You are talking like inflation is some conspiracy wielded by “the rich” (who are they? Are they all friends with each other and plan all their schemes together?) against the “others”.
Fact is the inflation we are seeing here is caused by the after effects of Covid, the Energy price surges caused by the Ukraine war and in the special case of UK - Brexit, which has lead to huge import shortages due to increased bureaucracy at the border, etc…
So please stop this conspiracy talk about the “rich” creating inflation to disown the “poor”.
If a particular group has converging interests and is facing a similar set of incentives, they don't need to be in an explicit "conspiracy" to be aligned. The emergent behavior in a system can both advantage a particular group at the expense of another without there needing to be a conspiracy whatsoever.
Consider the comparison between Norway and Sweden, two extremely similar countries in almost all respects.
Food inflation in Sweden is 22.1% over 12-month [0]
Food inflation in Norway is 8.8% over 12-months [1]
Obviously someone is making money hand-over-fist from this 12.7% discrepancy.
Comments like the one above are really disruptive to any constructive conversations. It is not a conspiracy.
The comment above is (at best) astonishingly naïve. While it is a emotionally plausible argument, we can see it does not hold up if we compare the rates of inflation over similar countries.
Norway and Sweden are hardly similar in this respect. Norway is a net food exporter. Sweden is a net food importer. That alone can account for much of the discrepancy.
That could only makes sense if you count food in currency value, not in stuff you eat. Sweden is not great in agricultural productivity (terrestial argiculture), but it's a giant compared with Norway.
Maybe we should mention that Norway exports oil and gas, and Sweden does not.
It's pretty simple. Subtract the value of food imports from the value of food exports. If the value is positive then the country is a net exporter, and if it's negative then they're a net importer. Every major country imports some foodstuffs and exports others, but countries with a trade surplus are generally better positioned to handle food price inflation.
Food’s already super expensive there. A lot of stuff is required to be made locally. Tariffs on food imports are super high, like 100% IIRC. A burrito was $45 last time I was there. Big outlier country in general.
The "who are the elites?" question is one that many people struggle with when looking for who to point a finger at for modern economic woes. A lot us who post on this site are in technical fields and are well-compensated. So it wouldn't shock me if many people in the world consider "us" to be part of "them".
In this case though, we're simply talking about inflation. One cause of inflation that you've neglected to mention is quantitative easing and how it's been used to artificially lower interest rates while allowing for higher deficits. I'd suggest you start there before you strawman people who disagree with you as "conspiracy theorists"...
It's not really an active conspiracy. It's just the rich pursuing their own interests. When the workers or poor pursue their interests too effectively, the rich in positions of power make them take their medicine. But when the rich do it too effectively, well, that's just the free market and you can't do anything about that.
I find it fairly unlikely that the rich in the UK don't actually know each other. The UK probably has the most developed class divide of most western countries, so in-class socialisation is a pretty big deal around here.
> You are talking like inflation is some conspiracy wielded by “the rich” (who are they? Are they all friends with each other and plan all their schemes together?)
No of course not. That'd be 90s-Mr-Burns territory.
Nowadays you pay a SaaS offering to do it for you if you're a landlord:
So the question is -- is real estate the only market you'd do that in? Seems unlikely.
"If I had to guess, I would bet that the big food conglomerates have all signed up with some common AI-backed pricing software package, and that shares data between them. Or, at the very least, they've all started using AI algorithms to increase or decrease production of any number of goods to maximize their profits based on real-time sales and economic data. And since they're all probably contracting this out to the same or a handful of similar AI firms, the conclusions they reach are similar. If all the production companies are running algorithms that tell them to jack up their prices at the same time, well they all jack up their prices at the same time. They don't actually have to meet in some smoke-filled backroom to plot a price-increase conspiracy. They just all run similar algorithms that respond the same way to market trends. The consumer market is highly consolidated, with most goods having just 1-3 producers. If those few producers all sign up for the same AI price-setting software, there won't be price competition to punish needless price increases."
