Ergo, the Russians launching the war in Ukraine significantly contributes to inflation.
Is it solely responsible? Of course not. Does it contribute? Oh most definitely.
Ergo, the Russians launching the war in Ukraine significantly contributes to inflation.
Is it solely responsible? Of course not. Does it contribute? Oh most definitely.
I see this sentiment a lot here, but it's really unclear what the WhiteHouse can do about it. Maybe they should take Gerald Ford's lead and start printing up "Whip Inflation Now!" buttons? Maybe you want a wage and price freeze à la Richard Nixon? The Federal Reserve is where your ire should be aimed. They left rates way too low for way too long kicking the can down the road and now the next kick of the can could reveal it to be a bomb. The way to deal with inflation is the way Paul Volcker dealt with it in 1980: raise interest rates significantly - not these piddly 1/4% raises.
https://qz.com/2139399/surging-nickel-prices-are-bad-news-fo...
Also, the fuel processed from the pipeline is chiefly an export, so it wouldn't have affected prices in the USA.
Lastly, the XL pipeline was a huge risk to the American agriculture industry. There was opposition to it it on the right, particularly from ranchers in the region. Do you really think it's wise to put the beef and wheat industries in the north at risk just so refineries can sell oil overseas at a slightly lower cost?
Oil is (mostly) fungible. An export from Canada is additional capacity that doesn't compete for American oil that can stay in America.
Then sit back and wait as it blows over. It's already blowing over, prices are stabilizing. Month over month 0.3% increase in CPI is 3.6% annualized inflation.
Much of this is outside of the purview of the US president. These are areas where the private sector has to take the lead. AFAICT there have been efforts to increase domestic manufacturing of semiconductors - Intel is taking a big lead here, but it's going to take at least a couple of years (probably closer to 3 or 4) to get these new fabs online. There's not much a US president can do about that. And much of what he could/can do is limited by congress passing laws.
> The Fed's contribution is small.
It's not. ZIRP has had a huge impact on this inflation and fueled lots of market speculation both in housing and the stock market (not to mention crypto). With interest rates closer to their historical mean this speculation wouldn't have happened.
There aren’t really “historical average” interest rates, they’ve been going down continuously for like 40 years.
Crypto is the same kind of speculation that drew folks to beanie babies. The entire crypto world market cap is like 2/3 of apple, it’s really not a big thing.
> they’ve been going down continuously for like 40 years.
Cycles. They go down... they go up.
I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation.
> Japan housing CPI being dead flat with similar interest rate policies
Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation.
They do but the cardinal directionality has been down and to the right.
> Japan has an aging, declining population with essentially no immigration. Of course their housing prices have been essentially flat, they're experiencing a decline in household formation.
Totally! What you're describing there is the equilibrium of supply and demand. In their case, demand went down. In our case, demand is going up and we're refusing to add supply. It's the same thing. Or at least, two sides of the same coin. We're both arguing that housing prices are fundamentally - primarily - driven by supply and demand of housing, not supply of money.
> I don't disagree about zoning playing a part, but again, this is something the US President has little control over. Yes, he should probably be using the bully pulpit to support building more affordable housing, but it's not something that's going to result in a quick reduction of inflation.
This is where we disagree! We should federalize zoning rules yesterday. The federal government has the right to do this, for instance Chicago residents ability to install satellite dishes is already governed by federal law. [1] Time to stop obstructionist city councils from the top and maximize the freedom of individuals to build housing as they see fit.
[1] https://www.chicagotribune.com/news/ct-xpm-2005-03-06-050306...
You expected that to last forever?
> driven by supply and demand of housing, not supply of money.
Yes, it's driven by supply and demand, but easy money means more demand than there would be with higher interest rates and tighter monetary policy.
> We should federalize zoning rules yesterday. The federal government has the right to do this, for instance Chicago residents ability to install satellite dishes
I suspect this Chicago instance has more to do with FCC than anything else. Federalizing zoning would likely be an uphill battle that would go to the SCOTUS and I'm going to guess with the current composition they won't look favorably on that.
