US Inflation Hits Highest In 40 Years

[Economy 52,907]

https://www.bnnbloomberg.ca/u-s-consumer-prices-climb-at-fastest-annual-rate-since-1982-1.1693706

 

The latest consumer price index reading came in at an inflation rate of 6.8% the highest since 1982

 

To put into perspective a normal healthy rate during normal economic times should be an inflation rate of about 2%

 

The US is hardly alone. Most of the world is struggling with high inflation after a lot of stimulus and money printing to keep economies afloat during pandemic lockdowns are coinciding with supply chain disruptions as well creating shortages of goods and services

[Economy 52,907]

Here in Canada weve been slightly less bad but still always close to 5% range

[PartySick 172,980]

So what's the solution here?

[AsleepOnTheCeiling 6,977]

21 minutes ago, PartySick said:

So what's the solution here?

The treasury is gonna have to issue some bonds or something and delete the money. 

[Economy 52,907]

24 minutes ago, PartySick said:

So what's the solution here?

 

2 minutes ago, TortureMeOnReplay said:

The treasury is gonna have to issue some bonds or something and delete the money. 

Well some of it is indeed because of supply chain disrutions caused by pandemic. Only time will fix that part of it...

 

But the part of inflation that has come as a result of money printing (via QE) and rock bottom interest rates (basically ultra easy and accomodative monetary policy)... only a tightening of monetary policy can do that

 

One thing they can do is the Federal Reserve can sell some of the debt they purchased with printed money with new issued bonds and delete that money out of the system essentially as @TortureMeOnReplay said

 

Interest rates likely will also have to rise a bit if they truly wanna get back down to 2% tho i dunno if they will anytime soon. The Fed looks for every excuse to keep rates low all the time (as do Central Banks of other Nations)...

 

They know for decades consumer and Government debt has kept increasing and the economy cant handle much of any increase so were kinda stuck at rock bottom rates. But to admit we can never increase them by any meaningful amount would be absolutely horrendous for market confidence so they are gonna keep finding reasons to keep it low... the latest excuse is that inflation is transitory so we dont need to hop on it right away... the last 10 years since we started recovering from 2008 financial crisis theres always been one excuse after another. Once they even blamed the weather cuz the winter was too cold so economy was held back and they had to delay rate hikes

 

Please, theres always stuff happening like weather. The fact that ppl buy those excuses is what blows my mind even more