I think it's in Hackers & Painters that Paul Graham talks about the commonly held view that wealth is like a pie, that one group of people having more somehow means others must have less. He's also immensely wealthy, so I take what he says with a pinch of salt
"They" are the wealthy people, property owners and such, in society who make a scene if their wealth gets taxed any higher.
Every western society heavily taxes working, where often for me as a freelancer it hardly pays of to work more then 6-8 months per year.
But taxes on wealth are very low. And owning property often has many tax cuts, and tends to benefit from low interest rates.
The effect of it is is that either you play the wealth game through property or investing or you are lost out.
I think it would be fare to protect the assets people accumulate through hard work, but at the same time it should be more balanced then it is now and we shouldnt all have to be financial experts.
It's incredible, a lot of people in developed countries are thinking like argentinians now. In Argentina, the propagandist media companies that belong to politicians do everything in their hands to blame anyone for inflation, except for money printing policies dictated by politicians. And we have over 100% anual inflation.
I don't think it's a conspiracy theory - lots of companies are posting record profits right now as their prices have risen above the cost price inflation, so profiteering is a valid fourth class of price inflation.
This is. Tired talking point and basically entirely lies. Necessity prices have risen by large margins in the name of inflation, but they have also recorded insane profits at historic levels.
"rich" and "poor" are just holdovers from conquerer and conquered. Just because the mandate that one group acknowledge the other's right to create value by fiat (e.g. by stamping Caesar's face into a coin) is no longer delivered by guys with swords doesn't make it not a conspiracy by one group to keep another group in its place.
They got smarter about it in the late 70's. The rich don't even have to send guys anymore, they just send guns to the local thugs with an agreement that those thugs will, upon seizing power, hook the local economy into the US banking system.
The thugs get to keep the loans, but the debt gets transferred to the local community, which cements the "somebody who isn't you gets to create abstractions that you have to treat as money"-part of the deal.
The words that used to go with it are "progressive free-market policies", but I think Kamala Harris recently called it "anti-corruption" or something along those lines.
More like, "IRS". Taxation is the demand for the currency. Even if you conduct all trade with other people in seashells (or whatever), you'd still need to obtain dollars to pay your taxes.
Do central bankers and other policy elites have no truck with financial elites? What does it mean when stimulus is injected into markets for the purpose of 'stabilizing' them? Are they not concerned with financial markets? This seems to be the directly stated objective of many economic policies.
Is this a conspiracy theory or a simple observation of incentives?
The corporations lobby the gov and both enrich each other. It's not a conspiracy but a well known aspect of the modern world.
It breaks democracy benefitting a few in power.
The effects of covid are actually the effects of covid policies which benefited govs and big tech and other corporation's while screwing most people. Yes, it appears that people wanted it but when you consider the censorship, behaviour modification propaganda and unconstitutional state force application to suppress people who wanted to oppose them, it's not that clear of a picture.
Then Ukraine, also something that benefits the gov, the energy/war companies and corporations, and not the people. Also heavily propagandized to push more profiteering through endless war.
No conspiracy. Just the system at work and people like you dismissing the true criticism with the same old labels. You may feel an impulse to call me fascist, racist and other customary labels soon, heh.
It doesnt matter what you think. Poor people that loose money without possibility to do anything about it = angry people. That is a big problem. We know from history the consequence of terrible inflation in 30's in Germany.
This comment is bizarre. Corporations taking advantage of the current economic climate to make a profit is a conspiracy now? Most of the large corporations responsible for selling these supposedly "inflated" goods are posting record profits with no shame, and here you are covering your eyes and ears to defend them.
Inflation means price increases across all actors in an economy. Large corporations also have to pay higher production costs now. So all these „profits“ are eaten up by the price increases those corporations see, too. I don’t think you have a valid understanding of what a „profit“ really is…
> So all these „profits“ are eaten up by the price increases those corporations see, too. I don’t think you have a valid understanding of what a „profit“ really is…
Uh, you should google what the word "profit" means. You're thinking of "revenue".