And yes I see little appetite for federalizing zoning however it’s both an option with precedent and would actually help unlikely raising interest rates :)
Removing house finance interest tax deduction would help reduce speculation and reduce prices.
https://www.brown.edu/news/2021-09-01/costsofwar
'... 20 years of post-9/11 wars have cost the U.S. an estimated $8 trillion and have killed more than 900,000 people. '
Western USA has large land tracts owned by federal forest service and BLM. Maybe you could advocate for feds changing their zoning to allow house building?
I already advocate for zoning reform at all levels including federalizing the zoning rules to preclude obstinate city councils from banning the desperately needed development within towns.
Large tracts of forest are kind of useless if your job is in a city and the city council won't let you build a house to live near it lol. "If you want houses so bad why don't you build them in a forest well away from anything" is among the worst arguments I've ever heard.
All the tax cuts that give real estate advantages over other investments have arguably more to do with it. People don't leverage 5x their net worth into a single asset in a single location that produces nothing but for housing that's the norm.
Real estate produces something very valuable, and if you can't understand that try living homeless for a few months .. its the only way without a house you will get to be near amenities ¯\_(ツ)_/¯
In financial terms it produces rent or saving of paying rent.
edit: my bad 3.66% my calculator rounded to 4.
The market is pricing in a 87% chance the next hike is 50 bps, and a roughly 95% chance of the rate being at least 2.25-2.5% by the end of the year.
https://www.cmegroup.com/trading/interest-rates/countdown-to...
The market isnt always right, and even a series of back to back 50 bp hikes might not be enough. We'll see.
The best case I see is that they raise rates by 1-2 pct and accept a few years of elevated inflation followed by a gradual normalization towards a long term mean. I really don't believe hyperinflation is a big risk.
That’s the point: raise interest rates until they cause a recession, that suppresses demand and so kills inflation.
The Federal Reserve Bank’s job to control inflation (and unemployment)
Nitpick: it was still February in Ukraine.
Source: https://www.bls.gov/regions/mid-atlantic/data/consumerpricei...
I agree the oil market is in backwardation, but this is retrospective CPI, not December 2023 CPI.
[edit] Check out the graph on page 7 (11th page in the PDF) [1] It shows you just how little global central bank balance sheets are in terms of the market. It's less than 8.9% of global financial assets, and while it increased a lot recently (for obvious reasons) on average over the last 20 years it's not super dramatic.
[1] https://www.fsb.org/wp-content/uploads/P161221.pdf
[2] https://unctad.org/news/shipping-during-covid-19-why-contain...
[3] https://www.wsj.com/articles/container-ship-backup-at-southe...
[4] https://asia.nikkei.com/Business/Tech/Semiconductors/Chip-pr...
[5] https://www.cnbc.com/2022/04/11/china-covid-outbreak-guangzh...
[6] https://www.cbsnews.com/news/long-covid-labor-market-missing...
But it's ignoring something much simpler: if you print more money, you're directly obfuscating supply and demand by devaluing your currency. The notion that it's not money printing because it's held by financial institutions is as credible as trickle-down economics. There's still more money in the system, and that system is purposefully using the extra cash to prop up the stock market. You know what the best hedge against unsustainable debt is? Devaluing the currency.
Yes, I am making some simplifications. If you really want to get into the details of quantitative easing in the US we can, but honestly it's just noise. You can't escape the concept of supply and demand no matter how opaque your policies are. The M2 money supply has had an enormous increase in just the past few years.
https://fred.stlouisfed.org/series/WM2NS
I admit I have not had a chance to look at all your links as of writing this comment.
[edit] Concrete example: if I print money to build a new port, and that new port leads to a decrease in shipping costs? Then prices go down, meaning each dollar is worth more than before I increased the supply. New money is an investment. It's the liability side of the books. The asset side of the books (what we got for it) matters too!
So yes, you're right. How you use the money matters. But the US government isn't using it to help consumers, it's using it to help corporations.
I did not articulate this in my original comment, and concede you're (mostly) right. I maintain that "the money printer goes brrrr" is the main issue in the US, but admittedly I'm not providing as much data as you and your arguments aren't bad.
