Justin2010 said:

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pic.twitter.com/CJP5Zwimwa

— Tyler Zed (@realTylerZed) July 13, 2022

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I remember 1980. 13% fixed on my mortgage and 18% interest being paid in my money market account. And 113 degrees in Allen.

BusterAg said:

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aggrad02 said:

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BusterAg said:

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aggrad02 said:

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You mean "just as worse" as Obama and Bush W.

Everything else you said, I've already said. You just have a different opinion of Trumps part in.

And once again, price increases are not instantaneous with monetary increases. 3.9 Trillion in 2020 was going to and did cause inflation.

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What percentage do you think?

Of the 20% real inflation we have today, how much would prices have increased if the 2021 deficit was lower than GDP growth?

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My guess would be around 16% (2% more to Bidens policies and 2% more to Energy prices, hang that on a combo Biden/War.

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This is absolutely absurd. To assume that changes to the money supply in 2019 can not have any impact on inflation until 2022 is ridiculous.

In fact, you can predict inflation almost perfectly by taking the size of M2 for any given year compare it to the GDP for that exact year, and predict the inflation for that specific year.

People that don't believe that there is no link between M2 and inflation believe Modern Monetary Theory, and they have been proven wrong.

People that believe that changes to M2 in 2018 won't influence inflation until 2022 post on Texags under aggrad02, and have a total universe of 1 person.

Here is an article that talks a bit about this subject. I would love to hear why you think you are right, and Steve Hank is wrong. Furthermore, I would love to hear why you think that the quantitative theory of money held for so well (except for when we were in lockdowns) in the past, but is somehow wrong when it comes to predicting 2022 inflation.

https://www.wsj.com/articles/powell-printing-money-supply-m2-raises-prices-level-inflation-demand-prediction-wage-stagnation-stagflation-federal-reserve-monetary-policy-11645630424#:~:text=The%20money%20supply%20as%20measured,rate%20of%2012.6%25%20a%20year.

What I think you did is picked a number that grew in Trump's admin, and tried to pin Biden's inflation on that number. By focusing on M2 growth in 2020, and ignoring the proportion of that growth compared to the economy, and the crazy fiscal policies of this administration, you are quite clearly showing that you are cherry picking.

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First your dates are off again. M2 growth that is affecting inflation now is from 2020 not as much from 2018.

What is absurd is believing that 3.9T in M2 growth only caused inflation of 5% in 2021. While 1.3T M2 growth in 2021 is causing 9.1% in 2022.

What is absurd is not understanding that there is a lag between monetary growth and price increases.

Also saying that I think there is no connection between monetary growth and price levels is absurd, when that's what I've been stating this whole thread and is either dishonest, or you lack reading comprehension skills.

Look at this chart of M2.

https://fred.stlouisfed.org/series/WM2NS

A child can tell you what is causing this inflation looking at this chart.

Btw: I read the article and agree with it. Look at the chart in your article. Look at the predicted vs actual inflation. The actual inflation is off by one year I'm 2020 through 2022 just like I said vs predicted inflation.

Also the quantity theory formula takes into account not only M2 but the velocity of money. Do you think we had much velocity in 2020 or the first 2/3 of 2021? No, not we fully opened back up until the last 3rd of 2021 which is why a high M2 in 2020 did not lead to higher inflation In 2021 but is screwing is now.

The Fed can increase M2 by filling a hole in the ground with 1 trillion and it won't do squat to price levels. It's not until it starts circulating that it has an impact on prices.

And you also have no idea what modern monetary theory is. I'm not defending the democrats use of it. But it is not a predictor of inflation like the quantity theory of money.

It's a fiscal policy theory and all it says is that countries who print their own currency are not limited to their budgets for spending. It clearly states that inflation is a danger.

There is a difference between monetary policy controlled by the central bank, and fiscal policy controlled by congress and the president. MMT concerns the second.

" MMT says that governments create new money by using fiscal policy and that the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector."

When you hear people say that MMT has been proven false, what they mean is that the economist who say that based on MMT we can spend and not inflate are wrong. Their analysis is wrong, not the macro/underpinnings of the theory.


Also another thing you don't understand and haven't comprehended is that the quantity theory of money takes into account in its equation "the quantity of M2" not the "growth" of M2, so yes 100 % does the 3.9T added in 2020 affect inflation this year as it is part of this years "total" M2.

Manhattan said:

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If a rancher needs a truck, or the processor needs a machine, or the distributor needs a PLC controlled conveyor belt, or HEB needs a refrigerator then yeah, chips and other industrial components will raise the price of bacon.