Er, nope. You are mixing it up, I am sorry. Profit = revenue minus all expenses. So if prices are rising, revenue grows but profit stays the same as expenses are driven up too by inflated prices of the factors of production.
But it’s a typical observation I have whenever discussing economics with Europeans — economic illiteracy is rampant, here, unfortunately, because schools do not give much priority to basic economic facts.
> I have whenever discussing economics with Europeans — economic illiteracy is rampant
The economic illiteracy would be not being aware that all those megacorps are posting record profits and trying to gloss it over with made-up theories of your own and accusing an entire continent of people with economic illiteracy in the process:
If their costs were rising more than their revenue, they wouldnt post record profits. They are posting record profits. You are simply wrong. You just !made up! a theory to avoid the actual reality.
Why have you made such a blunt, exaggerated, false statement like 'European economic illiteracy' without doing so much as a google search. Do you know how that made you look...
That‘s a newspaper article published last year citing an NGO report based on annual reports on the year 2021… that was way before the price surges really began. I would wait for the annual reports on the year 2023.
Nestlé e.g. (to stay in Europe) reported a 45.2% decrease of its net profit for 2022 — but, supposedly, also due to out of the ordinary profit in 2021 after selling L‘Oréal. But they also note: „Organic growth reached 8.3%. Pricing was 8.2%, _reflecting significant cost inflation_. Real internal growth (RIG) was positive at 0.1%.“
But it’s typical for leftists to cherry-pick their data and only read news sources that confirm their bias. I hope you are even more angry with me now. :-p
There are heaps of other companies other than Nestle. One company doesnt make an argument.
> But it’s typical for leftists to cherry-pick their data and only read news sources that confirm their bias
Its not 'leftists' cherry-picking data. Its those who use vague words like 'price increases REALLY starting' - whatever that means - even as the very capitalist publications of the most capitalist corporations on the planet say that food corporations profited off of pandemic and the war.
So its basically the words of CNBC, Oxfam etc versus your 'really' theory.
> I hope you are even more angry with me now. :-p
I didnt notice that you were disingenous debater. I do now. It explains your absurd arguments, and the 'really' theory of price increases. I'll act accordingly and avoid losing time discussing with you.
I am sorry but you are mangling together so many different things just to prove your narrative about greedy food corps profiting from food price inflation. It all just doesn’t quite make sense. At least, I am assuming that’s what you like to communicate: Food prices increase because food corps want to make insane profits. Right? You are used to being agreed to, of course, as nobody likes big anonymous corporations making billions in money.
I’ll try to show you now why food corporations might make profits and impressive ones, too, but why they can’t have anything to do with steeply rising prices and why their profits do not hurt the average joe, necessarily.
Let’s reflect a little a bit about what a price is: When food prices rise why do they based on economic theory?
In a first approximation it could just reflect a scarcity. Say apple juice becomes more expensive. That could be because apples had a bad harvest season. Or transportation was hampered so not enough apple arrived in the factory or became spoiled. Or there were not enough people available for the harvest or the transportation. Can apple juice corps. expect fat profits because of an apple scarcity? Well, only if a company was lucky enough and managed to produce and sell the same amount of apple juice for the same cost compared to the last season. But since there is an apple scarcity, most companies would have less apples and, hence, have less juice to sell. Furthermore, people tend to drink less apple juice when it’s expensive. Both effects offset the increased revenue per apple on average for all the apple juice companies and, hence, imply a constant profit.
Another reason for a price surge might be monopolization. Say, Nestlé bought all apple juice corps. and can now command a much higher price. Fat profits? Well, Nestlé would have had to buy all their competitors first and in that process had spent quite a lot of money to be in this position. That would have seriously slashed their profit (even though their apple juice revenue would have sky rocketed). Furthermore, again, people would drink less apple juice under these conditions. Finally, obviously, Nestlé isn’t the sole provider of apple juice and in fact does not happen to be the sole provider of food (as you stated yourself) —- so it can‘t in fact profit from a monopoly under the current situation.
