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Nov 17, 2021
4:22:39pm
grosven All-American
Inflation everything is certainly the boogey man front and center right now
i.e., what the financial news media is presenting today. In all of the analysis and fear-mongering most do not talk about the following:

1) Supply Chain Issues are Hugely Infationary - These are starting to get resolved in some measure, this will lessen some of the pressure is my worthless opinion

2) Yes, there is an Increase in Demand which is inflationary - BUT. I don't see anyone talk about household debt being at all time lows, it's amazing the bold steps and risks people will take if they have spending power. They feel rich so they spend. We are a consumer driven economy. At some point, this will revert, AND with it, inflation will abate is my worthless opinion

3) High indebtedness is deflationary- You implied the same, as there is no way for the Fed to raise rates, as capital must be allocated to service debts. This puts pressure on prices. Look at Japan, look at Europe, the US seems fiscally responsible in comparison (maybe until last year). Japan just increased quantitative easing measures, and they will never stop, still prices don't increase.

4) Technological Disruption is deflationary - The pace of innovation has increased due to easy access to capital and this whole Internet thing really may just be under appreciated even still. Example, Google disrupting newspapers (with unfortunate consequences like clickbait). Robots replacing jobs.

5) Aging Population is deflationary - Fewer workers less economic output that puts pressure on prices.

6) Globalization is deflationary - We can get work done from basically anywhere, and labor availability in cities is not as crucial, we're still in the beginning stages of this.
grosven
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grosven
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