Anyone want to talk about inflation?

[kmiklas]

Can we talk about inflation for a minute?

If the Fed has the ability to create an "infinite supply of money," is this not devaluing our currency? Is (hyper)inflation a risk here?

I don't know how I feel about creating and pouring tens of trillions of dollars into the money supply. Will a pint of beer soon cost $50?

 

[Scataphagos]

Can we talk about inflation for a minute?

If the Fed has the ability to create an "infinite supply of money," is this not devaluing our currency? Is (hyper)inflation a risk here?

I don't know how I feel about creating and pouring tens of trillions of dollars into the money supply. Will a pint of beer soon cost $50?

Yes, yes, and yes.

 

[trdes]

It's risking that vs deflation. We're a consumer based economy that relies on expansion of debt and consuming goods. Neither scenario is likely to have a great outcome. Which path will be the easiest to recover from, I don't know maybe someone else has a good read on that.

 

[Scataphagos]

It's risking that vs deflation. We're a consumer based economy that relies on expansion of debt and consuming goods. Neither scenario is likely to have a great outcome. Which path will be the easiest to recover from, I don't know maybe someone else has a good read on that.

The Fed and our government have always had the view, "inflation easier to cope with than deflation". (Inflation is the "cover" for government deficit spending... so genuine deflation to be avoided at all costs.)

 

[zdreg]

It's risking that vs deflation. We're a consumer based economy that relies on expansion of debt and consuming goods. Neither scenario is likely to have a great outcome. Which path will be the easiest to recover from, I don't know maybe someone else has a good read on that.

There is nothing wrong with deflation. It is normal part of the business cycle to get rid of excesses that occur over time.

In time proponents of MMT- Modern Money Theory that you can print all the money without inflation will be proven to be the charlatans that they all are.

 

[morganist]

Can we talk about inflation for a minute?

If the Fed has the ability to create an "infinite supply of money," is this not devaluing our currency? Is (hyper)inflation a risk here?

I don't know how I feel about creating and pouring tens of trillions of dollars into the money supply. Will a pint of beer soon cost $50?

There are many ways to see inflation the Monetarists view it as an excess of money supply, which should be controlled with interest rate increases. The Keynesians don't seem to mind a bit of inflation and invest money to stimulate economic growth, sometimes at the cost of higher inflation.

The neoclassicals see it, often at least, as an inability for the economy to produce enough goods and services pushing the price for the limited goods available up. They attempt to enable business operations to increase the quantity of goods and services available to reduce prices.

Then there is the international element of inflation, is it down to the price of purchasing goods from abroad? How dependent is a nation or region on importing goods and services? This might be another reason why it occurs. There are many different types of inflation, cost push, supply shock, demand pull, exchange rate related, emergency and disaster related inflation.

The real issue might be more how to control inflation, my school of economic thought 'Morganist Economics' uses alterations in pension saving to sustain aggregate price inflation and to stimulate economic growth. I also try to stimulate economic growth to increase the quantity of goods and services available through regulation and legislative reform.

 

[cdcaveman]

There is nothing wrong with deflation. It is normal part of the business cycle to get rid of excesses that occur over time.

In time proponents of MMT- Modern Money Theory that you can print all the money without inflation will be proven to be the charlatans that they all are.

Exactly they teach this crap in college and people swallow it deep..... Deflation is the enemy of the state....it's a natural health correction process that not only helps liquidation of bad debt ,bad business, but as well BAD BEHAVIOR!!!! WE ARE SUBSIDZING BAD BEHAVIOR with our future purchasing power....this is the most basic of economic premises.,. I don't say alot on this forum but heed my warning.....gold and silver are going to run

 

[trdes]

There is nothing wrong with deflation. It is normal part of the business cycle to get rid of excesses that occur over time.

In time proponents of MMT- Modern Money Theory that you can print all the money without inflation will be proven to be the charlatans that they all are.

Yes, nothing inherently wrong. But we're already so far down the path, that is my point. You can't just pump the breaks and turn around now just because there's nothing inherently wrong with deflation. Whether we like it or not, deflation is bad for US at this point.

 

[Tsing Tao]

Honestly, I think the big difference this time around will be the driver of the inflation. In the past, the money printing didn't make itself into the greater economy, staying isolated to assets like stocks, RE, etc. You also had all the goods you needed, ie, the supply was there for the taking. This is essentially cost-push inflation, which drives up input costs and leads to margin compression as companies have to deal with higher inputs yet are unable to pass these costs on to the consumer sufficiently.

This time we have a massive supply shock coming (already here) with massive money both monetarily and - more importantly - fiscally. With the massive fiscal stimulus, you can bet your ass the money is going to find its way into the greater economy. Goods are going to be scarce for a while. This is going to manifest itself into demand-pull inflation once the economy picks itself up again, and this is something we haven't seen in a long, long time.

This will bring real inflation.

 

[interdim]

Can we talk about inflation for a minute?

If the Fed has the ability to create an "infinite supply of money," is this not devaluing our currency? Is (hyper)inflation a risk here?

I don't know how I feel about creating and pouring tens of trillions of dollars into the money supply. Will a pint of beer soon cost $50?

How would you define what inflation is and the metric used to to determine it?