A third reason for a rising apple juice price might be a trend shift: People might find apple juice suddenly more attractive and tend to buy more of it at the expense of orange juice and are willing to pay more for it. Surely, that would increase profits for companies only producing apple juice. Producers of both apple and orange juice (like the typical Food Corp), however, would just measure a net zero revenue shift and a rather similar profit unless apple juice production is much more efficient than that of orange juice. But — whatever, consumers wanted to spent more money on apple juice and are now happy nevertheless.
That leaves inflation for another driver of increasing prices. Inflation means our money is losing value and, hence, can not buy as much apple juice as last year. That affects both consumers and producers, however, meaning consumers can buy less apple juice but at the same time apple juice producers can buy less apples (and less machine parts and transportation services). That brings us back to my original argument: Inflation can not drive real profits as — per definition — inflation affects the economy as a whole and hurts consumers and producers alike. Inflation does not mean a redistribution from consumers to producers as your thesis implies. Well, inflation implies a redistribution from consumers of money to producers of printed money but that’s quite a different story…
So why do apple juice corps. make profits in the first place? Because they spend less money in producing apple juice than they make in selling it. The larger the profit margin, the more efficient the company is and the bigger its profit. In a competitive market economy companies cannot just increase the price of the product they produce to boost profits. It is commanded by the market and is simply given. All they can really do is lower the costs of their production.
So while the food price inflation is bad — no doubt — it is not the fault of the food corporations with their fat profits. Ultimately, you want them to make a profit otherwise they would go bankrupt and couldn’t produce any food any more. And no food production is way worse than expensive food production.
In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US - instead you got put on 80% furlough and had a large part of your salary paid for by the government. This basically meant the rich got ever richer whilst doing no work and the poor tried to scrape by. In addition, covid contract schemes were widely abused by business owners, the most high profile case being that of Conservative peer Michele Mone who made off with £200 million. It is estimated that billions of pounds of public money has been irretrievably lost through what is essentially government neglect and corruption.
On top of this, you've got Brexit which was orchestrated by the right wing conservative aristocracy class for their own benefit. And we've also had a conservative government that has not only not pursued a green agenda over the last 13 years, but bent over backwards to get Russian energy money.
So yes, the factors leading to inflation were outside of control. But that doesn't change the fact that the powers that be in this country have been running the country in their own self interests and have given up on even pretending otherwise and that is why the UK is being hit harder by inflation than any other country in the western world. They were so high on their own supply they even elected Liz Truss to cut taxes in an inflationary environment and only reluctantly accepted that they weren't going to get away with it when the global market responded by saying it would tank the property market (which the whole stack of cards relies on).
> Are they all friends with each other and plan all their schemes together?) against the “others”.
This is the UK with it's notorious and very real class and aristocracy system. They don't call the royal family "the firm" for nothing.
> In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US - instead you got put on 80% furlough and had a large part of your salary paid for by the government. This basically meant the rich got ever richer whilst doing no work and the poor tried to scrape by. In addition, covid contract schemes were widely abused by business owners, the most high profile case being that of Conservative peer Michele Mone who made off with £200 million. It is estimated that billions of pounds of public money has been irretrievably lost through what is essentially government neglect and corruption.
It was the same in most EU countries, but wouldn't that result in lower inflation? The rich that kept getting richer would invest in stocks, business, real estate, park it offshore, buy another helicopter or yacht, etc. which wouldn't impact demand for most products whose prices are increasing.
> In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US
How does printing more money to give to everyone lower inflation?
I didn't say there was an either or did I? But the US approach is definitely preferable to giving the most amount of public money to the people who already have the most. Larger sums of money should have been given to the poor with it tapering off gradually as income levels increased. Instead it was given out in the complete opposite way, with people at the top getting the most and those at the bottom getting the least. The pandemic could have been the perfect opportunity for a soft debt jubilee to rebalance the system. Instead, it was just another thing yet again exploited for the benefit of the 1%.
