“...could return...”? Misery index is climbing quickly. And the lemmings seem just fine with it. 😕
Given the huge monetization of debt and the rapid increase (about 75%) in money supply in 2020, it can be expected that inflation will pick up in the coming quarters.
How will a left-wing government likely respond to this? The classic way is to impose price controls to shift the blame from the politicians and the central bankers who created the inflation to the “greedy businessmen” who are raising prices.
When inflation picks up, there will likely be a call for price controls, probably through executive decrees rather than legislation, at least at first. When there are price controls and prices are set below market levels, there will be shortages. BRACE YOURSELVES FOR THIS. It’s Jimmy Carter all over again. I hope Carter will still be alive to see his administration’s policies replayed in its full glory.
Until the store shelves go empty.
https://www.federalreserve.gov/releases/g17/current/
https://ycharts.com/indicators/us_industrial_production_index_yoy
You can print all the stimulus checks you want, and it may even be really popular for some, but in the end money “is an abstract concept that represents human time.”
If production drops in manufacturing, and the service sector shrinks, even transportation and the production of some resources goes down - YOU END UP WITH A LOT OF MONEY/DEMAND CHASING A LIMITED SUPPLY = inflation.
Once reality kicks in and you have inflation and supply shortages, people won’t be so happy anymore. Especially when they want to buy a home or a car. But there’s a bit of a delay reaction. What is critical is that the supply disruptions are short lived. If the government keeps screwing with things because they want to play politics using a virus where nothing they did had any actual impact except the rapid development of a vaccine, they will cause some serious issues in the not so distant future economically for this nation.