Inflation is always and everywhere a monetary phenomenon -- Milton Friedman

[odolvlobo]

Politicians are telling us that the current level of inflation is caused by "supply chain issues". That is a lie. They are lying in order to hide the fact that rising inflation is a direct result of their policies.

The truth is what was said by the famous and highly respected economist Milton Friedman said: "Inflation is always and everywhere a monetary phenomenon." The problem is not the supply chain. The problem is that the huge influx of money into the economy from central banks and governments has fueled a tremendous surge in demand.

Companies can't find workers to fill the demand. Why not? Because the government paid everyone a bunch of money so they don't need to work. This is shown by the fact that the labor participation and unemployment rates are both low.

[Hydrogen]

Inflation and supply chain are the new healthcare reform.

Americans have wanted to fix their healthcare system for decades. But never managed to learn enough about the basic fundamental workings of healthcare to comprehend exactly how it is broken. Everytime healthcare reform is put on the table, americans wind up supporting the policies that are worst for them.

In 2022, we're like eskimos who want to discuss the finer points of snow and blizzard conditions. But lack the proper terminology and shared experience to do so effectively. That's my take on inflation, supply chain difficulties and similar recent trends.

Of course, there are some who know and comprehend the basic principles. Who have published in depth journalistic pieces on these topics for decades. But no one listens to them. No one reads what they write. And so all of the important connections and conclusions aren't likely to be made by enough people. In the way that it needs to be for society to accurately and effectively respond to crisis, in the way needed to avert negative trends.

[Darker45]

I can only speak for my country. The level of inflation has risen beyond the government target. Of course, the pandemic is largely to blame. But, to be fair to the government, the supply chain is indeed one of the severely affected aspects of the pandemic. This is indeed one of the reasons why the prices are rising.

I'm never defending my government's failures. But I'm afraid there are no pandemic-resistant policies. There must indeed be a policy weakness or perhaps unpreparedness somewhere, but a pandemic that has been ravaging the country for a couple of years now will surely its toll on the economy.

What I didn't notice in my country, though, amidst this rise in inflation is the surge in demand of goods and services. On the contrary, demands on many goods and services are falling. Restaurants, stores, gaming shops, schools, hotels, resorts, and other business establishments are closing. Instead of companies having a hard time filling their demand for labor, what I'm seeing are companies in retrenchment, companies reducing labor force, even companies declaring bankruptcy.

There is poverty as a result of the economic impact of the pandemic. People are no richer today than the pre-pandemic months.

[crwth]

Politicians are telling us that the current level of inflation is caused by "supply chain issues". That is a lie. They are lying in order to hide the fact that rising inflation is a direct result of their policies.

They are just making up stories to make sure that they wouldn't be blamed for what the economy is now.

The truth is what was said by the famous and highly respected economist Milton Friedman said: "Inflation is always and everywhere a monetary phenomenon." The problem is not the supply chain. The problem is that the huge influx of money into the economy from central banks and governments has fueled a tremendous surge in demand.

It's just that they felt too much power that they think it's going to be as easy as that but not really. It is everywhere because a lot of people are corrupt and just want to benefit themselves.

Companies can't find workers to fill the demand. Why not? Because the government paid everyone a bunch of money so they don't need to work. This is shown by the fact that the labor participation and unemployment rates are both low.

I don't think it's just because of the government paying money to them but it's that people probably have found other ways to earn knowing that cryptocurrency adoption is on the rise.

[fiulpro]

Not just their policies but also due to the lack of control they had during the pandemic. The situation could have been handled in a better way but unfortunately now the prices of basic things are sky rocketing.

Inflation is healthy if you consider the small amounts every once in a while but when we are looking forth into the whole system, I think we are 10 years ahead which is negatively stressing the economic growth.

Blaming is just a green card to maybe get votes in the next elections. In few countries they tried to bribe with the huge stimulus check as well.

There are so many shopping complexes that are dying, the surge in the COVID cases are going to sky rocket in my country in approximately 2 weeks, which would have drastic impact on the whole situation as well. But as I have seen, people still love to go to the restaurants but government have changed some rules, now no one is allowed inside without a vaccine or a recent covid-19 negative PCR report which I do think is really interesting and might be working on some levels as well.