Money was given to the top because the top controls the systems that allow the bottom to make money. Give to to the bottom they spend it, create nothing and now we all have nothing.
>The pandemic could have been the perfect opportunity for a soft debt jubilee to rebalance the system.
I don’t agree with either stimmy or the lockdown business handouts but I find it ridiculous people are using a world tragedy as some sort of crowbar to bring about their idea of some sort of require rebalancing. Not sure how those people even think how that could possibly play out beyond 3 months.
Starting to suspect some people feel the pandemic was the best thing to ever happen to them and are now upset it didn’t go further.
> Money was given to the top because the top controls the systems that allow the bottom to make money. Give to to the bottom they spend it, create nothing and now we all have nothing.
Amazing. Yes, I am sure the poor will just piss their money away on nothing. Rather than you know, starting businesses or upskilling themselves or paying their houses off or whatever. Because, you know, only the people already at the top of the pyramid know how to be productive and everyone at the bottom are just there because they're lazy and useless.
> I don’t agree with either stimmy or the lockdown business handouts but I find it ridiculous people are using a world tragedy as some sort of crowbar to bring about their idea of some sort of require rebalancing. Not sure how those people even think how that could possibly play out beyond 3 months.
Because historically, debt jubilees have been a common occurrence to maintain social order. The topic comes up semi regularly on hacker news, including yesterday. The fact of the matter is, if you don't agree with business handouts or stimulus, then you either don't agree with lockdowns and think we should have just gone about our business and let nature take it's course (if so I can see where you're coming from), or you want social disorder (I don't see where you're coming from). There's no way in hell you could have maintained a lockdown otherwise. People need money to eat and keep a roof over the heads and the poor do not have the savings to do that for an extended period of time without work. So if we're going to give money away to keep people alive, we might as well give more to the people who are struggling to survive rather than giving thousands and thousands to people who already have substantial amounts of assets. Similarly now with energy payment help, why on earth are we giving energy payments to people with second, third, fourth and however many homes rather than using that money to increase the amount we give to the poorest? That is not a ethical allocation of public money.
> Starting to suspect some people feel the pandemic was the best thing to ever happen to them and are now upset it didn’t go further.
If you're aiming this at me personally I was living at home and working a zero hours contract at a local venue so saw basically hardly any furlough money when the pandemic happened. I got £100 week from the job centre for and a handful of hours wage from the venue for a couple of months before they let us go. Meanwhile a guy I know who had been in his new teaching job barely a few weeks before covid hit was raking in over £3000 a month in furlough and treating himself to all manner of things like fire pits, jacuzzis and game consoles.
I saw the pandemic as an opportunity to escape minimum wage drudgery and worked my arse off improving my coding skills and used that to land a job at a local company as a software developer. Despite the fact half the developers worked remotely abroad, they made us go into the office with hundreds of others throughout the entire pandemic and then, when lockdowns were finally lifted for the last time, handed us all laptops and said we were free to work from home. So yeah, that was my covid experience.
So no, I don't think the pandemic was the best thing since sliced bread and that it should have gone further. What I do believe, is that when you give people at the bottom an opportunity and a bit of breathing space as opposed to pummelling them into the ground with debt and drudgery, is that those people can go on to make something of themselves.
> that is why the UK is being hit harder by inflation than any other country in the western world
I don't think that's true. Right now, UK inflation is lower than almost any European country east of Germany, including Sweden, and it seems inflation was running lower throughout COVID than even the US.
Please send me links if you've got any because this is conflicting with what I have been reading so it would be nice to have a more balanced view if this is the case.
"Oops...did I do that?" is a comedic phrase uttered by someone who makes a mistake which harms others but benefits them. Call it whatever you want, i.e. "Conspiracy theory", but you cannot deny who is harmed & who benefits.
Why does Brexit have to equal "increased bureaucracy at the border"? Is it due to the lifelong bureaucrats that loves enforcing it? An effective government should do everything in its power to reduce the bureaucracy in extraordinary times.
