From what I can gather, the inflation we're seeing right now is a combination of a lot of things, mostly caused by covid and acceleration of trends that have existed for a while.
In terms of general inflation of goods, most of this inflation (contrary to what a lot of people want you to believe) is not caused by the Fed printing a shit ton of money, stimulus checks, or any of that. It's in large part "real" because the price of shipping goods from around the world has gone up tremendously. Thanks to covid shutting down ports and more people shopping for things online, transporting goods becomes more expensive. A lot of those "goods" aren't consumer goods but parts for factories and things like that. So even if your item is made fully in the US, if a machine in the factory breaks and you need to order the replacement part from China, good luck. It costs more and takes longer, and that is then pushed on to the price of the underlying good.
This is exacerbated by a particular supply glut in semiconductors, which are now in everything from cars to toasters to your cell phone. Semiconductors are incredibly difficult to make, are made by machines worth millions of dollars, and there's like two companies in the world that can make them at all. The supply of those semiconductors, as more people want to buy cars and other things, is heavily constrained on top of already skyrocketing prices of logistics.
Couple both of these trends with the trade war with Russia, which supplies a lot of fertilizer and precious metals for things like semiconductors and consumer goods, and you have a crazy inflationary environment. Once inflation starts going, it's hard to stop as people come to expect it, which causes prices to rise further. The supply chain issues won't clear up until 2024 at the earliest, when more container ships being built right now come into service, and that's predicated on covid not continuing to shut down ports. Likewise, the Great Resignation plays into this as well because port unloading and loading is slower as there are less longshoremen to do this kind of work.
As far as housing goes, that's partially because of all these trends above but also because a bunch of folks from places like San Francisco or New York, who make a fuck ton of money, can now move to wherever and buy houses across the country for much higher prices than the people who live there can afford, so they push up housing prices for everybody and then there's a knock on effect. You couple that with the cost of housing materials skyrocketing and people wanting more space for houses thanks to the proliferation of remote work and you have a recipe for very high housing prices.
From what I can gather, the inflation we're seeing right now is a combination of a lot of things, mostly caused by covid and acceleration of trends that have existed for a while.
In terms of general inflation of goods, most of this inflation (contrary to what a lot of people want you to believe) is not caused by the Fed printing a shit ton of money, stimulus checks, or any of that. It's in large part "real" because the price of shipping goods from around the world has gone up tremendously. Thanks to covid shutting down ports and more people shopping for things online, transporting goods becomes more expensive. A lot of those "goods" aren't consumer goods but parts for factories and things like that. So even if your item is made fully in the US, if a machine in the factory breaks and you need to order the replacement part from China, good luck. It costs more and takes longer, and that is then pushed on to the price of the underlying good.
This is exacerbated by a particular supply glut in semiconductors, which are now in everything from cars to toasters to your cell phone. Semiconductors are incredibly difficult to make, are made by machines worth millions of dollars, and there's like two companies in the world that can make them at all. The supply of those semiconductors, as more people want to buy cars and other things, is heavily constrained on top of already skyrocketing prices of logistics.
Couple both of these trends with the trade war with Russia, which supplies a lot of fertilizer and precious metals for things like semiconductors and consumer goods, and you have a crazy inflationary environment. Once inflation starts going, it's hard to stop as people come to expect it, which causes prices to rise further. The supply chain issues won't clear up until 2024 at the earliest, when more container ships being built right now come into service, and that's predicated on covid not continuing to shut down ports. Likewise, the Great Resignation plays into this as well because port unloading and loading is slower as there are less longshoremen to do this kind of work.
As far as housing goes, that's partially because of all these trends above but also because a bunch of folks from places like San Francisco or New York, who make a fuck ton of money, can now move to wherever and buy houses across the country for much higher prices than the people who live there can afford, so they push up housing prices for everybody and then there's a knock on effect. You couple that with the cost of housing materials skyrocketing and people wanting more space for houses thanks to the proliferation of remote work and you have a recipe for very high housing prices.
kickass response, thanks, this is exactly what i was hoping i'd get
:sankara-salute: