It seems usually, when inflation is reported on, the printing of money is not mentioned, though far and away it is the main factor causing substantial inflation.
It's humorous how certain all the libertarian armchair economists are that this inflation is caused by the money supply rather than the extremely visible effects of the broken supply chain.
No no, the everything shortage, massive backups at the ports, the trucker blockade, and everything else are totally unrelated; clearly it's a problem of fiscal policy.
Cars and trucks + gasoline + other oil products + meat make up 70% of the excess inflation we're seeing. Cars have a specific and well-defined supply chain issue (semiconductor unavailability) that we believe will resolve eventually. Meat prices seem to be dropping. And energy prices are only high in a relative sense: WTI crude is cheaper now than it was in most of the period 2007-2014 [1].
You mean things like people NEED? when oil goes up EVERYTHING goes up. What about food and rent? Food is probably at least 10 percent and rent up at least 20 percent in my city. This only hurts the lower and middle class.
Like I said, oil is up. But it’s not up that much compared to prices we’ve seen in this past decade. I’m not convinced that raising interest rates (and potentially throwing our whole economy into a depression) is the right answer to any of these problems. But it’s a very real answer that a lot of people in this thread seem excited about.
Constraint engineering:
You mitigated the money supply constraint. If Supply Chain is the new constrain as you posit, it means structurally, the infra we've got is breaking down, and that money should be re-settling in tooling or re-establishment of manufacturing/factories to mitigate the unreliable supply chain.
In order for that to take place, we need a prioritized list of what goods can be focused on economically. Then we need to get people organized and hop to it. That isn't happening. Either because investors are to squeamidh to take a risk, or Execs aren't popping up with ideas for execution to get invested. Execs aren't starting businesses, because that takes significant capital and stability from which to embark on the journey of fund raising from. Increasingly, that gets further and further out of reach as people don't get paid enough/the right experience to build up the springboard to jump off of, or even if they do the list for industrial sectors without value deserts is shrinking due to hyperoptimization fueled my mergers and acquisitions combined with an optimization to minimize worker pay, silo people, and an increased tendency to poach advice only from an entrenched "management" class.
I mean, none of these problems seem terribly obscure or hard to reach from my perspective. Capital is increasingly centralized, and if you've got international players not playing nice enough to keep JIT feasible, you have to go old school.
You think dumping trillions of money in a covid stimulus package didn't cause inflation? Most of went to the rich anyway. Demand should go down when prices go up.
I don't think so, because as you said most went to the rich anyway. For the inflation to be caused by the stimulus, it'd have to actually be in the hands of people spending it.
Demand can only go down when prices go up for elastic goods, so this isn't a factor for, e.g., oil, and anything made or transported using it (everything). Demand is further increased by people having already put off a lot of spending for 2 years.
> caused by the money supply rather than the extremely visible effects of the broken supply chain
Supply chains disruptions are a core feature of monetary inflation, and they always have been.
When you adjust the price of money (interest) to where it is more affordable to pull future consumption into the present, one day the future becomes the present. And that is a future where there is a shortage: the hardworking ants eventually do get the better of the summer grasshopper.
That it need be said, but this current supply shock was predicted by everyone not enthralled to Keynesian policy prescriptions. The 1970s saw similar supply shocks and inflation, caused by (1) the Nixonian debasing of the monetary system in throwing off the last vestiges of the gold standard, and (2) various incompetences of spending and energy policy failure in the Carter administration.
This is what happens when you think there's a centrally planned "natural" rate of interest for the economy, and don't allow interest rates to be accurately priced on a per-instrument / sector / commodity basis.
To a first approximation, a libertarian would ignore all government statistics and instead look at markets. He sees the massive 10bp inversion in the eurodollar spot curve two years out, concludes that there is no (monetary) inflation, and positions himself for (monetary) deflation. He would agree with you that the CPI inflation has all the causes that you mention, perhaps throwing in lockdowns, vaccine mandates, and general government incompetence for good measure.
[1] https://fred.stlouisfed.org/series/M2SL