All countries have customs checks, to check that incoming goods conform with regulations, applicable tariffs are paid, etc.
Except countries in the EU, which has a common market that made such checks unnecessary inside of it. Of course there are still customs on the outside EU border.
So if you leave that, and your borders are now not internal market borders anymore but your and the EU's external borders, you're going to do more customs checks than you used to have. In both directions.
There's two sides to every trading relationship. Even if the UK tries to reduce bureaucracy on their side, there's still all the bureaucracy on the side of the other countries they're trading with. And they literally just torpedoed all their trade relationships by leaving a large customs union that allowed them to trade with a large number of important partners with significantly reduced bureaucracy.
I agree with you that bureaucracy here is the problem, and Brexit was the cause of it.
They've decided to leave the European Common Market, which was precisely designed to avoid the bureaucracy and reduce the burden of the customs procedures.
I would also add bunch of people in IT working primarily on peddling ads and developing total surveillance tools for years instead of doing something that produces real value.
There's a good case to be made that Putin was the richest man in the world. Nobody's sure what he's worth, but it's quite likely it was more than the $200B Arnault has. And Putin is singularly responsible for a good chunk of the inflation.
So blaming it on the rich might be appropriate, but not in the way that it's usually meant.
what he says, is but the way in which he conveys the meaning
the rich by this point aren't any group of people, but a section of the system.
the system is structural, not-alive. he is choosing to regard the system like rungs on a ladder. each rung is a social class.
the point I'm making is that he's describing the "ladder", referring to structural/systemic aspects of our civilization, not the "persons" standing on each rung which is the meaning you chose to focus on.
our society really is arranged in tiers or classes regardless of you accept it or not (but again, this is a way to understand it; there may be others)
in the UK the so-called "rich" (to answer your question) would be people with legal noble titles.
in Smerica this class of people is not explicit. I guess the older European system (which inspired American ones) at least is explicit about the fact that the royals and their nobles are "the rich" class. I countries with continuing monarchies, like the UK, they really have a noble title and registration. they're "better than you" by legal definition because of choices their parents and older ancestors made (or were forced to make)
The war in 100% the result of Putin. Putting the responsibility of this on Biden doesn't make sense. Besides, Russia was sending troops into eastern Ukraine since 2014, way before Biden took office.
You showed the evidence in your own post. The return to Biden brought the return of typical American foreign policy, which Trump upset. This foreign policy plan has basically been the same under Bush, Obama, and Biden.
The last time Putin pushed the Ukraine issue was under Obama. Under Trump’s watch, Putin didn't dare touch Ukraine.
If I was Putin, and I wanted to invade a country, I would sure as hell prefer Biden as the opponent than Trump. Trump might actually finish the war before it starts. Biden is still trying to remember he's president.
now the story changes: the war that putin started in 2014 is not the fault of Biden, but the fault of the foreign policy of everyone except the former guy?
instead of the dude who actually started it with the invading?
you also seem to misunderstand that Putin has been "touching Ukraine" since the war started in 2014, and the former guy did nothing to stop the war
I'm not saying Putin isn't responsible. That's as obvious as crickets. If people didn't commit evil, the world would be perfect.
Obviously, people commit evil.
However, if you are charged with authority, it is your responsibility to defend against evil, while also pushing to being about peace. Obama and Biden did not keep evil in check. Trump did so much more, as ironic as that may seem to you.
the former guy did literally nothing to push back against the evil of russia's invasion and genocide of Ukrainians which started in 2014 and lasted his entire term (aside from trying to extort the victim for personal political favors and getting impeached for it), as ironic as that may seem to you
Do you mean the sanctions our rulers voluntarily chose to impose on that sector? Or is there something intrinsic to the war that would have that effect?
Help me understand: is this a stacked chart? Why does a chart that ends in 2021 show inflation in 2022 and 2023?
> This inflation is due to insiders (central bankers) printing money.
If this is about the money supply, why is food more affected than other products? IMO everything is a factor, and there is no one culprit, and therefore no one easy fix.
