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Comment by curiousgeorgio | Hacker News Reader

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curiousgeorgio·

Why, of course it's Russia's fault. Couldn't be related to this:

https://fred.stlouisfed.org/series/M1SL [1]

[1] Keep in mind, the effects of these changes are often not felt in everyday prices for at least 1-2 years.

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The m1 graph is incredibly misleading to the point of bad faith IMO because they changed the definition, causing the spike in April 2020. The M2 graph https://fred.stlouisfed.org/series/WM2NS still shows that the monetary base is expanding (less drastically) without effectively lying.

Even putting the graph aside, could we really expect anything other than high inflation when the U.S. gov't has been injecting trillions (much of which is deficit spending) into the economy for the past couple of years?

Well they were injecting trillions over the decade following 2008, so it really wasn't that clear. But yes, some inflation was expected following the covid relief packages.

M2 includes M1 and it did not move nearly as much, suggesting that the nominal change in M1 was much larger than the part which had real economic consequences.

https://fred.stlouisfed.org/series/M2SL

Any significant feature in a data set is going to look (relatively) smaller when you include that in a much larger data set. You can argue that M2 is more relevant to inflation (I'd disagree), but it doesn't change the fact that M1 has seen drastic increases.

Time will tell how much effect this has on inflation, but it's odd that so many of the people complaining about inflation insist that it must be related to anything but the increase in money supply.

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