[davis196]

If you read books about macroeconomics,you know that there are two types of inflation.
The first one is caused by the increasing money supply(the one you are writing about) and the second one is caused by increased production costs(oil and gas prices going up).The second type can lead to stagflation sometimes.The production cost inflation can be influenced or even caused by the money supply inflation.
Perhaps Milton Friedman is right.
The politicians/governments are addicted to inflation,because inflation decreases the value of all debts and increases the tax revenue.
I don't know about the supply chain issues in your country.There aren't any supply chain issues in my country.
Maybe this problem isn't necessarily linked to inflation and money supply.The closed borders and all the lockdowns in 2020 kinda destroyed some supply chains and those supply chains have to be rebuilt.

[jrrsparkles]

When they told us the truth to expect the truth from them about the current inflation rate is increasing?

Many Central government still reports the false number to keep the inflation rate low so they assume that people will appreciate the government for doing excellent work even in the pandemic situation.

[aoluain]

The one single thing that has kickstarted inflation is the response by governments
around the world to the financial  effects of COVID by printing money and continuing
to do so.

The average Joe and Jane dont understand this or the finer points of inflation so
governments can blame what they like but the vast majority are financially illiterate.

Because of COVID and the reopening of society there are now shortages in transportation,
goods, containers and staffing, these are also feeding the affects of inflation.

Here in Europe we also have an added issue in the form of BREXIT, this is also having its own
issues in the form of the above
transportation and goods shortages, for some EU countries more than others.

[cabron]

There could be many causes why a government will print more money, we can look at the history itself which every country who had experienced the same thing even the Germany that is ever rich in the EU countries had been there. China which today has considerably has the biggest today had once been that low. But we keep the example of Zimbabwe because it's recent where the money filling up on top of the cartwheel is worth less than the cartwheel itself.

Inflation is a monetary phenomenon but the US situation is different. They know they can prevent it from happening but it's continuing to be done so. You really have to watch the news on both sides, the news from the US and the news from China because this cold war will be more brutal and the phase is slow.

You don't wanna go cold/trade war with some countries when you know they are your biggest trade partner because both of you will be affected especially when winter comes. But this health crisis makes it worse.

[Mauser]

I fully agree with this statement. Inflation is being created by the government due to their monetary policies. Officially the inflation target is 2% in most countries, but I believe that the government's have a hidden target that is much higher. When it comes to inflation the politicians don't care about the little guy who loses all his purchasing power. Its all about the benefits of the indebted countries. With a higher inflation the government has to worry less about repaying their debt, because all newly issued debt will be more valuable. Also we shouldn't forget that the central banks are very reluctant to increase the interest rates. With rates near 0% it was just a matter of time to see inflation rates above 4%.

[Wind_FURY]

The Fed’s response to inflation.

1. The Fed will say there’s no inflation.

2. The Fed will say there might be some inflation, but it’s transitory.

3. The Fed will say there is inflation, and they will do something, but there might be nothing they can do.

4. The Fed will say, “it might be late”.

[The Sceptical Chymist]

The problem is that the huge influx of money into the economy from central banks and governments has fueled a tremendous surge in demand.

That's the main problem, absolutely, but I do think those supply chain issues are playing a part in this--for whatever reason, be it that people aren't taking jobs in that supply chain or logistical issues or what have you.  It's damn hard right now to buy cat food at the grocery store in any quantity that my kitties like, so something's definitely wrong with moving product from manufacturer to store shelves.  Demand has probably been driven up as people have started to hoard everyday things (like the aforementioned cat food), which would obviously contribute to prices going up.

But as I said, I agree that the major culprit has been the government and their reckless fiscal policies.  Joe Biden didn't start all of this in the US, nor was it one single politician or even one country.  It's been an ongoing nightmare since at least 2008.

Companies can't find workers to fill the demand. Why not? Because the government paid everyone a bunch of money so they don't need to work. This is shown by the fact that the labor participation and unemployment rates are both low.

Yeah well, the music is going to stop abruptly (and probably soon) and after that, everyone will be scrambling for jobs.  Better secure employment now before the job market dries up if you're currently unemployed.

