Monday, April 11, 2022

The Fed SF: Covid Relief Fueled Inflation

 Inflation rages across the land as prices continue to spiral with no end in sight.   The Federal Reserve Bank of San Francisco  blamed a large part of it on government spending during the pandemic in an economic letter published on March 28.  Such spending has been out of control as the money supply increased 40% over the last two years.  Dumping so much money into the economy so quickly poured gasoline on the inflation fire.  The Bank stated: 


Inflation rates in the United States and other developed economies have closely tracked each other historically. Problems with global supply chains and changes in spending patterns due to the COVID-19 pandemic have pushed up inflation worldwide. However, since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries. Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021....


before the pandemic, U.S. core CPI inflation remained, on average, about 1 percentage point above the OECD sample average. The small difference between U.S. and OECD inflation during this period is well known... By early 2021, however, U.S. inflation increasingly diverged from the other countries. U.S. core CPI grew from below 2% to above 4% and stayed elevated throughout 2021. ...


Other countries are suffering supply chain shocks but haven't gone bonkers with covid-relief spending as we did.    Consequently, they aren't suffering inflation as we are.  The current bout of inflation is what happens every time we crank up the green printing presses. 


29 comments:

Anonymous said...

Lol.

Anonymous said...

Printing money alone doesn’t cause inflation.
The rising price of goods causes inflation.
The plandemic caused some scarcity, but it had mostly recovered prior to the 2020 election.
Putting a bunch of money into the population’s hands might cause the price of goods to increase, causing inflation.
I have read on ZH that China issues orders in 2021 to buy global grain at any price. The PRC somehow anticipated global famine even before the Ukraine invasion.
Memories of cannibalism during the Great Leap Forward makes the PRC very sensitive to food security.

I will use Venezuela and Zimbabwe as examples for inflation. Their governments didn’t abnormally increase the money supply. What they dis was implemented price controls on commodity goods that became scarce. Zimbabwe’s commodities became scarce due to farm murders. Venezuela’s became scarce due to sanctions.

Anonymous said...

"However, without these spending measures, the economy might have tipped into outright deflation and slower economic growth, the consequences of which would have been harder to manage." BTW, both parties own the inflation. The massive spending started well before the pandemic and exploded under both Trump and Biden.

Anonymous said...

Demand is causing inflation. Shortages causes inflation. FOMO causes inflation.
Computer parts prices were insane in 2020 and 2021. Everyone heard about the “chip” shortages.
Now chips are plentiful and prices are falling for computer chips. That’s counter to inflation, right?
Demand for fertilizer, fuel, meat, grains, and animal feed, are the new computer chips.

Government response is usually rationing, but that only works if the majority of the population will go along with it. I don’t think people who make twilight visits to strangers carports with assault rifles, will obey rationing.

Anonymous said...

I believe the opposite of whatever a Fed crook central banker says.

Anonymous said...

printing money and using it go get shit done won’t cause much inflation since there is labor/production involved.
printing money and handing it out to people to sit around on their ass while they spend it on Amazon and food delivery due to a lockdown, will definitely cause inflation.

Anonymous said...

All that printed money, with nothing to back it up, (we're so far in debt we'll never see the light of day)makes the dollar worth less and less and thus goods and services cost more and more.

Anonymous said...

Zimbabwe’s commodities became scarce due to farm murders

Wait, what? Who murdered enough farmers to cause a famine?

Anonymous said...

A lost/stolen election and a lab grown and then released virus caused the intentional inflation. But the reality is that this goes back to the second term of Bush thru Obama. These two were the puppets to end all puppets and caused unseen damage that no one could fix.

Anonymous said...

They printed $8 trillion, gave you $1400, sent the rest to their friends, and left you with higher prices on gas, food, every day products, restaurants, basically everything you buy.

Anonymous said...

Duh! Third world countries have been trying this for decades. Look how that turned out.

Anonymous said...

@2:07 PM Inflation definition: The increase in consumer prices.

Anonymous said...

Give this left coast banker the Capt Obvious Award for the year.
Game over for this year already!

Anonymous said...

All y’all saying inflation is both parties fault seem to forget that everything from gasoline to briskets was cheaper until a few weeks after Trump left the White House. We didn’t have these problems until we got that corrupt dementia patient in the white house.

Ammo got expensive that was because of the riots. I mean the peaceful protests.

Anonymous said...

2:07 here
I meant to say “shortages cause inflation” not simply printing money.
I recently researched the rationing books of WW2. I am far too young to have ever experienced any form of rationing. Ration stamps were used to keep food prices down because commodities were redirected to the war. Without the stamp books to legally restrict access to commodities, people would pay whatever they had to get whatever they needed and that would have an inflationary effect. There was black market commodities but it was also a crime to deal in black market goods. Literature and newsreels from that era specifically name inflation caused by food shortages as an enemy of the war effort

Shortages are causing our current inflation. Shortages are caused by the sanctions. The fed is lying to keep people from panicking and hoarding again. They are also protecting Biden and the Democrats.

