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(CNBC)   So, Mr./Ms. Survey Respondent: What is your biggest economic fear? Is it A) INFLATION, B) INFLATION, or C) INFLATION? Or do you feel the media INFLATES these fears?   (cnbc.com) divider line
    More: Obvious, Central bank, Federal Reserve System, Monetary policy, Survey of Consumer Expectations, Federal Reserve Bank of New York, household income, Money supply, Bank of England  
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331 clicks; posted to Business » on 10 May 2021 at 6:23 PM (6 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



21 Comments     (+0 »)
View Voting Results: Smartest and Funniest
 
2021-05-10 6:02:12 PM  
Odd that people who are feeling the effects of a year of economic uncertainty fear rising prices.
 
2021-05-10 6:35:40 PM  
media inflating fears is common as inflation and water is wet.
 
2021-05-10 6:46:15 PM  
I'm not sure whether or not I'm worried. Decades of "low inflation" have seen wages barely move while the cost of living, particular rents but also things like medical insurance, keeps going up much more quickly.

If we get wages rising faster than the other shiat, it doesn't matter what the numbers are.
 
2021-05-10 6:47:35 PM  
Consumer inflation expectations are a lagging indicator of last month's gasoline prices and very little else.

Inflation-indexed bonds pin long-run US inflation expectations to around 2.5 percent. Chart of bond-market-implied inflation expectations (frequently updated) is here:

https://fredblog.stlouisfed.org/2014/​0​4/long-run-inflation-expectations/
 
hej
2021-05-10 6:48:22 PM  
I'm just here to let the Fark economics experts Farksplain to me why inflation won't happen regardless of how much money the fed prints.
 
2021-05-10 6:50:06 PM  

adamatari: I'm not sure whether or not I'm worried. Decades of "low inflation" have seen wages barely move while the cost of living, particular rents but also things like medical insurance, keeps going up much more quickly.

If we get wages rising faster than the other shiat, it doesn't matter what the numbers are.


YOUR wages won't go up.

I'll be fine though, thanks for asking.
 
2021-05-10 6:50:59 PM  

MikeyFuccon: Consumer inflation expectations are a lagging indicator of last month's gasoline prices and very little else.

Inflation-indexed bonds pin long-run US inflation expectations to around 2.5 percent. Chart of bond-market-implied inflation expectations (frequently updated) is here:

https://fredblog.stlouisfed.org/2014/0​4/long-run-inflation-expectations/


Yeah. Because asset and commodity prices don't affect anything we buy.
 
2021-05-10 7:16:30 PM  

hej: I'm just here to let the Fark economics experts Farksplain to me why inflation won't happen regardless of how much money the fed prints.


Okay, you asked for it!

If the Fed is printing money because money demand has soared (people are cashing out of assets with any risk at all), no, inflation won't accelerate. This is what the Fed is supposed to do in a financial crisis.

If a central bank is printing money because the government can't pay its bills any other way (say, because it's losing a war and its tax collection system has broken down, or it's run through its commodity lottery winnings and has no other sources of revenue), yes, that will cause inflation, and lots of it. That's not the situation the United States faces.
 
2021-05-10 7:35:25 PM  

MikeyFuccon: If a central bank is printing money because the government can't pay its bills any other way (say, because it's losing a war and its tax collection system has broken down, or it's run through its commodity lottery winnings and has no other sources of revenue), yes, that will cause inflation, and lots of it. That's not the situation the United States faces.


We are slated to deficit spend trillions this year. Like last year, year before that..... We cannot pay our bills. It i fully financed from debt issuance and monetization of the debt. Even other nations have walked away from adding our debt. Last year with record spend, there was no real net gain on the balance sheets of other nations. It all ended up on our own. We are broke and have to print. No amount of taxation is saving us from this brewing shiatstorm.

Fark user imageView Full Size
 
2021-05-10 7:59:46 PM  
Fark user imageView Full Size
 
2021-05-10 8:30:20 PM  

hej: I'm just here to let the Fark economics experts Farksplain to me why inflation won't happen regardless of how much money the fed prints.