[Ucy]

Well, this is one of the reasons it was recommended that government pay those who are working or solving problems so you don't have to pay those creating the scarcity/inflation or those who aren't working well enough to contribute to society.
Paying able-bodied people to do nothing is such a dumb idea. Those who practice that as leaders are not worthy to continue to lead

[DrBeer]

What do you dislike about controlled low inflation? This forces people not to freeze assets, but either use them (buy goods / services), or invest ... That one thing or the other launches a very important process of "money movement" in the economy. And this is essentially a synonym for the blood flow in our body in our circulatory system. If it is slow, all processes freeze, our activity tends to 0, there is no strength, we become incapacitated. It is the same in the country's economy when money stops active circulation. And then gratitude, and inflation including

[Gyfts]

What do you dislike about controlled low inflation? This forces people not to freeze assets, but either use them (buy goods / services), or invest ... That one thing or the other launches a very important process of "money movement" in the economy. And this is essentially a synonym for the blood flow in our body in our circulatory system. If it is slow, all processes freeze, our activity tends to 0, there is no strength, we become incapacitated. It is the same in the country's economy when money stops active circulation. And then gratitude, and inflation including

What's wrong with the consumer deciding what to do with their funds and why would any consumer not use their purchasing power to purchase goods? I understand what deflation would do, but clearly there are hardly any countries in the world that can handle their inflation rate at a solid 2 percent without going over, so why bother having central banks involved? And even at 2 percent, imagine someone siphoning out a minimum of 2 percent out of your bank account every year in the best case scenario, with the most probable scenario 3+ percent in some off years, and 5+ percent in worst years.

[tygeade]

The truth is what was said by the famous and highly respected economist Milton Friedman said: "Inflation is always and everywhere a monetary phenomenon." The problem is not the supply chain. The problem is that the huge influx of money into the economy from central banks and governments has fueled a tremendous surge in demand.

Companies can't find workers to fill the demand. Why not? Because the government paid everyone a bunch of money so they don't need to work. This is shown by the fact that the labor participation and unemployment rates are both low.

The labor rate was low and the rate at which the government and the central bank kept pumping in money into the economy was high. From the start it was already being said that something like this was bound to happen: there is going to be an inflation and the rate of inflation is going to be high for sure.

We should be looking at the ways that the government would be able to fight and tackle inflation. And while looking at the ways that these can be done, we should understand that these means of tackling inflation can as well affect the people, take for example when the government tries to use wage and price controls in fighting inflation. So any means that we decide to use should not be too harsh on the people.

[odolvlobo]

What do you dislike about controlled low inflation? This forces people not to freeze assets, but either use them (buy goods / services), or invest ... That one thing or the other launches a very important process of "money movement" in the economy. And this is essentially a synonym for the blood flow in our body in our circulatory system. If it is slow, all processes freeze, our activity tends to 0, there is no strength, we become incapacitated. It is the same in the country's economy when money stops active circulation. And then gratitude, and inflation including

That's a pretty narrative, but I don't think any of it is correct.

My understanding is that an intentional low rate of inflation is like the tail on a kite. The shorter the tail, the more unstable the kite. But the longer the tail, the more it weighs the kite down.

Personally, I think inflation is more like opium. At low doses, it subdues a person, making them lethargic and unresponsive, but happy. At high doses, it kills the person. The real question is whether or not the opium actually helps.

[cafucafucafu]

It's complete bullcrap whatever the transitory agenda that these policymakers are trying to pump out.

It's here to stay, and it is not by accident. Completely by design.

The fact that fiat does not have a supply cap means that this has to happen in the long run. It does not have intrinsic value and will go to zero.

[wxa7115]

When they told us the truth to expect the truth from them about the current inflation rate is increasing?

Many Central government still reports the false number to keep the inflation rate low so they assume that people will appreciate the government for doing excellent work even in the pandemic situation.

The problem for them is that they are losing control of the narrative, why the governments insist so much and state over and over again the inflation is being caused by supply chain issues? Because the inflation is simply too high for the population to ignore.

So they need to create a scapegoat so people do not turn against the governments and blame them about what is happening, however even if they are successful now they have another problem, people are now taking precautions against a potential crisis and this means less consumer spending, which slows down the economy, and there is a renewed interest in investing in a store of value, benefiting bitcoin in the process.

[Hydrogen]

High inflation. High oil and transportation costs. Supply chain issues. Now is a great time to grow fruit trees in 5 gallon buckets.

A big tree is not necessary to grow fruit. It can be done in a smaller and more compact unit. To ease dependency and negative economic trends.

Its not a good time to rely on governments for assistance. Or to expect the state to save you. Best to take matters into your own hands anyway you can.