Anonymous said...

3:35 : It is both parties and Covid and spending started on Trumps watch. Biden made things 1000 times worse is all. But inflation was coming no matter who.....it's too bad Republicans hated Trump so much they allowed the other side to steal the election.

Anonymous said...

Congress doesnt "print money", the government doesnt "print money" at all. Only a private corporation, called the Federal Reserve with a monopoly can "print money". The Federal Reserve isnt "federal" and it has no "reserves". In fact, in the USA we have no "money". What we use "as money" is actually debt. Congress has to borrow what we call money into existence from the private banking monopoly at interest. Yes Neo...you are a slave! Another satanic "inversion". Debt isnt money, debt is the opposite of money.

Anonymous said...

The SF Fed has a firm grasp on the obvious.

Anonymous said...

@4:04
Why don’t you go use your *not money* 😆 to buy some tin foil to wrap around your “brain” to protect you from the scary conspiracy theory voices. 😂

Anonymous said...

I just want to throw this all out here as a primer for some personal research for you all.

The Great Depression was triggered by the following events happening in quick succession.

The famine caused by the Dust Bowl.
The banking collapse caused by the failed farms caused by the Dust Bowl.
The Federal Reserve shrinking the money supply in an attempt to stop the inflation they caused by allowing the easy loans used for speculative real estate and stock market investing.
Finally, the stock market collapse due to stock sell offs to cover loans.

And fear. Lots and lots of fear. The images of the Dust Bowl looked like a Biblical famine.
Remember, FDR's "We have nothing to fear, but fear itself" speech was at his inauguration in 1933. It was not a reference to Pearl Harbor.

Now we have a possible man-made global pandemic.
A possible man-made famine.
A man-made climate crisis.
Speculative real estate and investing utilizing cheap, low interest debt. And the Fed blaming inflation on printing too much money. If they try to "retract" the money supply again, then it will be Great Depression 2.

But some say they want this for the Great Reset and the Net Zero 2030 Agenda. I don't know that. I can't predict the future. I can only read the history.

Not trying to jack the thread said...

@4:04, you are correct in everything you posted, all easily proven with public information. What I was intrigued to know was how long it would take some waterhead to come along and blow your post off. Sure enough @4:43 waterhead made the scene.

There's a reason the founders pointed out that gold and silver were to be the form of money in the new country. The ignorant never ask questions as to why things are the way they are.

One more thing, Klaus Schwab has said, that the time would come when we would own nothing and be happy. The truth is, we own nothing now.

Anonymous said...

@2:42 PM
More than $8 trillion was printed and more than $1,400 was received, individually. Furthermore, stop counting the government’s money.

Anonymous said...

People should do the right thing and donate the condos in Destin and Vail they bought with the PPP money.

Anonymous said...

Inflation is not rising prices. That is a symptom. Inflation is too much money or credit chasing too few goods and services. Rising prices result. The only corrective action is demand destruction or reduction in money supply or credit. That’s why you often hear the axiom, “The best solution for high prices…..is high prices.” Consumers stop buying, demand falls, and eventually prices fall. And for those interested in reading about The Depression, “The Forgotten Man” by Amity Shlaes is a good read.

Who Knows Jack Or Doesn't said...

Some of us have mastered the art of selecting the perfect flat rock and skipping it across a pond at EIGHT bounces.

Most of us have memorized at least six passwords and can log on and off a computer several times a day without buzzing someone for help.

All of us have noticed we have put the feet of men on the surface of the moon.

Not a damned one of us can figure out the economy, what makes it work, why it's broken, how to fix it, who to blame, the road we should have taken instead, instead of what or what's coming next.

Krusatyr said...

Biden crippled peteoleum industry 1st day in office, inflation took root because all products are subject to transport, so cost more at point of sale. Then Biden gave each $1,400 and extended unemployment, causing millions to stay home, thence employers, having fewer employees, paid more for labor.

Biden committed diplomatic suicide in Afghanistan making America look foolish & weak. Biden shut down our pipeline but let Putin have his. Putin, like a cat watching a brain dead three legged mouse, pounced, knowing Biden lacked the brains and balls to stop him.

Ukraine was an important grain producer/exporter until they were attacked, now all manner of grain shortages has usurped both grain markets and meat markets.

Biden is a money printing leftist inflationary economic catastrophe on steroids 24/7. And he was stupid before his brain rotted.

Anonymous said...

A trillion here, a trillion there, and pretty soon we are talking real money.

Macy said...

@6:52. Major gold star for the Amity Shales shout out!

Anonymous said...

@6:52 PM
Well actually, I’ve never heard this axiom. If I hadn’t heard it, no one has.
TRANSLATION: Um, no.


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