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A corporate ranch needing a replacement PLC is not doubling the price of bacon. That is absolutely absurd.

So if inflation is going up and the Fed raises interest rates then when will my bank offer me a 5% interest rate to encourage saving?

Quote:

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Also the quantity theory formula takes into account not only M2 but the velocity of money. Do you think we had much velocity in 2020 or the first 2/3 of 2021? No, not we fully opened back up until the last 3rd of 2021 which is why a high M2 in 2020 did not lead to higher inflation In 2021 but is screwing is now.

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So, what you are saying is, that printing money during COVID didn't hurt so much because of the low velocity. But following those same policies during an economic recovery was devastating.

Let's say that, after COVID, the FED had raised rates significantly, started selling off all of its assets significantly, and greatly reduced the money supply going into the economic recovery.

What would have happened to inflation? What if, in 2021, M2 would have been reduced significantly. Could you have possibly reduced 2022 inflation significantly?

MV=Pr.

When V is low, and M is high, not so bad.
When V is high, and you significantly reduce M, not so bad.
When V is high, and you significantly increase V, catastrophe.

Second, Modern Monetary Theory has "Money" in it's name. Funny that you think it is only a fiscal theory. If so, I would think they would have named it something like Modern Fiscal Inflation Theory. It does have ramifications on fiscal policy, but if you talk about the money supply, it includes monetary theory.

https://www.investopedia.com/terms/m/monetary_theory.asp

Bondag said:

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So if inflation is going up and the Fed raises interest rates then when will my bank offer me a 5% interest rate to encourage saving?

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I am going to say no. Big Banks own the Fed and are protected by it. Savings don't drive a consumption / debt based economy.

PPI is out at 11.3%

Wholesale prices shoot up near-record 11.3% in June on surge in energy costs
PUBLISHED THU, JUL 14 20228:51 AM EDTUPDATED 12 MIN AGO

• The producer price index rose 11.3% from a year ago in June, near the record 11.6% posted in March.
• Excluding food, energy and trade, core PPI was up 6.4%. The monthly gain of 0.3% was below expectations.
• Jobless claims jumped to 244,000 last week, the highest level since November 2021.

LMCane said:

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Wholesale prices shoot up near-record 11.3% in June on surge in energy costs
PUBLISHED THU, JUL 14 20228:51 AM EDTUPDATED 12 MIN AGO

• The producer price index rose 11.3% from a year ago in June, near the record 11.6% posted in March.
• Excluding food, energy and trade, core PPI was up 6.4%. The monthly gain of 0.3% was below expectations.
• Jobless claims jumped to 244,000 last week, the highest level since November 2021.

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Proof that Biden's Economic Policy is working.

Austrian economists and conservatives are dumbasses.

BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

BusterAg said:

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BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

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First of all, energy like all other goods and services rises in price with inflation naturally due to increased demand, then fuels additional inflation in other goods as it underpins our economy. So there is the cost of energy that has risen due to monetary expansion and increased demand, and then there is the cost of energy that has risen due to supply shocks and speculation due to Russia/Ukraine.

Of course Trump isn't responsible for Ukraine/Putin.

But look around and use common sense, do you think energy prices are causing a 4.5% increase in prices (or double that if you are calculation inflation the old way)? Is energy causing a shortage of processing chips? Is energy causing a shortage of Truckers? Are wage increases due to energy? The company my wife works for can't get the medical devices and supplies she sales from China because they are behind on production, and have had to raise prices 4 times in the last year and it's not due to electricity and shipping cost. Food has been increasing in price for a year, that has nothing to do with energy. Housing is up, but it's not because people are diving further to get home.

Another factor you are not considering in your inflation analysis is inflation expectation. Yellen and Powell's job is to manage inflation expectation, so no I don't trust her. She is one of the ones that has gotten us in this mess. But that doesn't absolve Trump either, he is also one of the main ones who has gotten us in this mess.

aggrad02 said:

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BusterAg said:

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BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

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First of all, energy like all other goods and services rises in price with inflation naturally due to increased demand, then fuels additional inflation in other goods as it underpins our economy. So there is the cost of energy that has risen due to monetary expansion and increased demand, and then there is the cost of energy that has risen due to supply shocks and speculation due to Russia/Ukraine.

Of course Trump isn't responsible for Ukraine/Putin.

