it's all about the fed interest rate stuff. It was getting some traction in the news a few months ago, but you kinda had to look for it. I'm not an econ nerd or anything so I might get some of these points wrong but this is generally how I understand it, anyone feel free to chime in.
The Fed is still keeping interest rates low to "promote growth" or keep the zombie economy stumbling on by pumping in cheap credit. But low interest rates are part of why we're seeing this inflation stuff. However if the Fed did raise interest rates it could cause the economy to totally shit itself because, well look at it, it's in a bizzaro speculative bubble and super unstable. This is what the wonks call COVID recovery, but it's more keeping a totally speculative market shambling on.
Inflation is really bad for capital, not because of rising prices, but because of two things:
1: it makes borrowed money less valuable, if you take out a home loan for 200k, but inflation halves the value of the dollar, assuming your wage grows somewhat, that amount you owe is just worth less now.
2: it undermines the international US financial neo-imperialist project. The dollar as the world's reserve is potentially threatened and it makes it harder to keep the flow of cheap consumer goods coming in when the dollar is worth less compared to international currencies.
So yeah, rock and a hard place, it's either inflation or popping the speculative market bubble, and what would we do if a car company run by a meme man isn't worth 4x more than Toyota which produces 20x the number of cars.
Is there a chance that we get anoher Volker-Shock from the Fed raising interest rates? Since that was the way they deliberately induced a recession, and kept it going for a good while, making millions of americans umemployed and more precarious than ever.
Obviously raising the interest rate up to the same crazy level as what they did in the 1970's seems improbable, but I'll bet it also felt unlikely right up untill the point where the Fed actually did it. And the reacionary backlash the first time ushered in an era of Reaganomics, with disasterous impact on both the planet and the average worker in America.
it's all about the fed interest rate stuff. It was getting some traction in the news a few months ago, but you kinda had to look for it. I'm not an econ nerd or anything so I might get some of these points wrong but this is generally how I understand it, anyone feel free to chime in.
The Fed is still keeping interest rates low to "promote growth" or keep the zombie economy stumbling on by pumping in cheap credit. But low interest rates are part of why we're seeing this inflation stuff. However if the Fed did raise interest rates it could cause the economy to totally shit itself because, well look at it, it's in a bizzaro speculative bubble and super unstable. This is what the wonks call COVID recovery, but it's more keeping a totally speculative market shambling on.
Inflation is really bad for capital, not because of rising prices, but because of two things:
1: it makes borrowed money less valuable, if you take out a home loan for 200k, but inflation halves the value of the dollar, assuming your wage grows somewhat, that amount you owe is just worth less now.
2: it undermines the international US financial neo-imperialist project. The dollar as the world's reserve is potentially threatened and it makes it harder to keep the flow of cheap consumer goods coming in when the dollar is worth less compared to international currencies.
So yeah, rock and a hard place, it's either inflation or popping the speculative market bubble, and what would we do if a car company run by a meme man isn't worth 4x more than Toyota which produces 20x the number of cars.
Is there a chance that we get anoher Volker-Shock from the Fed raising interest rates? Since that was the way they deliberately induced a recession, and kept it going for a good while, making millions of americans umemployed and more precarious than ever.
Obviously raising the interest rate up to the same crazy level as what they did in the 1970's seems improbable, but I'll bet it also felt unlikely right up untill the point where the Fed actually did it. And the reacionary backlash the first time ushered in an era of Reaganomics, with disasterous impact on both the planet and the average worker in America.