I also think that these issues are transient, and caused by a very poor transition out of COVID lockdowns and into normalcy. It's taking longer than I thought to resolve, but I do think that not taking too much dramatic action and letting the market sort it out is the path forward.
I think the amplification of these issues is transient, but that the overall trend is still up. I believe CPI will come down again soon, but then start to trend up again without drastic measures from The Fed (much more than raising rates by 25 basis points a few times a year like they're currently discussing).
The world economy is complicated though. Nobody was predicting covid a few years ago. Not many people were predicting a war last year. Who knows what crazy wrench reality will throw in the system soon.
Basically, Japan's public-sector debt growth is offsetting private-sector debt shrinkage.
This dynamic is unique to Japan.
This is where the argument breaks down in my view. You cannot effectively centrally plan an economy. Granting these special favors for pet projects creates malign incentives. Those who are closest to the money spigot benefit disproportionally as compared to those who receive the newly printed money later. See also: Richard Cantillon.
The decentralized market price discovery mechanism is disrupted by the malign incentives created by the money printers. Even if central planners could acquire enough information to effectively plan an economy, the problem of corruption and malign incentives remains.
That said, central planners cannot effectively out-compete the decentralized price discovery mechanism of a generally unhampered market. They are limited and fallible bureaucrats, where the market participants are legion. Institutional group-think is yet another obstacle.
Finally, even if you could conclude that your centrally planned port was not a bad investment, can you measure the cost of lost innovation? The opportunities not taken by the market because capital was misallocated by central planners for a port?
Only if that new port resulted in value added equal to the money printed. If the port only adds, say, half the value it's going to lead to inflation.
If you just print a bunch of money to give to unemployed people, it's going to lead to inflation.
Wanna guess how many people actually get caught for that? I guess we'll find out in a year or two. I'm guessing almost none.
Is this even a logical proposition? If people save $100 dollars, what's wrong with adding $100 dollars to the economy, assuming no price controls like the massively distorting zero lower bound that artificially keeps interest rates from entering negative territory to signal overabundance of capital. This artificial price control forces all capital to be utilized at capacity (endless growth fallacy) or destroyed (broken window fallacy) to reduce the abundance of capital.
After all, if every product has a price at which it is guaranteed to be sold, there is going to be an interest rate that guarantees that capital will be accepted by someone even if that interest rate is negative.
Imagine if you produced trash that costs $10 to dispose of, or in other words, the price of that trash is -$10 but then the government stepped in and guaranteed to buy that trash for $0. Suddenly a lot of people will keep producing more trash.
>There's still more money in the system, and that system is purposefully using the extra cash to prop up the stock market.
That's what happens when you disable market signals like negative interest rates. Since you have obligated yourself to buy the trash your economy slowly turns into a bigger and bigger trash heap. Before you say nonsense like negative interest rates prop up the stock market, think about how a reduction in the money supply is supposed to prop the stock market up, it's completely illogical.
>You know what the best hedge against unsustainable debt is? Devaluing the currency.
No, the best solution against unsustainable debt is to tell the owners of financial capital that they have accumulated financial assets beyond your desire to be in debt, i.e. the interest rate that you would consent to is not positive anymore. As it stands right now. That market signal is completely dead. There is nothing in this market that can say "I've had enough of the debt nonsense, I do not want further debt, I will not accept further debt" as a 0% interest rate allows people to keep saving more and more endlessly which means others must be more and more in debt unless they want a recession or depression and lose their job.
When you think about it, all these rich savers are just lying to themselves by saving beyond the desire of society to let them save which is obviously going to lead to inflation. After all, you have these tokens and no meaningful agreement on the other side that they are worth anything, you just forced that obligation upon them but that doesn't mean they will actually fulfill it, it's not like they agreed to do that. The interest rate that they would agree to isn't positive.
The problem is they start to spend it (especially if inflation mindset takes hold in popular culture). Here's the velocity of M2 money
https://fred.stlouisfed.org/series/M2V
What happens if that reverts to the mean, like many things do over the long run?
Why not? Fload the economy with dollars and people will demand goods. This increased demand will affect shipping prices.
