• Tankiedesantski [he/him]@hexbear.net
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      1 year ago

      If the main cause is increased monetary supply, it’s going to get far worse as the world de-dollarizes.

      The USD enjoys an exorbitant privilege because its the world’s premier reserve and trading currency. Under the old rules, if the Fed printed more money, other countries would buy it to settle their international trade and as a safe harbor for their wealth.

      The extraordinary sanctions against Russia have caused countries to shift to other currencies to settle trade since they still want/need to buy oil, gas, and food from Russia. That means that there’s going to be a lot more USD with no foreign escape valve.

        • Tankiedesantski [he/him]@hexbear.net
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          1 year ago

          I think it’s telling that even during the worst period of US-Chinese relations in recent memory, the US sent Yellen over to Beijing to beg China to buy more dollar bonds.

          There’s a faction in Washington that knows the US economy is on the ropes but their appeals for cooperation are being drowned out by the other faction just chanting “WAR! WAR! WAR!”

            • Tankiedesantski [he/him]@hexbear.net
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              1 year ago

              I don’t think WW3 would actually help the US economy. WW2 pulled the US out of the Depression because the manufacturing capacity was there but there wad a crisis of confidence and liquidity. The government pumping tons of money into military spending solved both of those problems.

              Nowadays, the US doesn’t have enough manufacturing. Even the weapons America supposedly builds are riddled with imported Chinese parts. Go to war with China or any major power and the US Government will flood weapons makers with money but that money has nowhere to go so it’ll just drive up inflation even more.

              • GreatWhiteNope [she/her]@hexbear.net
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                1 year ago

                I agree that WW3 won’t save the economy this time, I just think the US doesn’t have another answer.

                Although I’m sure they’ll keep throwing money at consulting companies to research the issue and give them the same answer back.

    • ☆ Yσɠƚԋσʂ ☆@lemmy.mlOPM
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      1 year ago

      Nothing really changed, business have been jacking up prices while suppressing wages this whole time. It’s not really a new phenomenon. The fed printing money created more liquidity, but that doesn’t directly create inflation which is the rise in prices of goods and service. That’s done by people who control pricing which are the business owners.

      • hexi [they/them]@hexbear.net
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        1 year ago

        . The fed printing money created more liquidity, but that doesn’t directly create inflation which is the rise in prices of goods and service. That’s done by people who control pricing which are the business owners.

        It absolutely affects inflation because there’s more money chasing the same number of goods/services.

        If business owners don’t raise their prices at all, the real price of those goods would drop, because each dollar is worth less when you pump up the money supply.

        • ☆ Yσɠƚԋσʂ ☆@lemmy.mlOPM
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          1 year ago

          It absolutely affects inflation because there’s more money chasing the same number of goods/services.

          Since the money is going predominatly to the wealthy then there isn’t more money chasing goods and services. The average consumer is not benefiting from QE as you yourself pointed out.

          Business owners are raising prices in way that’s increasing their profits, they’re not doing it to keep up their rate of profit steady. https://thehill.com/business/3756457-corporate-profits-hit-record-high-in-third-quarter-amid-40-year-high-inflation/

          • hexi [they/them]@hexbear.net
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            1 year ago

            The wealthy don’t just put it under the mattress.

            If they do some big ego projects, the people they hire take that money and increase their own consumption.

            If they park it in investments, some company takes the capital injection and increases their spending.

            All that money chases labor, and labor can be reapportioned to meet different needs. A billionaire can buy a slightly bigger yacht with their share of the Fed printing. That bigger yacht needs a little more labor, and someone ends up building more cabinets for the interior rather than building housing for the poor.

            The billionaire doesn’t blame themselves for inflation, and someone at the bottom can’t figure out why suddenly a full time job doesn’t pay for housing. But that Fed decision moved labor from benefiting the poor, to benefiting the 1%.

            • ☆ Yσɠƚԋσʂ ☆@lemmy.mlOPM
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              1 year ago

              They don’t put it under their mattress, but the projects they invest into aren’t resulting into wealth being generated by the working class. When these people create a new business ventures, they still pay subsistence wages. So, you get more employment, but it’s low quality employment. Any actual wealth produced ends up going to the capital owning class.

              So again, people who own capital are the ones who decide the prices and the wages. These are the people in control of what we call inflation.

              • hexi [they/them]@hexbear.net
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                1 year ago

                the projects they invest into aren’t resulting into wealth being generated by the working class.

                Irrelevant, because I never claimed it did. I only said that money ends up competing for labor and other resources.

                If they could just raise prices, they would have done it before. So why didn’t they?

                Because what actually changed was an increase to the money supply.

                • ☆ Yσɠƚԋσʂ ☆@lemmy.mlOPM
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                  1 year ago

                  Again, they have raised prices before. Inflation didn’t just start yesterday. I’m really not following the argument you’re trying to make here. You still haven’t actually explained the causal chain between the increase in money supply and inflation, nor have you provided any counter argument to my point which provides a clear and direct explanation of what’s happening.