According to Krugman, if the fed forces interest rates to stay close to 0%, then it will stay there irrespective of money printing to a certain extent.
If they let it float, then the large increases in debt maintenance payments will force harsh austerity in terms of increased taxes, big cuts to social security, medicare, medicaid, defense, and other budget items.  This in turn will cause further economic damage in terms of unemployment (directly correlated to inflation), and pain from retirees who don't have inflation protected retirement plans.  It will likely also mean large local and state layoffs as unions sue over existing retiree benefits.  This will also trigger a global depression.  Dogs and cats living together, mass hysteria.  Also eating the goo out of my neighbors heads.
Expect the government to hold interest rates until taxes are increased on the 1% and we fully staff the IRS to collect the $700 billion the 1% are cheating every year.
If we continue to cut taxes and run jumbo budget deficits then even a 1.00% fed prime rate will force budget cuts.  Think Japan, which has been at 0% since 1987.
The other danger is austerity at close to 0%, which leads to big drops in GDP and tax revenue.
So can we please tax the 1% again, and staff the IRS?
 
2021-05-10 8:43:37 PM  

Northern: hej: I'm just here to let the Fark economics experts Farksplain to me why inflation won't happen regardless of how much money the fed prints.

According to Krugman, if the fed forces interest rates to stay close to 0%, then it will stay there irrespective of money printing to a certain extent.
If they let it float, then the large increases in debt maintenance payments will force harsh austerity in terms of increased taxes, big cuts to social security, medicare, medicaid, defense, and other budget items.  This in turn will cause further economic damage in terms of unemployment (directly correlated to inflation), and pain from retirees who don't have inflation protected retirement plans.  It will likely also mean large local and state layoffs as unions sue over existing retiree benefits.  This will also trigger a global depression.  Dogs and cats living together, mass hysteria.  Also eating the goo out of my neighbors heads.
Expect the government to hold interest rates until taxes are increased on the 1% and we fully staff the IRS to collect the $700 billion the 1% are cheating every year.
If we continue to cut taxes and run jumbo budget deficits then even a 1.00% fed prime rate will force budget cuts.  Think Japan, which has been at 0% since 1987.
The other danger is austerity at close to 0%, which leads to big drops in GDP and tax revenue.
So can we please tax the 1% again, and staff the IRS?


The problem with that theory is that our current spending is far outstripping the amount we could squeeze from the 1%. Add to that that any tax policy designed to get more money from the top would adversely affect asset prices. Almost a third of our receipts come from capital gains taxes, so the government has to be careful of how the market responds. If the stock market doesn't continue to rise basically forever, they'll have monster balance of payment issues. On the other hand, the inflation that is definitely already happening despite what various Fed officers are saying is making the bonds market skiddish. If they decide to throw another big tantrum like they did a few months ago, the stock market will dump. Big hedge funds and other institutional investors are rotating out of risk assets and finding more reasonably valued places to stuff cash, but it's still not going to be pretty. I don't know how much longer the Fed can Baghdad Bob. We are in trouble.
 
2021-05-10 9:06:03 PM  

Likwit: Fed officers are saying is making the bonds market skiddish.


That is the kicker. As they continue to print, inflation expectations will continue to go up. Causing rates to rise. The Fed will have to step in with further action, and print even more and do even more QE to combat that. It is a self-fulfilling prophecy. The more they print, rates go up, the more rates go up, the more they need to print.  Fun times ahead. There is no plan to unwind this or curtail it. 0. This doesn't stop.
 
2021-05-10 9:20:22 PM  
The flame out will be spectacular.
 
2021-05-10 10:00:57 PM  

MikeyFuccon: Consumer inflation expectations are a lagging indicator of last month's gasoline prices and very little else.

Inflation-indexed bonds pin long-run US inflation expectations to around 2.5 percent. Chart of bond-market-implied inflation expectations (frequently updated) is here:

https://fredblog.stlouisfed.org/2014/0​4/long-run-inflation-expectations/


The fed may predict 2.5% inflation all they want.  The average Joe sees gas, groceries, houses and everything else up 25% year to year.  They know what is up.
 
2021-05-10 10:28:17 PM  
I'll just leave this here.
Fark user imageView Full Size

/brrr
 
2021-05-11 2:00:17 AM  

MikeyFuccon: Consumer inflation expectations are a lagging indicator of last month's gasoline prices and very little else.


Bah.  My expectations are based on the increase in costs of the items on fast food value menus.

My measurements indicate that for the latter half of the teens, inflation was a pretty steady 6-7%, and that since the 2020 election inflation has been equal to 20% annualized.