But you are wrong on a number of fronts.
> Asset prices didn't cause shipping prices across the pacific to explode almost 10X [2].
Monetary policy has a massive influence on aggregate demand by consumers.
> Check out the graph on page 7 (11th page in the PDF) [1] It shows you just how little global central bank balance sheets are in terms of the market
You're focusing on the wrong thing. What matters is money/assets changing hands and bidding up the price of things. Fed policy absolutely has a massive impact on this, nobody denies this empirically.
Bids jumped by about 30% when the war began, but the price of wheat was already up by nearly 100% over pre-pandemic levels when we still thought there was little chance of war breaking out.
https://www.ers.usda.gov/webdocs/outlooks/100227/whs-21a.pdf...
"Backwardation is when the current price of an underlying asset is higher than prices trading in the futures market."
If you look at the curve since OP, you'll see it's is actually less backwardated than it's been all year (due to repeated releases from the US reserves). But long term futures are near their highest - suggesting a worse picture for impact on consumer prices over time.
Source: traded oil futures professionally. Data you can watch: https://www.eia.gov/outlooks/steo/marketreview/crude.php
The reason why QE doesn't lead to inflation is so utterly boring it surprises me that people even think it can cause inflation. Once interest rates fall below liquidity preference, people would rather keep their money liquid than invested in fixed term assets (treasuries or certificates of deposit) which means banks need liquid assets (reserves) to match their now increasingly liquid liabilities (your deposits).
Banks have learned from 2008 and aren't lending to risky borrowers anymore which means the government is acting as the borrower of last resort.
Hayekian acolytes and hard money advocates have been warning about this on this very site for YEARS, only to be downvoted and shouted down by the dominant Keynesian Central Bank Worshipper HN zeitgeist.
No, these consequences have been in the making since Helicopter Ben launched QE. The supply chain shocks introduced by COVID definitely accelerated things, but the outcome was always inevitable.
Furthermore, the March print only included a small portion of the Ukraine-related inflation, specifically in fuel prices only. It's going to take several quarters for these high energy costs to filter into the rest of the CPI. So if you think this March print is bad, just wait.
Exiting COVID, lots of demand chasing limited supply, shipping issues, supply chain issues - especially for core inputs like silicon wafers. However, that was well on its way to being resolved, which is what you see in the CPI data in spite of the Russian war. +0.3% MoM vs expected +0.5% MoM. The worst is well behind us.
Lumber is way down, corn is flat, soy is flat, consumer discretionary inventories (excluding auto) are up and there's word that demand for chips has peaked too.
> No, these consequences have been in the making since Helicopter Ben launched QE.
The impact from QE is limited compared to all the above. There's a ton of demand for dollars, not just domestically but internationally. Monetary policy has some, small, impact, but nothing compared to the war, supply chains, shipping issues and labor market issues.
How can you accurately predict that the worst is behind us, when you don't know the outcome of the Covid tornado wreaking havoc in China? You can correctly forecast how that's going to play out and how it'll impact manufacturing and consumer prices globally? Of course not, nobody can.
Fed funds rate: 0.5%
US gov debt: 125% GDP
HN: the problem is COVID/Putin, there is nothing the WH or the Fed can do.
Source: "Der Spiegel" yesterday citing a US research institute.
The US sanctions on North Korea for example have caused incomprehensible amounts of starvation, a fate worse than being killed in an airstrike, yet people don't seem to care.
In this case the citizens who consume the pro-sanctions narrative are expected to toe the line while they pay higher prices.
"See what Mr. Putin made me do to you, on your behalf!" seems a greater leap than saying, "See what Saddam made me do to those Iraqis on your behalf!"
The prohibitions on trade are the fault of those enacting the prohibitions on trade.
If you're going to take the realpolitik stance of demanding the necessity of the sanctions as a result of the Russian administration's actions, then where does this train of consequences end?
Did the war in Ukraine happen in a vacuum? Were there no precipitating events, no opportunities for deescalation? If the invasion was solely the fault of the Russian administration, then it should follow that the sanctions are solely the fault of those who enacted them.
