It is remarkable the lengths to which government will go to avoid addressing the heartfelt concerns of ordinary Americans. There are 330 million of us; the number of those who work in Capitol Hill is much smaller. Do they really think that they can win this battle?
Exactly. The real problem is the massively sad and pathetic undereducation and gullibility of hundreds of millions of people who go along with “ the blame game “ staged by overly , covertly funded politicians. Yep. It sure is a “global village”. Thank you for writing and sharing this article. It is too sad that too many of us are either too busy working or doing nothing to read .
Perhaps half-senile half-wits and professional liars like Biden, Warren, and Psaki should just get out of public life. They're nuisances, at best. The Cult of Warren as a deep expert on economics and finance is particular irksome. Every time she opens her mouth on the subject, it's clear how little she knows.
Of course it's money/credit demand that's the cause of *general* inflation (a general rise in the price level). It always is. The measure of broad money (M2 = M1 + short-term credit; M1 = checking accounts + cash (M0), essentially) has grown by about 40% in the last two years, the largest increase since the 1970s. Duh.
What's different about this from the 2008-17 QE experience is that QE by itself is *not* money printing, contrary to mistaken beliefs in some quarters. It's an expansion of bank reserves. (Fed creates new reserves for member banks in the system, uses those to purchase government and government-backed debt from same banks.) The actual flow of these reserves in the economy is controlled by, not the Fed funds or overnights interbank lending rate, but something relatively new, IOER (interest on excess reserves). That rate, low as it is, incentivizes banks from lending out most of the excess reserves. Its velocity is close to zero, and they don't circulate much. So in 2008-17, they contributed in only a limited way to inflation in the ordinary CPI sense. (They did contribute, massively, to asset inflation -- real estate, stocks, bonds, etc. -- by making credit ultra-easy if you already some assets as collateral -- wealth effect and all that, a major source of wealth inequality.)
What's changed is that in 2020, the Fed slipped back into a policy error from the 1960s and 70s, called "policy support" or "policy coordination," whereby monetary policy becomes subordinated to massive increases in fiscal spending, which *do* go out into the economy as ordinary circulating money or short-term credit. The last time the Fed made this mistake was in 1965, when it was forced by LBJ into it, leading to the 1965-82 Great Inflation. This time the Fed volunteered, and they at least now acknowledge their mistake. It is eerily like the 1970s, at least in some ways. First, food inflation, then energy inflation (neither is done), reflecting supply bottlenecks in overstretched industries (then caused by the Vietnam war, now caused by COVID lockdowns and labor shortages) -- then an explosion of general inflation.
Kudos to Gregg for writing and publishing this. It shouldn't be brave or controversial to tell such obvious, simple facts. In some quarters, it seems to be.
That quote perfectly encapsulates the ideology and motivations for Trump supporters. White grievance and resentment, not "economic anxiety." i.e. March on Charlottesville, Jan. 6, etc.
Wow...I love Common Sense! Anybody who knows a lick about economics knows that what Mr. Gregg writes is true - all of it. The know-nothing, blame-deflecting "leaders" who got us into this mess are supposed to get us out of it. So what are they doing? Forgiving student loans, deflecting the conversation to Roe v. Wade, keeping Trump in the limelight as if he's to blame for everything, ignoring the border...anything but finding fixes to the problems they created. For a long time I felt strongly that the federal government was the biggest threat to my personal financial security. When Trump was president I didn't feel that way (and I don't like Trump!), but I sure feel that way again.
A growing population and increasing productivity are inevitably resulting in unsustainable growth and overproduction. This ought to lead to deflationary recession, actually. However, governments have been delaying the day of reckoning by juicing demand with cheap money, largely because the entire structure is driven by debt which relies on growth for repayment. So, the debts will be repaid but with devalued money. Pain falls mainly on those with no recourse to the public trough. But there is Stein's Law: "If something cannot go on forever, it will stop."
No Joke Diet that is sure to work! Simply spend the same amount on dining out and at the grocery as you did during Trump and you will lose lots of weight. It gets Better! As the year goes along you will lose even more while spending the same! The No Joke Biden diet!
No matter what topic a Substack author or article pursues, and despite the attempts of subscribers to apply their best thoughts to the matter at hand, we seem to find ourselves forever staring into the black hole disconnect between our lives and the actions of our beloved leaders in that shining city of virtue on the Potomac, Washington D.C. Is the problem a question of ineptitude in our leadership vs. our hope for the creation of practical solutions to create a prosperous American future or is it the avaricious darkness of rigged game pay me and the consequences be damned D.C. players? Does American leadership and politics still possess definable lines of moral demarcation? Where does the light and vision reside? Or is it as our friend Jimi said: "There ain't no light no where."
Every knowledgeable person I've encountered believes that a vibrant self sufficient middle class is necessary for the survival of a democracy. Is the assault on the American Constitution and destruction of the American economy and middle class the well thought out willful actions of a predatory financial world elite or just the opportunistic avarice present at the heart off all thievery. "It's there for the taking and I don't care who gets hurt." Is it one, the other, neither or both?