/There were no meat tacos left on the taco bell $1 menu today
//NO MEAT TACOS, do you understand what that means?
///THE ECONOMY IS DOOOOOOOOOOOMED
 
2021-05-11 4:04:54 AM  

AsparagusFTW: MikeyFuccon: If a central bank is printing money because the government can't pay its bills any other way (say, because it's losing a war and its tax collection system has broken down, or it's run through its commodity lottery winnings and has no other sources of revenue), yes, that will cause inflation, and lots of it. That's not the situation the United States faces.

We are slated to deficit spend trillions this year. Like last year, year before that..... We cannot pay our bills. It i fully financed from debt issuance and monetization of the debt. Even other nations have walked away from adding our debt. Last year with record spend, there was no real net gain on the balance sheets of other nations. It all ended up on our own. We are broke and have to print. No amount of taxation is saving us from this brewing shiatstorm.

[Fark user image 850x592]


Dear Chicken Little: The U.S. GDP was around $20 trillion last year. If the U.S. can't borrow on that kind of economic development, who can? But if you've lost faith in the dollar, go ahead and send it to me. I'll make it work.
 
2021-05-11 6:06:17 AM  

Likwit: Northern: hej: I'm just here to let the Fark economics experts Farksplain to me why inflation won't happen regardless of how much money the fed prints.

According to Krugman, if the fed forces interest rates to stay close to 0%, then it will stay there irrespective of money printing to a certain extent.
If they let it float, then the large increases in debt maintenance payments will force harsh austerity in terms of increased taxes, big cuts to social security, medicare, medicaid, defense, and other budget items.  This in turn will cause further economic damage in terms of unemployment (directly correlated to inflation), and pain from retirees who don't have inflation protected retirement plans.  It will likely also mean large local and state layoffs as unions sue over existing retiree benefits.  This will also trigger a global depression.  Dogs and cats living together, mass hysteria.  Also eating the goo out of my neighbors heads.
Expect the government to hold interest rates until taxes are increased on the 1% and we fully staff the IRS to collect the $700 billion the 1% are cheating every year.
If we continue to cut taxes and run jumbo budget deficits then even a 1.00% fed prime rate will force budget cuts.  Think Japan, which has been at 0% since 1987.
The other danger is austerity at close to 0%, which leads to big drops in GDP and tax revenue.
So can we please tax the 1% again, and staff the IRS?

The problem with that theory is that our current spending is far outstripping the amount we could squeeze from the 1%. Add to that that any tax policy designed to get more money from the top would adversely affect asset prices. Almost a third of our receipts come from capital gains taxes, so the government has to be careful of how the market responds. If the stock market doesn't continue to rise basically forever, they'll have monster balance of payment issues. On the other hand, the inflation that is definitely already happening despite what various Fed officers are saying is making the bonds market skiddish. If they decide to throw another big tantrum like they did a few months ago, the stock market will dump. Big hedge funds and other institutional investors are rotating out of risk assets and finding more reasonably valued places to stuff cash, but it's still not going to be pretty. I don't know how much longer the Fed can Baghdad Bob. We are in trouble.


Right now the IRS can't collect some $700 billion a year.  The top 1% are not only hording assets and cash, but also setting up trust funds to provide passive income for their kids, grandkids, etc in perpetuity. Are you saying placing limits on trust funds of 10 years max (what the 99% must do for inherited IRAs and 401ks btw), and making all individual income taxed at the same tiered wage levels wouldn't substantially raise revenue?
We also need better oversight of federal spending, we can't have another endless war or F-35 project.
Single payer health care without any financial liabilities for the patients and bankruptcy reform to allow purge of all debt (even student loans), the same as the 1% by the way, would also be great.
 
2021-05-11 7:43:11 AM  

sinko swimo: media inflating fears is common as inflation and water is wet.


There must be a Democrat in the White House who wants to spend money.
 
2021-05-11 3:06:38 PM  

AsparagusFTW: MikeyFuccon: If a central bank is printing money because the government can't pay its bills any other way (say, because it's losing a war and its tax collection system has broken down, or it's run through its commodity lottery winnings and has no other sources of revenue), yes, that will cause inflation, and lots of it. That's not the situation the United States faces.

We are slated to deficit spend trillions this year. Like last year, year before that..... We cannot pay our bills. It i fully financed from debt issuance and monetization of the debt. Even other nations have walked away from adding our debt. Last year with record spend, there was no real net gain on the balance sheets of other nations. It all ended up on our own. We are broke and have to print. No amount of taxation is saving us from this brewing shiatstorm.

[Fark user image 850x592]


The US govt should be investing in bitcoins or something.

the government doesn't work like your bank account, BTW.
 
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