But look around and use common sense, do you think energy prices are causing a 4.5% increase in prices (or double that if you are calculation inflation the old way)? Is energy causing a shortage of processing chips? Is energy causing a shortage of Truckers? Are wage increases due to energy? The company my wife works for can't get the medical devices and supplies she sales from China because they are behind on production, and have had to raise prices 4 times in the last year and it's not due to electricity and shipping cost. Food has been increasing in price for a year, that has nothing to do with energy. Housing is up, but it's not because people are diving further to get home.

Another factor you are not considering in your inflation analysis is inflation expectation. Yellen and Powell's job is to manage inflation expectation, so no I don't trust her. She is one of the ones that has gotten us in this mess. But that doesn't absolve Trump either, he is also one of the main ones who has gotten us in this mess.

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Oil production in the US is down 10% since Jan 2020. That's not Putin. Its Biden, period!

BusterAg said:

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Quote:

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Also the quantity theory formula takes into account not only M2 but the velocity of money. Do you think we had much velocity in 2020 or the first 2/3 of 2021? No, not we fully opened back up until the last 3rd of 2021 which is why a high M2 in 2020 did not lead to higher inflation In 2021 but is screwing is now.

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So, what you are saying is, that printing money during COVID didn't hurt so much because of the low velocity. But following those same policies during an economic recovery was devastating.

Let's say that, after COVID, the FED had raised rates significantly, started selling off all of its assets significantly, and greatly reduced the money supply going into the economic recovery.

What would have happened to inflation? What if, in 2021, M2 would have been reduced significantly. Could you have possibly reduced 2022 inflation significantly?

MV=Pr.

When V is low, and M is high, not so bad.
When V is high, and you significantly reduce M, not so bad.
When V is high, and you significantly increase V, catastrophe.

Second, Modern Monetary Theory has "Money" in it's name. Funny that you think it is only a fiscal theory. If so, I would think they would have named it something like Modern Fiscal Inflation Theory. It does have ramifications on fiscal policy, but if you talk about the money supply, it includes monetary theory.

https://www.investopedia.com/terms/m/monetary_theory.asp

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What I'm saying is that extremely massive M2 growth under Trump is fueling a lot of this inflation. It was a ticking time bomb and it's exploding. Trump and Powell knew that velocity was down from the pandemic and would pick back up eventually.

You can try to get cute and say well Trump appointee Powell could have just taken that 3.9T off the table in 2021. That's ludicrous and you know it. Our economy would have ground to halt worse than the Great Depression with interest rates through the roof. That's not how any central bank ever has ridden out monetary growth and inflation.

What they will do it raise rates and ride it out while inflation eats away at the wealth and earning capacity of the middle class and the savings class while talking out the side of their mouth.

As to MMT, I didn't name it, take it up with the namers. If you want to criticize it, fine it deserves it, and the people on the hill that advocate it as a reason to spend definitely deserve ridicule but understand what it is first.

aggrad02 said:

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BusterAg said:

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BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

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First of all, energy like all other goods and services rises in price with inflation naturally due to increased demand, then fuels additional inflation in other goods as it underpins our economy. So there is the cost of energy that has risen due to monetary expansion and increased demand, and then there is the cost of energy that has risen due to supply shocks and speculation due to Russia/Ukraine.

Of course Trump isn't responsible for Ukraine/Putin.

But look around and use common sense, do you think energy prices are causing a 4.5% increase in prices (or double that if you are calculation inflation the old way)? Quite possibly. I know for all things Ag, energy prices are a significant part of the inflation. Tractors and trucks need diesel. Not related to the COVID M2 glut.

Is energy causing a shortage of processing chips? No, but neither is the COVID M2 glut.

Is energy causing a shortage of Truckers? Not related to the COVID M2 glut.

Are wage increases due to energy? Not directly

The company my wife works for can't get the medical devices and supplies she sales from China because they are behind on production, and have had to raise prices 4 times in the last year and it's not due to electricity and shipping cost. Not related to the COVID M2 glut.

Food has been increasing in price for a year, that has nothing to do with energy. Yes it does. Meat also has a packing plant problem, but other than that, it's primarily energy.

Housing is up, but it's not because people are diving further to get home. Related to M2 glut. Foreign companies looking to park cash in assets.

Another factor you are not considering in your inflation analysis is inflation expectation. Yellen and Powell's job is to manage inflation expectation, so no I don't trust her. She is one of the ones that has gotten us in this mess. But that doesn't absolve Trump either, he is also one of the main ones who has gotten us in this mess. Inflation expectation is driven by fear of the Biden administration's fiscal and monetary policies, not Trump's.

