Republican Panic Caused Inflation - Thanks Fox!

[citygator]

Studies show that Republican panic about the economy and their economic expectations actually caused inflation. Republicans projected outlandish inflation fears and the authors say that these inflationary expectations actually turned into inflation:

“We find strong positive and significant effects of inflation expectations on inflation itself.... A one percentage-point increase in 1-year or 5-year inflation expectations lead to a 1.3 or 2.3 percentage point increase in inflation, respectively.”

They figure that inflation would have topped out around 5% and would currently be at 1.7% under rational expectations.

The results are quite eye opening. If the paper is right, we're paying a huge price for the Trump/Fox-induced economic panic that continues to irrationally infest Republican voters.

Study suggests Republican panic caused recent inflation - Kevin Drum

 

[1srelluc]

 

[Toddsterpatriot]

Studies show that Republican panic about the economy and their economic expectations actually caused inflation. Republicans projected outlandish inflation fears and the authors say that these inflationary expectations actually turned into inflation:

“We find strong positive and significant effects of inflation expectations on inflation itself.... A one percentage-point increase in 1-year or 5-year inflation expectations lead to a 1.3 or 2.3 percentage point increase in inflation, respectively.”

They figure that inflation would have topped out around 5% and would currently be at 1.7% under rational expectations.

The results are quite eye opening. If the paper is right, we're paying a huge price for the Trump/Fox-induced economic panic that continues to irrationally infest Republican voters.

Study suggests Republican panic caused recent inflation - Kevin Drum

View attachment 952838

 

[Lemmi]

Not only did the Republican's panic cause inflation it's also causing President Biden to wander off stages after speeches and having to use the children's stairs when getting off Air Force One.

 

[Papageorgio]

Studies show that Republican panic about the economy and their economic expectations actually caused inflation. Republicans projected outlandish inflation fears and the authors say that these inflationary expectations actually turned into inflation:

“We find strong positive and significant effects of inflation expectations on inflation itself.... A one percentage-point increase in 1-year or 5-year inflation expectations lead to a 1.3 or 2.3 percentage point increase in inflation, respectively.”

They figure that inflation would have topped out around 5% and would currently be at 1.7% under rational expectations.

The results are quite eye opening. If the paper is right, we're paying a huge price for the Trump/Fox-induced economic panic that continues to irrationally infest Republican voters.

Study suggests Republican panic caused recent inflation - Kevin Drum

View attachment 952838

Nice propaganda spin, and you swallow it whole.

 

[g5000]

As I pointed out years ago, inflation is caused by a rapid increase in the velocity of money.

The Fed's Bond Bubble Doomsday Machine

When you buy a bond, you are making a loan to the issuer. That bond is money owed to the buyer, making it an asset. When the Federal Reserve buys a US Treasury bill, note, or bond, it is making a loan to the federal government because the federal government has appropriated more spending than...

www.usmessageboard.com

If the Fed prints a trillion dollars and it gets buried in the back yard, then you don't get any inflation.

To stimulate the economy after the 2008 crash, the Fed instituted several phases of quantitative easing. But the expected inflation did not occur because no one was spending much. The velocity of money did not pick up.

During the pandemic, the Fed instituted quantitative easing on steroids in 2020.

Again, no inflation while the world's economy was shut down. The velocity of money fell off a cliff.

But once the shutdowns were lifted, demand went through the roof, and the velocity of money rose, and we then saw inflation take off.

Because of the shutdown, the supply chain had been virtually mothballed and was overwhelmed by the post-pandemic demand shock.

Now about that panic. That happens every time with inflation. People begin panic buying out of fear the items they want will go up in price. This exacerbates the inflation. It's a snowball effect.

Anyway, I will post some charts in my next post.

 

[citygator]

Nice propaganda spin, and you swallow it whole.

I am just offering up a well researched study under peer review now. Makes sense that the republicans fantasy world view has some serious repercussions.

