Friday, June 3, 2022

Why Inflation Now....??? The Answer in 2 Graphs:

The Federal Reserve System is the central bank of the United States and conducts the nation's monetary policy. The primary goals of the Fed's monetary policy are to promote maximum employment, stable prices, and moderate long-term interest rates. The Fed also seeks to ensure the stability of the financial system.1

The Fed uses its balance sheet to help it accomplish those goals. The Fed decides what assets it holds, and whether to expand or shrink its holdings. When the Federal Reserve buys debt instruments like Treasury notes or mortgage-backed securities, it is seeking to increase their price and lower yields, while signaling a looser monetary policy to support the economy. Conversely, the sale of Fed assets is a policy tightening approach that constrains financial conditions and asset values.

The Federal Reserve has dramatically expanded its securities holdings to cushion the economic shocks of the 2008 global financial crisis and, later, the COVID-19 pandemic.2

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  • M2 A measure of money supply used by the various central banks. In the Federal Reserve System, M2 includes all physical currency and deposits in checking accounts, and adds to this the amount of money in savings accounts, certificates of deposit up to $100,000 (or their equivalents), and money market accounts.

16 comments:

  1. (((Thought Criminal)))June 4, 2022 at 4:13 AM

    A shit ton of retirees cashing out at the same time, low unemployment, ridiculous government spending levels, the retarded shift from global trade to isolationism without a manufacturing base, and profiteering from artificial supply chokes in a crisis.

    Biden should send the 82nd Airborne to the offices of Exxon and Chevron to kill or if necessary capture anyone wearing a tie that refuses to return oil extraction and refining to pre-Covis shutdown levels.

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  2. Our manufacturing "base" is fine... it's just not up to the unsustainable post WW-II globalist manufacturing "base" levels nor recovered from the irresponsibly mandated Covid shut-downs and re-oriented away from import choke-point like LA.

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  3. The government-inflicted inflation problem began with pumping hundreds of billions in Covid Relief funds to unemployed small business workers who weren't manufacturing or servicing ANYTHING for two years which created the "problem" of too much many chasing too few supply-chain choke-point sensitive imports.

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  4. erratum- 'money' for 'many' above.

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  5. (((Thought Criminal)))June 4, 2022 at 8:57 AM

    Yep. It was a "perfect storm" of unavoidable inflationary factors (baby boomers retiring en masse) and very avoidable government spending measures (trying to subsidize away the impact of tariff stupidity, trying to subsidize away the impact of Covid shutdowns, trying to stimulate a barely existent economy of mostly service workers with no products to serve...)

    My weekly trash pickup might come around every 3 to 5 weeks because of "lack of truck drivers" but they sure as shit have people manning the phones wanting to tell me the service will be delayed or wanting to know when I'm going to pay them for services barely rendered. The competitor trash pickup services are similarly backlogged... They have work, but no one to do it.

    It's a shit show, and I know there isn't just one factor to blame, but rather a whole damned bunch of problems that increment to the whole train wreck.

    The whole broken McDonald's ice cream machine writ large.

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  6. (((Thought Criminal)))June 4, 2022 at 9:05 AM

    Open the damned borders! Hell, take trucks down to Mexico and bring back 53-foot trailers full of workers. ;)

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  7. (((Thought Criminal)))June 4, 2022 at 9:08 AM

    The likely permanent damage to the US economy under Trump and continuing under Biden can not be understated.

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  8. Take your trucks to Sandtown in Baltimore. Not a single male in that Baltimore suburb has a legit job. They've all been written off as "surplus labour" that's "un-usable" due to having lived on the government welfare plantation for their entire lives.

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  9. (((Thought Criminal)))June 5, 2022 at 12:20 PM

    Nah, let's make sure they have crack pipes. We can worry about baby formula later ;)

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  10. Crack's untaxed beamish. How you gonna fund the government and it's plantation if you're encouraging untaxed enterprises like crack?

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  11. (((Thought Criminal)))June 6, 2022 at 11:06 AM

    I don't understand Democrat priorities. I just point at them and laugh. Or cry. Mostly cry.

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  12. "...irresponsibly mandated Covid shut-downs..."

    donald tRump's mandated Covid shut-downs...

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  13. You were the one claiming that Fauci was the medical authority, NOT Trump.

    btw-Did you ever get any bleech injections?

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  14. (((Thought Criminal)))June 9, 2022 at 10:49 PM

    Naw, he's a syphilis and antifreeze junkie.

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  15. I still don't quite grasp all of this....I guess economics aren't my forte!! Thanks, FJ! xx

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