International trade isn't a right, it's a privilege. Agreements negotiated between states at the state level. You have a right to trade at home, you don't have a right to trade abroad whether that's at the discretion of the state that represents your interests, or the state that represents the interests of your trading partner.
For instance, the Chinese can't sell fentanyl into the US market. Why not? Because trade isn't a right, it's a privilege.
> If the invasion was solely the fault of the Russian administration, then it should follow that the sanctions are solely the fault of those who enacted them.
Other way. If the fault of the invasion was solely on Russia then the consequences of those actions are also on Russia.
How fair is it to force starvation upon a populace in retribution for the actions of an unelected leader?
As a thought experiment, suppose that Russia did not have nukes nor means to retaliate, would you be equally okay with the US bombing Russian cities and killing civilians in numbers equal to those that will starve due to our sanctions?
What if instead of sanctions or bombing we developed some kind of chemical weapon that increased the population's metabolism such that equal numbers starve. Would that not be seen as completely despicable? Yet the outcome is the same.
As a fun bit of trivia, one of the main opium traders, Jardine Matheson is still around. Now a British-domiciled Bermuda corporation that, among other things, owns the Mandarin Oriental.
There were a lot of things popular back then that wouldn't be such an easy sell today. Slavery, for one (not in the UK, btw, they'd already ended it by then).
> As a thought experiment, suppose that Russia did not have nukes nor means to retaliate, would you be equally okay with the US bombing Russian cities and killing civilians in numbers equal to those that will starve due to our sanctions?
As an aggressor nation conducting genocide in all but name? Go to town. By "go to town" I mean bomb government and military buildings until they surrender, and avoid civilian casualties at all costs.
How many Russian civilians died btw, as a result of these sanctions?
> What if instead of sanctions or bombing we developed some kind of chemical weapon that increased the population's metabolism such that equal numbers starve. Would that not be seen as completely despicable? Yet the outcome is the same.
The only folks using chemical weapons appear to the the Russians. But I'm sure you know they're broadly banned by the Geneva Convention.
>Russian President Vladimir Putin has said his country had "no other choice" but to invade Ukraine and that what he has called a "special military operation" was aimed at saving people in the Donbas region.
Just as others would claim that the west had "no other choice" but to prohibit trade. From my side your response reads as side-stepping this direct comparison. Perhaps one could even go as afar as denying the free-will of human actors by concluding that the sanctions were inevitable, just like the war was inevitable.
Another area where I would differ with your perception of fundamentals would be the personification of the state. States, in my view are incapable of trading. It is individual human actors who create trade. National anthems, lines on a map or flags simply cannot load up the trucks. As to the origin of rights, because humans create states, their rights clearly do not come from those states.
Take any example of a state abusing or denying someone their rights. Next observe that those were not rights, those were privileges. This chain of logic works well if you believe that rights originate from the state.
>“Everything in the State, nothing outside the State, nothing against the State.”
You're conflating decent people with their indecent governments. There are plenty of decent people who would gladly trade with decent people of countries we sanction, but we not only punish the entire country, we punish ourselves in the form of higher prices. Those prices ripple through the economy and we all get less.
Virtually everyone loses here, but we're supposed to take solace that the "other side" suffers more. That is pure 1984-level insanity.
This may not be fair for the individual - but no less so than it is for the individuals in other countries that their government affects - but collectively, they are their country.
It's an interesting read. I recommend as you read through the recommended provocations, try to figure out which ones we implemented and what was the result. There's quite a few such as withdrawing from peace treaties, arming Ukraine with lethal weapons, and performing military exercises on Russia's border.
https://www.rand.org/pubs/research_reports/RR3063.html
If anyone perceives this as being "pro-Putin" don't bother responding. He's an evil dictator who should be in prison for the rest of his miserable life and I'm uninterested in hearing you parrot the regime's propaganda that if you criticize them you must be pro-Putin.
The Rand paper describes why the US military funded report believes Russia invaded Ukraine, and it's as a result to the provocations we implemented. It's fair to disagree with it, but it didn't come from Russia, it came from a US military think tank.