 

[g5000]

An astronomical increase in the Fed balance sheet during the pandemic:

]

Despite trillions and trillions of dollars of QE by the Fed after the 2008 crash, the velocity of money kept declining. Thus, no inflation:

With QE on steroids during the pandemic, the velocity of money began picking up when the shutdowns were lifted:

Consumer expenditures (demand) rose to an all time high after the pandemic. The surge is seen from the bottom of the pandemic plunge followed by a rapid rise to new highs.

As a result in the spike of spending and consumerism, the number of shipping containers and the number of container ships at our California ports surged tremendously to record highs. This overwhelmed the system.

 

[citygator]

As I pointed out years ago, inflation is caused by a rapid increase in the velocity of money.

The Fed's Bond Bubble Doomsday Machine

When you buy a bond, you are making a loan to the issuer. That bond is money owed to the buyer, making it an asset. When the Federal Reserve buys a US Treasury bill, note, or bond, it is making a loan to the federal government because the federal government has appropriated more spending than...

www.usmessageboard.com

If the Fed prints a trillion dollars and it gets buried in the back yard, then you don't get any inflation.

To stimulate the economy after the 2008 crash, the Fed instituted several phases of quantitative easing. But the expected inflation did not occur because no one was spending much. The velocity of money did not pick up.

During the pandemic, the Fed instituted quantitative easing on steroids in 2020.

Again, no inflation while the world's economy was shut down. The velocity of money fell off a cliff.

But once the shutdowns were lifted, demand went through the roof, and the velocity of money rose, and we then saw inflation take off.

Because of the shutdown, the supply chain had been virtually mothballed and was overwhelmed by the post-pandemic demand shock.

Now about that panic. That happens every time with inflation. People begin panic buying out of fear the items they want will go up in price. This exacerbates the inflation. It's a snowball effect.

Anyway, I will post some charts in my next post.

Even though your post was thoughtful this was a different economic crisis than you painted. In almost no cases did an increase in demand drive price increases. Houses, cars, computer chips etc were impacted not because of a run up in demand, even now fewer units than 2019 are being sold, but instead were impacted by low supply, wage increases from labor shortages, company profiteering, and customer fear.

This wasn’t a money supply issue. In fact your charts show how the fed bridged the shortfall in demand not added to it.

 

[Papageorgio]

I am just offering up a well researched study under peer review now. Makes sense that the republicans fantasy world view has some serious repercussions.

I’m thinking that infusing trillions into the economy caused inflation but I am looking at it from an economical standpoint not political and most economist see the passing of stimulus money caused inflation but we were in a crisis.

Political theories are silly and not substantive.

 

[citygator]

I’m thinking that infusing trillions into the economy caused inflation but I am looking at it from an economical standpoint not political and most economist see the passing of stimulus money caused inflation but we were in a crisis.

Political theories are silly and not substantive.

Not really. If you look at demand there was no run up in demand spending. The federal government replaced lost demand as I said above, it didn’t add to it.

 

[IM2]

Not only did the Republican's panic cause inflation it's also causing President Biden to wander off stages after speeches and having to use the children's stairs when getting off Air Force One.

And it causes Trump to not be able to pronounce words and talk about the late Hannibal Lecter.

 

[OKTexas]

Studies show that Republican panic about the economy and their economic expectations actually caused inflation. Republicans projected outlandish inflation fears and the authors say that these inflationary expectations actually turned into inflation:

“We find strong positive and significant effects of inflation expectations on inflation itself.... A one percentage-point increase in 1-year or 5-year inflation expectations lead to a 1.3 or 2.3 percentage point increase in inflation, respectively.”

They figure that inflation would have topped out around 5% and would currently be at 1.7% under rational expectations.

The results are quite eye opening. If the paper is right, we're paying a huge price for the Trump/Fox-induced economic panic that continues to irrationally infest Republican voters.

Study suggests Republican panic caused recent inflation - Kevin Drum

View attachment 952838

Talk about voodoo economics, a conclusion in search of support. I guess the trillions pumped into the economy had nothing to do with inflation, it was all expectations.

Well hell, maybe they're right, republicans are smart enough to know what happens when that much money floods the market, commiecrats, not so much.

.