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Nice pivot. You are well short of your 16%.

Marcus Brutus said:

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aggrad02 said:

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BusterAg said:

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BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

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First of all, energy like all other goods and services rises in price with inflation naturally due to increased demand, then fuels additional inflation in other goods as it underpins our economy. So there is the cost of energy that has risen due to monetary expansion and increased demand, and then there is the cost of energy that has risen due to supply shocks and speculation due to Russia/Ukraine.

Of course Trump isn't responsible for Ukraine/Putin.

But look around and use common sense, do you think energy prices are causing a 4.5% increase in prices (or double that if you are calculation inflation the old way)? Is energy causing a shortage of processing chips? Is energy causing a shortage of Truckers? Are wage increases due to energy? The company my wife works for can't get the medical devices and supplies she sales from China because they are behind on production, and have had to raise prices 4 times in the last year and it's not due to electricity and shipping cost. Food has been increasing in price for a year, that has nothing to do with energy. Housing is up, but it's not because people are diving further to get home.

Another factor you are not considering in your inflation analysis is inflation expectation. Yellen and Powell's job is to manage inflation expectation, so no I don't trust her. She is one of the ones that has gotten us in this mess. But that doesn't absolve Trump either, he is also one of the main ones who has gotten us in this mess.

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Oil production in the US is down 10% since Jan 2020. That's not Putin. Its Biden, period!

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You mean Covid shut downs under Trump? It's been rising steadily ever since and at the same pace as when under Trump, but I doubt you were in the oil patch in the Summer of 2020 and saw what happened. I was there.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

BusterAg said:

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aggrad02 said:

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BusterAg said:

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BTW, Yellen says 50% of latest inflation numbers are high energy costs.

I don't know how that could be wrong.

https://www.cnbc.com/2022/07/14/yellen-warns-inflation-in-the-us-is-unacceptably-high.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

Do you disagree? Is Trump responsible for the high energy prices?

---

First of all, energy like all other goods and services rises in price with inflation naturally due to increased demand, then fuels additional inflation in other goods as it underpins our economy. So there is the cost of energy that has risen due to monetary expansion and increased demand, and then there is the cost of energy that has risen due to supply shocks and speculation due to Russia/Ukraine.

Of course Trump isn't responsible for Ukraine/Putin.

But look around and use common sense, do you think energy prices are causing a 4.5% increase in prices (or double that if you are calculation inflation the old way)? Quite possibly. I know for all things Ag, energy prices are a significant part of the inflation. Tractors and trucks need diesel. Not related to the COVID M2 glut.

Is energy causing a shortage of processing chips? No, but neither is the COVID M2 glut.

Is energy causing a shortage of Truckers? Not related to the COVID M2 glut.

Are wage increases due to energy? Not directly

The company my wife works for can't get the medical devices and supplies she sales from China because they are behind on production, and have had to raise prices 4 times in the last year and it's not due to electricity and shipping cost. Not related to the COVID M2 glut.

Food has been increasing in price for a year, that has nothing to do with energy. Yes it does. Meat also has a packing plant problem, but other than that, it's primarily energy.

Housing is up, but it's not because people are diving further to get home. Related to M2 glut. Foreign companies looking to park cash in assets.

Another factor you are not considering in your inflation analysis is inflation expectation. Yellen and Powell's job is to manage inflation expectation, so no I don't trust her. She is one of the ones that has gotten us in this mess. But that doesn't absolve Trump either, he is also one of the main ones who has gotten us in this mess. Inflation expectation is driven by fear of the Biden administration's fiscal and monetary policies, not Trump's.

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Nice pivot. You are well short of your 16%.

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Dude you don't understand and it's cool. I can't keep tying things together for you.

aggrad02 said:

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You can try to get cute and say well Trump appointee Powell could have just taken that 3.9T off the table in 2021. That's ludicrous and you know it. Our economy would have ground to halt worse than the Great Depression with interest rates through the roof. That's not how any central bank ever has ridden out monetary growth and inflation.

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Theoretically, they could. The Fed's balance sheet is almost $9 trillion.

More realistically, they could easily take out enough to reduce M2 to levels that would reduce the current inflation to something much more manageable. Keep up with growths of the GDP with reductions in the money supply. Make the job market a little less tight.

But they didn't. The Fed added money to their balance sheet, continuing QE, pouring fuel on the fire.

What was stopping the Fed from doing significant quantitative tightening? Bad economics, not Trump.