No one anywhere denies that Americans are experiencing the greatest upward transfer of wealth and resources in human history. The blowback is in our faces. A leadership indifferent to INFLATION. Wide open borders. Cities and industry gutted. Out of control crime. Addiction . A manipulated, dispossessed and uneducated youth. An ever more shattered, fractured and divided society and culture. Interestingly, all these problems represent actual for profit industries manned by well paid self propagandizing sycophants who have no intention of solving anything. A picture of America is next to the definition of ANOMIE in the Websters.
If tin whistles are made out of tin what are fog horns made out of?
This is mostly on Democrats for approving stimulus that was never needed. I believe many of them pushing the policies knew they were wrecking the economy, but did it expecting it would help their Great Reset project. They were wrong as they are usually wrong on understanding the consequences of their actions. The rest are just stupid people elected by voters that don't know the difference between the junk from their media feeds and real assessments of politician character.
Gregg's summary of the real cause of inflation and debunking of the "corporate greed" trope is excellent and spot on. He was kind enough to spare his readers how all this unfolds: your children and grandchildren will face massive debt-servicing headwinds that will reduce real economic growth to a trickle, if that. For example, Medicare and Social Security are simply not funded for more than a few more years. That fact will lead to either massive cutbacks in those popular programs or massive further borrowing. We're talking about at least a doubling of today's current $30T in Federal debt, up from about $5T at the turn of the century. Mind you, 2/3 of all Federal outlays already go for entitlement programs of one sort or another. This assumes that things like universal basic income or student loan exoneration never come to fruition. At least our impoverished descendants will enjoy the virtue of knowing that there are, as it turns out, dozens of heretofore unknown genders, and that behind every remaining success story is some unrepentant racist.
Housing prices will never be included in inflation numbers, because homeowners form a significant and disproportionately politically active voting block. Homeowners want the value of their homes to increase at all times. Even when they want the price of literally everything else on the planet to fall.
You can’t have it both ways. You want the value of your home to increase by $20,000 a year? Expect to pay more for gas and broccoli, too.
It is remarkable the lengths to which government will go to avoid addressing the heartfelt concerns of ordinary Americans. There are 330 million of us; the number of those who work in Capitol Hill is much smaller. Do they really think that they can win this battle?
Don't test our patience.
well that lady could buy a "tomahawk" steak in my grocery store and have 30 dollars left over. so why is she complaining
Exactly. The real problem is the massively sad and pathetic undereducation and gullibility of hundreds of millions of people who go along with “ the blame game “ staged by overly , covertly funded politicians. Yep. It sure is a “global village”. Thank you for writing and sharing this article. It is too sad that too many of us are either too busy working or doing nothing to read .
Perhaps half-senile half-wits and professional liars like Biden, Warren, and Psaki should just get out of public life. They're nuisances, at best. The Cult of Warren as a deep expert on economics and finance is particular irksome. Every time she opens her mouth on the subject, it's clear how little she knows.
Of course it's money/credit demand that's the cause of *general* inflation (a general rise in the price level). It always is. The measure of broad money (M2 = M1 + short-term credit; M1 = checking accounts + cash (M0), essentially) has grown by about 40% in the last two years, the largest increase since the 1970s. Duh.
What's different about this from the 2008-17 QE experience is that QE by itself is *not* money printing, contrary to mistaken beliefs in some quarters. It's an expansion of bank reserves. (Fed creates new reserves for member banks in the system, uses those to purchase government and government-backed debt from same banks.) The actual flow of these reserves in the economy is controlled by, not the Fed funds or overnights interbank lending rate, but something relatively new, IOER (interest on excess reserves). That rate, low as it is, incentivizes banks from lending out most of the excess reserves. Its velocity is close to zero, and they don't circulate much. So in 2008-17, they contributed in only a limited way to inflation in the ordinary CPI sense. (They did contribute, massively, to asset inflation -- real estate, stocks, bonds, etc. -- by making credit ultra-easy if you already some assets as collateral -- wealth effect and all that, a major source of wealth inequality.)
What's changed is that in 2020, the Fed slipped back into a policy error from the 1960s and 70s, called "policy support" or "policy coordination," whereby monetary policy becomes subordinated to massive increases in fiscal spending, which *do* go out into the economy as ordinary circulating money or short-term credit. The last time the Fed made this mistake was in 1965, when it was forced by LBJ into it, leading to the 1965-82 Great Inflation. This time the Fed volunteered, and they at least now acknowledge their mistake. It is eerily like the 1970s, at least in some ways. First, food inflation, then energy inflation (neither is done), reflecting supply bottlenecks in overstretched industries (then caused by the Vietnam war, now caused by COVID lockdowns and labor shortages) -- then an explosion of general inflation.