Imagine being a rational human looking at g7 central banks adding 40% to the money supply in <2 years, and your focus is "everything is a factor, there no one culprit" for price inflation.
I look forward to open source ai economic simulation tools - when you change variables like m2, you'll see what happens to inflation - and there'll be no more ambiguity
> Imagine being a rational human looking at g7 central banks adding 40% to the money supply in <2 years, and your focus is "everything is a factor, there no one culprit" for price inflation.
Imagine being a rational human and deciding that a war involving two of the biggest agricultural exporters in Europe, one of whom is also one of the main exporters of oil and gas, as well as a ton of different important materials (nickel, steel, fertilizers, etc.), after 2 years of pandemic that crippled global supply lines and resulted in explosion of prices in many raw materials, have combined absolutely no impact on prices anywhere.
just sayin': why did inflation appear when it did? why not sooner? why not later? Why is the impact of inflation non-uniform?
We know the model pretty well: "money printer goes brrr" leads to higher prices for good and services. But the data lately doesn't make a great supporting case.
> I look forward to open source ai economic simulation tools - when you change variables like m2, you'll see what happens to inflation - and there'll be no more ambiguity
Economists have been leading the way in multifactor causal inference, but GPT in particular is not well suited to it. And macroeconomics in particular is hard to measure via natural experiment, so you're left trying to estimate counterfactuals based on a paucity of data
but look, my day job is people coming to me with timeseries data showing an engineering fuckup and debating about what caused it (usually ops vs prod). if theres a nuanced take, im all ears, but so far your fire has brought more heat than light.
Unless people who can afford it are hoarding groceries an increasing monetary base shouldn't be affecting grocery prices. Only a decrease in supply versus demand, or increase costs of production, should be increasing grocery prices, if market manipulations aren't happening.
I actually do get it. An excess of money doesn't automatically make things cost more. An excess of demand with (more purchases), or for (higher prices), that money does. The demand excess has to start somewhere.
What do you think putting more money into circulation does to demand & nominal purchasing power?
An excess of money causes increased demand per unit dollar and subsequently, higher prices and inflation, through mechanisms including the Cantillon effect, changes in monetary velocity etc.
If i deposit more $ in your bank account, what happens to your nominal demand?
If it was as simple as you say, why didn't we see double-digit inflation in 2021 and 2022 when the money in questions was actually being handed out? There are multiple factors at play here with "money machine goes brrr" being only one of the causes of inflation.
> What do you think putting more money into circulation does to demand & nominal purchasing power?
Ideally people would save for a rainy day. But people don't, and can't, always do this. Because for some this is the rainy day.
Non-ideally I would assume that most demand increases would go for non-groceries, and non-commodities in general, such as housing and travel, though I would expect some increase in durable goods commodity prices as people replace older goods with newer. Yet here we have grocery price increases. Are salaries in the grocery production chain going up 18%? Warehouse costs? I doubt it. The price increases are mainly coming from elsewhere, not from money printing.
It doesn't have to be groceries that they're buying. Factories in China producing non-essential consumer goods run off the same natural gas supplies that could otherwise be used to make fertiliser. Jets taking tourists on vacations run on basically the same fuel that could go into farmers' tractors or lorries transporting food to stores. More money allowing people to make more non-essential purchases impacts food supply if the global economy and global fossil fuel supply don't have the capacity to produce that stuff, and it turns out they didn't.
Sure. But there's a more immediate impact to fossil fuel supplies in the UK than an increase in demand. An increase in demand from an increased money supply is likely a contributing factor, but not the sole cause that elevenoh4 says it is. Has fossil fuel demand even fully bounced back to what it was in 2019?
Fact is the inflation we are seeing here is caused by the after effects of Covid, the Energy price surges caused by the Ukraine war and in the special case of UK - Brexit, which has lead to huge import shortages due to increased bureaucracy at the border, etc…
So please stop this conspiracy talk about the “rich” creating inflation to disown the “poor”.