89's levels.

Government spending needs to be measured? Trump jacked up the US debt more than any other president. And the US economy is in incredible shape now with records profits being reports and more jobs than people seeking jobs.

And there it is, Trump good for spending, Biden bad for spending. Trump gives corporations and spikes inflations and that is good. Biden does not fix it fast enough and he takes the blame for Trump's actions. Like Obama did for Bush, Clinton did for Bush, Carter did for Ford, and so on.

Still does not explain how Biden's actions caused inflation in China though.


We seen this cycle before though. Next up in it is a deregulatory crash and recession from it.  Looking glass leans towards 2024.

Are you okay mate? You don't even seem to be reading what I am writing.
I said that all the administrations of the last decade had fueled inflation at yes it is rising at record levels.
www.wsj.com/articles/us-inflation-consumer-price-index-october-2021-11636491959

I am not making this up.
I freely admit that Trump's decisions contributed to the inflationary situation we have at the moment.
While stating that I believe it was a very difficult set of circumstances that faced him as faced Obama on the GFC.
Both made keeping the carousel turning their priority, how could they not when they needed to win a second term.
No President is going to vote to an election having slammed the economy into a deep recession.

The issue is that it takes ever larger chunks of money to keep that can moving down the street.
That was hard enough to do when inflation wasn't a factor and how it is.
It's what makes the infrastructure bill a risk for the economy.
I don't live in the USA, I have no dog in this fight.

It will be an interesting case study of what happens when you try to put a fire out with gasoline.

So Europe, Australia and Asian can socially spend now during their own similar inflation problems and not have long term problems, but if the US does it they will? Sorry not buying it. Heard this story my entire life. Then when the GOP takes office inflation will vanish and tax cuts are needed to stimulus the economy.

This is nothing more than the wealthy wanting a greater piece of the pie at the expense of the American people. They could have kept costs the same and still seen record profits, but that was simply not enough for them. No other country tolerates inequality at the levels we do here and we use this to justify why we cannot have first world social conditions.

Better get real friendly with China, as the US will fall from backing the ultrarich over the American people and sooner or later those ultrarich will just head over to China when they become the market to be in.

Honest question here, what would you propose as a solution iNCY? (Sorry if you've already stated it in the other thread or I somehow missed it here) I'd ask c too but I think I can safely assume that answer or at least come close.

Economics are admittedly not within my wheelhouse, I'm just genuinely curious to know. My head screams "tax the 1%" but just trying to understand a more nuanced argument against that.

We need a hard reset.

Nov 14, 2021 12:04:13 GMT @ness said:

We need a hard reset.

Sounds like an authoritarian's wet dream. Unless you're arguing for Thanos 2024, that is.

Either option sounds like a bummer. I like bitching about existing too much. And also turtles...

Clearly we should return to the gold standard!!! Down with paper, up with shiny rocks!!!

Another take on how it is corporate monopolies driving inflation.

www.eurasiareview.com/11112021-robert-reich-whats-really-driving-inflation-corporate-power-oped

So restaurants are complaining now about how most will not be able to survive now. Asides from not having cheap labor from immigrants, their main issue is that they cannot buy the food they need from farms. Corporations can still get what they want at roughly the same rates they did last year by leveraging bulk buying. This leaves restaurants fighting over whatever corporations leave behind at inflated prices as now there is scarcity in what is left over.

No fix for this either as only a few groups buy the majority of farm goods in the US and any large farm that does not sell to them at the rates they are willing to pay will be hard pressed to sell their full harvest as the infrastructure is not there anymore to sell it in small quantities.

This is pushing restaurants to them be forced to buy from the corporations at a markup or compete with farms who essentially sell to them at the same inflated price. The money the farms get from the majority of their sales did not increase, but the profit corporations get did increase greatly as they buy for roughly the same price they did pre-inflation, and sell at post-inflation prices. Push for a higher cut, due to the price and the corporations will refuse to pay and say they can go elsewhere. Their prices are take it or leave it, knowing a farm cannot afford to leave acres of crops unsold.


All down the supply chain major corporations are increasing the profit margins, so from raw material to finished product once everyone gets their cut, the finished product costs progressively more.  And because it is inflation everyone can claim they are increasing profit margins because their costs are higher, despite corporate activities showing records amounts of stock buybacks, shareholder dividends or cash on hand.  This is also why once inflation cools off, the prices remain anchored at the inflationary rates for the majority of goods.  Since it was never about the cost to produce, there is no reason to lower prices when inflation subsides and the claimed reasons for the price increases goes away.

I love the new take making rounds today. Inflation is occurring because Americans in 2021 are spending more than they did in 2020. Because demand is up over this one year period, prices need to increase to compensate. The demand increased because people had access to cheap cash from stimulus funds. Nowhere in the articles is that 12% of Americans lost their jobs, and demand was historically low last year, which is why stimulus checks were offered, to prevent people from starving and to prop up a dying economy.