Also note that the paper is from 2019. Russia's invasion of Crimea and Donbass was 2014. So Russia was perfectly capable of getting there without the US having to figure out how to "provoke" them.
I'm not going to bother with semantics arguments around whether the US intended for Russia to go further into Ukraine vs intentionally kept escalating the behaviors that they knew would increase the risk of Russia going further into Ukraine but they didn't "want" it to happen.
In 2014, you mean when the US openly supported revolution in Ukraine and cherry picked the new administration?
https://www.theguardian.com/commentisfree/2014/apr/30/russia...
Ukraine had previously had a long-standing agreement with Russia to guarantee access to the only warm water port Russia had. After the new regime that was picked by the US came in, they revoked that relationship. That is the reason why Russia took Crimea (warm water port), because it was unwilling to be nerfed by the US in this way.
If you couldnt make it anymore obvious that you're pro-putin... you bring up the Kharkiv pact and then re-order historical events to blame putin's actions on the US.
The pact that was terminated BY RUSSIA, AFTER they took Crimea.
The idea that the US cherry picked the new administration is bonkers. The only "evidence" of this is a phone call where some diplomats talk about how effective they think the opposition are. If there a phone call where US officials say that they think Macron is better than Le Pen is that evidence that the US chose Macron to be the leader of France?
It's an especially silly accusation when you realize that the temporary government just ruled for 6 months until they held an election and made no major changes during that time.
If Putin actually wanted to get his hands on Ukraine to turn it into a puppet state or kick start a neo soviet union then he completely failed.
The primary purpose of those exercises was to signal a strong commitment to NATO defense for the Baltics and Eastern Europe.
That seems to have been successful as Russia has not touched Poland and so the overall scope of conflict of this war was reduced to Ukraine.
> arming Ukraine with lethal weapons
This seems to also have been successful. Without those weapons, Ukraine would have been overrun and we would have seen Bucha 2.0 in Kiev.
I find it hard to believe that giving Ukraine fewer weapons would have resulted in no invasion, especially given the fact that Russia only invaded because they believed Ukraine was weak.
I do agree that this one was risky, which is why we made sure to get consent from Ukraine's democratically elected government for this policy.
> withdrawing from peace treaties
I assume this is referring to "Withdraw from the INF Treaty", which is an arms control treaty, not a peace treaty? Or is there some other treaty you are referring to? I highly doubt this has had any real effect, given that nuclear escalation is so far off the table anyways and any missiles of this variety would have been stationed in the Baltics / Poland anyways.
The paper explicitly calls out providing lethal aid to Ukraine as one of the highest risk actions and most directly tied to Russia feeling pressure to go further into Ukraine. It's a chicken and egg situation. Yes, the lethal aid was helpful, but would the lethal aid have been necessary if we weren't interfering so much there?
Let's not forget Operation Timber Sycamore where we did execute a coup attempt in Syria, one of Russia's biggest allies. And our dealings with Iran, another Russian ally.
We signed the Charter on Strategic Partnership signaling our intent to let Ukraine into NATO, which would obviously be a red line for Russia. The weird thing about this one is that after the invasion Zelensky revealed that publicly the US was saying Ukraine would be joining NATO but privately the US was telling Zelensky it would never happen. So it was a psyop specifically to provoke Russia.
We also pulled out of the Open Skies Treaty.
One clarification here. None of this is to say that Russia is justified in doing anything. Putin is an evil dictator. End of story. Also, the US repeatedly escalated tensions with Russia knowing that the Ukraine invasion was a likely response Russia would take.
Atrocity Propaganda (https://en.wikipedia.org/wiki/Atrocity_propaganda) is extremely effective.
>Atrocity propaganda is the spreading of information about the crimes committed by an enemy, which can be factual, but often includes or features deliberate fabrications or exaggerations.
>"So great are the psychological resistances to war in modern nations", wrote Harold Lasswell, "that every war must appear to be a war of defense against a menacing, murderous aggressor. There must be no ambiguity about who the public is to hate."
Also, what you call a coup did not install a new government. The parliament was still the same. All MPs who didn't flee remained MPs. Including from Yanukovitch's party and including openly pro-Russian ones.