 

[Toddsterpatriot]

As I pointed out years ago, inflation is caused by a rapid increase in the velocity of money.

The Fed's Bond Bubble Doomsday Machine

When you buy a bond, you are making a loan to the issuer. That bond is money owed to the buyer, making it an asset. When the Federal Reserve buys a US Treasury bill, note, or bond, it is making a loan to the federal government because the federal government has appropriated more spending than...

www.usmessageboard.com

If the Fed prints a trillion dollars and it gets buried in the back yard, then you don't get any inflation.

To stimulate the economy after the 2008 crash, the Fed instituted several phases of quantitative easing. But the expected inflation did not occur because no one was spending much. The velocity of money did not pick up.

During the pandemic, the Fed instituted quantitative easing on steroids in 2020.

Again, no inflation while the world's economy was shut down. The velocity of money fell off a cliff.

But once the shutdowns were lifted, demand went through the roof, and the velocity of money rose, and we then saw inflation take off.

Because of the shutdown, the supply chain had been virtually mothballed and was overwhelmed by the post-pandemic demand shock.

Now about that panic. That happens every time with inflation. People begin panic buying out of fear the items they want will go up in price. This exacerbates the inflation. It's a snowball effect.

Anyway, I will post some charts in my next post.

Velocity doesn't mean anything.

 

[citygator]

Talk about voodoo economics, a conclusion in search of support. I guess the trillions pumped into the economy had nothing to do with inflation, it was all expectations.

Well hell, maybe they're right, republicans are smart enough to know what happens when that much money floods the market, commiecrats, not so much.

.

Ok. Explain to me how it happened genius.

 

[g5000]

Here's what I said in my Fed Doomsday Bond Bubble topic years ago:

But what happens when the economy begins warming up again? What happens when people start digging up that $3 trillion from their backyards and begin spending it, increasing the velocity of money in our economy?

Inflation happens, that's what.

Back then, the Fed had printed $3 trillion.

Their balance sheet is now an incomprehensible $8.7 trillion.

 

[g5000]

Velocity doesn't mean anything.

It means everything.

Like I said, if the Fed prints a trillion dollars and then buries it in the backyard, it has no effect on inflation.

 

[g5000]

Velocity doesn't mean anything.

What is Velocity of Circulation?​

​

Velocity of Circulation refers to the average number of times a single unit of money changes hands in an economy during a given period of time. It can also be referred to as the velocity of money or velocity of circulation of money. It is the frequency with which the total money supply in the economy turns over in a given period of time.

If the velocity of money is increasing, then the velocity of circulation is an indicator that transactions between individuals are occurring more frequently. A higher velocity is a sign that the same amount of money is being used for a number of transactions. A high velocity indicates a high degree of inflation.

 

[citygator]

Here's what I said in my Fed Doomsday Bond Bubble topic years ago:



Back then, the Fed has printed $3 trillion.

Their balance sheet is now an incomprehensible $8.7 trillion.

I’m not sure a post from 2013 qualifies as an accurate prediction of a supply shortfall driven inflation event.

The feds balance sheet doesn’t drive supply and demand and that’s the only thing that matters. We are heavily a consumer based economy and that is what drives pricing. In fact our flexible and efficient supply production has led reduced costs for decades. Much was undone in Covid but “easy money” wasn’t a big driver.

 

[bigrebnc1775]

Studies show that Republican panic about the economy and their economic expectations actually caused inflation. Republicans projected outlandish inflation fears and the authors say that these inflationary expectations actually turned into inflation:

“We find strong positive and significant effects of inflation expectations on inflation itself.... A one percentage-point increase in 1-year or 5-year inflation expectations lead to a 1.3 or 2.3 percentage point increase in inflation, respectively.”

They figure that inflation would have topped out around 5% and would currently be at 1.7% under rational expectations.

The results are quite eye opening. If the paper is right, we're paying a huge price for the Trump/Fox-induced economic panic that continues to irrationally infest Republican voters.

Study suggests Republican panic caused recent inflation - Kevin Drum

View attachment 952838

Biden's failed polices are the cause.