Posted on 12/08/2022 12:52:09 PM PST by Oldeconomybuyer
(Reuters) - Globally, people are experiencing inflation at levels not seen for decades as prices surge for essentials like food, heating, transport and accommodation. And though a peak could be in sight, the effects may yet get worse.
How did we get here? In two words: pandemic and war.
A long and comfortable period of scant inflation and low interest rates ended abruptly after COVID-19 struck, as governments and central banks kept locked-down businesses and households afloat with trillions of dollars of support.
That lifeline kept workers from joining dole queues, businesses from going broke and house prices from crashing. But it also knocked supply and demand out of kilter as never before.
By 2021, as lockdowns ended and the global economy grew at its fastest post-recession pace in 80 years, all that stimulus money overwhelmed the world's trading system.
Factories that had been idled could not ratchet up fast enough to meet demand, COVID-safe rules caused labour shortages in retail, transport and healthcare, and the recovery boom caused a spike in energy prices.
If that wasn't enough, Russia invaded Ukraine in February and Western sanctions on the major oil and gas exporter sent fuel prices yet higher.
(Excerpt) Read more at news.yahoo.com ...
- Milton Friedman
The Fed will do anything to deflect blame.
‘Everything is Fine’
https://www.youtube.com/watch?v=fh9y6aaVyas
Supply and demand has absolutely nothing to do with monetary inflation. Give them an “A” for effort, I suppose.
The pandemic just sped up the timeline.
I’ve found that nowadays I have to specify “price inflation”. i.e. more dollars chasing less goods. When you print like a fiend, prices are gonna go up.
Nope, it was overspending and Biden's energy policies.
THAT is the real answer
Everyone forgets the prices jumped AFTER. Biden signed the EOs strangling the oil industry in the US
Many friends who retired in the last 5 years are either back to work or looking. The ones who are too old or have health issues keeping them from work I really feel sorry for. They are screwed.
“How did we get here? In two words: pandemic and war. “
WEF and the Green New Deal.
can't count on my 401K to make up for inflation....
I know people are making tremendous money out there...Costco worker told me she makes over $26/hr...a basic cash register clerk....
Retirees are going to get royally screwed.
The sharply rising cost of daily necessities is squeezing what little disposable income they once had. Soon there will be no disposable income.
The economic ugliness is just getting started.
Exactly, people can adjust for a month or two of crazy high unexpected rise in expenses, but not two years.
0% interest rates for 3 presidential terms.
we are in the fixed income group after working many decades.....
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There are some income generating options out there but they generally come at a higher risk than most retirees should be taking on. Unfortunately some are succumbing to “yield chasing” which can have disastrous results.
1OldPro said: Nope, it was overspending and Biden’s energy policies.
True but rising housing prices was one of the main drivers to rising inflation we are experiencing. Economist said mortgage rates should have been brought up small incremental amounts over the last 5-8 years to lessen the shock.
House prices going up 15-30% every year due to artificially low mortgage rates drove up inflation. Buying a home for 250k and selling it a few years later for 450k was insane.
Too low mortgage rates is just as bad as too high mortgage rates. There is a fine line that needs to be kept. Same as eating too much or too little.
I think a lot of people are underestimating the long term effects of inflation and/or felt that inflation was only transitory. They are going to very surprised at how devastating it can be.
One thing people can do to help themselves is pay off all those credit cards with ridiculously onerous rates. They should ask themselves why stores are always trying to get people to open new cards.
That's partly due to historic low housing stock, builders couldn't get workers and no supplies from Biden's supply chain crisis and then hurt by the high cost of commodity prices like wood and other building materials.
The two words are democRats and government.
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