Finally, a new president was _elected_ very shortly (given the circumstances).
No. NSDAP did not win once in free elections. He got into power only after subverting the election system in a couple of ways.
> That's also democracy, literally.
Pogroms are also democracy, literally. The majority decided that Jews ate Christian babies, and acted to end the great evil.
When we, in the so-called West that I also feel a part of, say "democracy" - we mean also the "rule of law". The idea that you can do anything as long as 50% + 1 person agrees to it is not democracy in the Western sense.
> Also, what you call a coup did not install a new government.
That only means the coup failed, not that it didn't take place.
> The parliament was still the same. All MPs who didn't flee remained MPs.
If enough MPs flee to make it impossible to govern, the Parliament should dissolve itself. Instead, it chose to remove the President using unconstitutional means. I don't know what else that Parliament did, but whatever it was, it could have waited until the elections, which would happen quickly after dissolution.
> Finally, a new president was _elected_ very shortly (given the circumstances).
Sure. Nobody says otherwise. The problem is the time between the riots and new elections. The riots that cost more than a hundred dead are also a problem. In democracy that upholds the rule of law, fighting and killing 18 police officers is a crime, no matter how morally justified it was.
Like the GP, I believe Putin is bad and Russia is an aggressor, and all of that. This war is wrong and Ukrainians are brave people. However, the Euromaidan was not a win for democracy. It was not the right thing to do in a democratic country. Here in Poland we managed to peacefully replace the communists in '89-'91. Nobody died back then. No riots happened. No violence broke out. Precisely because we aspired for democracy, even if the other side had blood of workers on their hands. If we could do that peacefully, then Ukrainians could have ousted Yanukovych without 100 people dying, and more than a thousand people getting seriously wounded. Instead, they chose to resort to violence.
I'm not pro-Russia. It would be suicidal for me to be pro-Russia. I'm not saying the current or previous governments of Ukraine are illegitimate. All I'm saying is that Euromaidan is not something anyone should be proud of. The goals do not justify the means. Killing is a crime. Violence is bad. Just because the violence was done in the name of anti-Russia sentiment does not make it less bad.
As for fracking leases, oil companies have over 9000 approved permits they're not using already, and when pressed on why, CEOs stated it is because shareholders want them to be conservative with capital. I suspect it's because they realize this is all transient and there's no sense investing in the long run to address a short-term spike.
It will be interesting to see how energy companies respond to this though. Will they play chicken with Russia to see how long it will hold on the price increase? Or will they start dropping the capex to tap the more expensive resources that the higher price point has unlocked?
Every day it's "Putin Price Hike", and absolutely 0 taking responsibility.
[edit] Blaming the world for the sanctions they imposed on the Russians is like seeing a bully smacking a victim yelling "stop hitting yourself" and saying "yeah! why are you hitting yourself?!"
So yeah, the Russians are responsible for large increases in the cost of oil, and food. Are there other factors at play? Sure. A global shipping crisis, a COVID outbreak and lockdowns in China. A lot of pent-up demand chasing limited supply. Snarled supply chains.
I do think we'd be much further along getting out of this if the Russians hadn't kicked off their 'special military operation.'
What are we blaming the administration for? Continuing the bi-partisan Trump-era QE cycle which allowed America the fastest-ever exit from a recession event (COVID), saving America from a lost decade?
...though the certainty that inflation is definitely 100% Biden's fault is a bit unjustified too.
When you walk into your grocery store and see consumer basics going up in price so dramatically, it's going to prompt the desire to blame, and of course Biden is a big target. Regardless of if it's fair for voters to blame Biden so heavily, they are and will.
Claiming they’re not responsible, or even worse, claiming that an additional $1.85T of spending will reign in inflation is beyond ridiculous: https://www.nytimes.com/2021/11/11/business/economy/biden-in...
The reality is everyone agrees: if you increase the money supply beyond demand for money, inflation will result. However, the demand for money is extremely difficult to model and is incredibly unpredictable. There's demand for US dollars all over the world, from dollarized economies like Venezuela and El Salvador and Panama - to European and Asian bond buyers - to unusual dollar demand curves at home, such as the sudden fear that gripped the economy during COVID that caused everyone to stuff dollars into their mattresses.