Kudos to Gregg for writing and publishing this. It shouldn't be brave or controversial to tell such obvious, simple facts. In some quarters, it seems to be.
That quote perfectly encapsulates the ideology and motivations for Trump supporters. White grievance and resentment, not "economic anxiety." i.e. March on Charlottesville, Jan. 6, etc.
Yes....it's the media that's "divisive"....ok.
Wow...I love Common Sense! Anybody who knows a lick about economics knows that what Mr. Gregg writes is true - all of it. The know-nothing, blame-deflecting "leaders" who got us into this mess are supposed to get us out of it. So what are they doing? Forgiving student loans, deflecting the conversation to Roe v. Wade, keeping Trump in the limelight as if he's to blame for everything, ignoring the border...anything but finding fixes to the problems they created. For a long time I felt strongly that the federal government was the biggest threat to my personal financial security. When Trump was president I didn't feel that way (and I don't like Trump!), but I sure feel that way again.
Whether essentials are more expensive due to inflation or supply chain issues is irrelevant; the politicians responsible are the same.
Really well done!
Well, the price of stocks experienced some deflation today. NASDAQ 5% off. So, there's that.
A growing population and increasing productivity are inevitably resulting in unsustainable growth and overproduction. This ought to lead to deflationary recession, actually. However, governments have been delaying the day of reckoning by juicing demand with cheap money, largely because the entire structure is driven by debt which relies on growth for repayment. So, the debts will be repaid but with devalued money. Pain falls mainly on those with no recourse to the public trough. But there is Stein's Law: "If something cannot go on forever, it will stop."
No Joke Diet that is sure to work! Simply spend the same amount on dining out and at the grocery as you did during Trump and you will lose lots of weight. It gets Better! As the year goes along you will lose even more while spending the same! The No Joke Biden diet!
No matter what topic a Substack author or article pursues, and despite the attempts of subscribers to apply their best thoughts to the matter at hand, we seem to find ourselves forever staring into the black hole disconnect between our lives and the actions of our beloved leaders in that shining city of virtue on the Potomac, Washington D.C. Is the problem a question of ineptitude in our leadership vs. our hope for the creation of practical solutions to create a prosperous American future or is it the avaricious darkness of rigged game pay me and the consequences be damned D.C. players? Does American leadership and politics still possess definable lines of moral demarcation? Where does the light and vision reside? Or is it as our friend Jimi said: "There ain't no light no where."
Every knowledgeable person I've encountered believes that a vibrant self sufficient middle class is necessary for the survival of a democracy. Is the assault on the American Constitution and destruction of the American economy and middle class the well thought out willful actions of a predatory financial world elite or just the opportunistic avarice present at the heart off all thievery. "It's there for the taking and I don't care who gets hurt." Is it one, the other, neither or both?
No one anywhere denies that Americans are experiencing the greatest upward transfer of wealth and resources in human history. The blowback is in our faces. A leadership indifferent to INFLATION. Wide open borders. Cities and industry gutted. Out of control crime. Addiction . A manipulated, dispossessed and uneducated youth. An ever more shattered, fractured and divided society and culture. Interestingly, all these problems represent actual for profit industries manned by well paid self propagandizing sycophants who have no intention of solving anything. A picture of America is next to the definition of ANOMIE in the Websters.
If tin whistles are made out of tin what are fog horns made out of?
GOT CONSTITUTION?
This is mostly on Democrats for approving stimulus that was never needed. I believe many of them pushing the policies knew they were wrecking the economy, but did it expecting it would help their Great Reset project. They were wrong as they are usually wrong on understanding the consequences of their actions. The rest are just stupid people elected by voters that don't know the difference between the junk from their media feeds and real assessments of politician character.
Gregg's summary of the real cause of inflation and debunking of the "corporate greed" trope is excellent and spot on. He was kind enough to spare his readers how all this unfolds: your children and grandchildren will face massive debt-servicing headwinds that will reduce real economic growth to a trickle, if that. For example, Medicare and Social Security are simply not funded for more than a few more years. That fact will lead to either massive cutbacks in those popular programs or massive further borrowing. We're talking about at least a doubling of today's current $30T in Federal debt, up from about $5T at the turn of the century. Mind you, 2/3 of all Federal outlays already go for entitlement programs of one sort or another. This assumes that things like universal basic income or student loan exoneration never come to fruition. At least our impoverished descendants will enjoy the virtue of knowing that there are, as it turns out, dozens of heretofore unknown genders, and that behind every remaining success story is some unrepentant racist.
Housing prices will never be included in inflation numbers, because homeowners form a significant and disproportionately politically active voting block. Homeowners want the value of their homes to increase at all times. Even when they want the price of literally everything else on the planet to fall.
You can’t have it both ways. You want the value of your home to increase by $20,000 a year? Expect to pay more for gas and broccoli, too.
Warren is a harpy…..dangerous ideologue
Senator Karen