So this amateur stuff is the “serious” reads you do about inflation? No kidding???
During COVID-19 the countries around the world simultaneously had their banks increase their currency in circulation. At the same time, they restricted economic citizens’ productive capacity. A recipe for consumer price inflation if there ever was one. With aging populations, many countries’ social welfare programs are underfunded, leading them to continue to print more money.
“Inflation is always and everywhere a monetary phenomenon.”- Milton Friedman.
That doesn’t stop illiterates from blaming the war in Ukraine, shortages, weather, etc, which are very minor contributors.
When you increase money supply at the same monetary velocity without a concurrent increase in productivity, you will eventually have consumer price inflation- every time.
Why would you think that they would be productive? What would be the incentive to be productive if there were little chance they could lose their job? Do you not understand human nature?
Clark does not assign percentage of blame here. He lists various contributory factors. Notice how he emphasizes massive money printing.
Inflation is too much money chasing too few goods. Almost always it is caused by increasing money supply. BUT it is true the lockdowns produced a shortage of some goods. The USA under the gold standard in the late 19-teens suffered price inflation during and after WW1, as European production was knocked out of commission by warfare. That was a rare event. Today it is affecting grain prices via Ukraine.
You cannot increase M2 by 80% and not get inflation. Just not possible.
During the ast bout of deficit spending producers shifted manufacturing to China. The lessened production cost dampened inflation somewhat. This trick is spent. Chinese wages are rising.
The comment that mused on controlling inflation without FED intervention is poppycock.The author is either an economic illiterate or a fool or both. How can the agent that caused most of the inflation be ignored in the remedy?
We have 2000+ years of history to teach us what happens when the money is debased using coin clipping and other shenanigans. This is not rocket science. It is depressing that humans cannot seem to learn from past mistakes.
Exactly right…which is why in September you see Federal employees taking all kinds of trips so that they can use every last dollar of the budget. This is what we get when there is absolutely no incentive to be responsible with taxpayer money. We really need to cut the government down by 10% and go from there…so much waste.
To be fair, the practice is not limited to just governments. It happens in the private sector as well.
The source of the problem lies in two major areas. One is the human drive to serve one’s own self interests. The other is the lack of measurable cost/performance for the department or business sub-group in question.
It’s the kind of stuff I was involved in as a strategic planner. One thing I found that most business and government leaders abhor is contingency planning. Many would rather pretend bad things won’t happen to them.
Contingency funding for government entities is vulnerable to political attack.