The model is far more complex than you're making it out to be.
Was Biden running the government response (or the Fed policy) when 2008 happened (when QE started, that many here are blaming for the inflation)? No, he wasn't. He wasn't even running the response for the first part of Covid. I seem to remember stimulus checks with Trump's signature on them.
One could fault Biden for the anti-drilling and anti-pipeline policies. But much of the blame is just "he's the guy currently there", so he gets the blame. "The buck stops here", and all that. It's unfair. But it happens to every president, and it's always unfair.
No, the Fed is supposed to be relatively isolated from short-run political influence to put a step of separation between government fiscal policy targeting the economy (the responsibility of Congress) from monetary policy affecting the currency (the responsibility of the Fed) except to the extent that the former effects the landscape that the latter targets, to maintain confidence in the currency by making monetization of debt unlikely.
This is very much not to prevent the elected officials of government from intervening in the economy. If anything, it frees them to do so, because the barrier against monetization of debt not only protects the currency, it protects policymakers from the perception that deficits will likely be resolved with monetization, which is a brake on fiscal policy that involves deficit spending.
Congress isn't a person or even an institution with a unitary head, and that's at least 5 separate Congresses, several of which didn't have even approximate unity between the two houses on the issue.
And most of the promises on that came from the White House, not “Congress” (as if there was anyone who could speak for “Congress” anyway.)
And Congress passed infrastructure bills in 2009, 2012, and 2015 before the one in 2021.
I think it's more the former, leading to a circular argument on where the blame for that 60% lies.
No, the Fed is an independent entity similar to the supreme court. The president could fire the chair and install someone new, but I don't believe that has ever been done.
This may be hard to hear, but you probably shouldn't be watching it every single day. They're never going to say what you want them to say because it's not true.
Russia's invasion of Ukraine (and associated war crimes) is most definitely a root cause for current inflation spikes in food and energy. If you're looking for someone to say that it's due to other factors then you're looking for something that isn't true.
And food/energy prices are most likely going to get worse as the conflict drags on.
Government borrowing will be inflationary if it is financed by the central bank and it doesn't look like there is any credible plan for paying it off. That sort of thing is indistinguishable from printing currency to pay your bills, which doesn't work out very well after a while. Germany in the 1920s and Zimbabwe more recently are good examples of that.
Is the government responsible for the inflation observed right now? That's a complex answer, of which current political adversaries of the executive branch leadership would love to pin solely on them.
EDIT: It was a simple comment, not a lecture of how the global economy works. Point was that there is a hell of a lot more causing inflation than the supply of Russian oil. Much higher prices have had nowhere close to the overall impact on CPI that we are currently experiencing.
This comment betrays a deep lack of understanding about how pricing works for fungible commodities.
Russian oil is a huge chunk of the world supply, and oil is sold on a global market.
> It was a simple comment, not a lecture of how the global economy works.
Well, one can only reply to the comment you wrote, and that comment, as originally written, was misleading at best.
> Point was that there is a hell of a lot more causing inflation than the supply of Russian oil.
No one is claiming otherwise.
But the annualized core inflation rate (6.5%) is dwarfed by the headline rate (8.5%) and the key difference between those rates is fuel and food, both of which are directly affected by Russian actions in Ukraine.
Furthermore, as the article notes: "there were signs that core inflation appeared to be ebbing, as it rose just 0.3% for the month, less than the 0.5% estimate"
Moreover core inflation, despite factoring out direct fuel costs, is still influenced by fuel costs as fuel factors into the price of many other goods. So that 0.3% increase in core inflation is actually pretty remarkable in that it's lower than I would've expected given the brutal increase in fuel prices.
The upshot being, were it not for Russian invasion of Ukraine, I suspect the headline would be "Growth in consumer prices fell slightly in March" as increasing interest rates plus an easing of supply chain issues has reduced pressure on consumer prices.
But forget all that, it's way more fun to ignore the actual facts and just expound about the money supply and how we all need to invest in bitcoin and gold.