Consumer prices rose five percent year over year in May, the fastest pace since August 2008 and higher than Wall Street expectations. Stephanie Ruhle discusses.
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Consumer Prices Jump Five Percent From Last Year | MSNBC
This is what happens when you add trillions of dollars to the money supply. We’re lucky it isn’t much worse.
@Reason If the money is not utilized, it cannot result in inflation. Wealth doesn’t cause inflation, but it could cause taxation issues, which it currently is as the wealthy can choose to borrow to bypass that taxation. They currently are. Again, if you claim that money not utilized in the economy causes inflation, you MUST believe that wealth causes inflation as wealth causes the government to borrow money, but you aren’t claiming that, and you never will, which is why the concern is irrational.
@Ronald King: Actually I’m not claiming ANYTHING you’ve said. The money from the stimulus WAS utilized in the economy. I think you are conflating monetary policy with fiscal policy here. They are two different things. How the government taxes and spends is FISCAL policy. I’m talking about monetary policy. (Basically the role of the central bank).
There are three major causes of strong inflation: (Inflation RATE)
1. Money Supply. An increase in the money supply — that is, a government literally printing money — can provoke inflation if it outpaces economic growth. When the U.S. Federal Reserve (the Fed) puts money into circulation faster than the economy demands it, the value of a dollar goes down. Think of dollars in this case like collector’s items: The rarer they are, the more valuable.
2. National Debt. When the national debt is high in relation to how much income a country can generate (GDP), a government can either raise taxes or print more money to pay it off. Higher taxes mean higher costs for producers, which leads to higher prices. Printing more money increases the money supply and devalues the currency.
3. Exchange Rates. In a global economy, the value of the U.S. dollar compared with international currencies affects prices in the U.S.. When the dollar is less valuable compared with a trade partner’s currency, imported goods cost more to U.S. consumers.
Each of these can happen regardless of consumers’ income and tax rates. If wages don’t increase, but the money supply, national debt, or exchange rate drives prices up, U.S. consumers become less able to buy stuff, which can stall or slow economic growth.
@Reason No, if all supply chains are dependent on a product, which all supply chains are dependent on fuel, then the price of fuel will determine an inflation rate.
If I increase my actual money supply by 5%, but no one uses the money then the real money supply did not increase at all. My point is that you are claiming that the real money supply went up by large amounts. It went into larger corporations so that people could get basic goods and for those that could get basic goods otherwise, they kept it in their savings accounts. Real money supply didn’t go up, but you are advocating that actual money supply causes inflation, and as such, you have to advocate taxing wealth. I advocate taxing wealth as a way to lower interest payments on a money supply that is not really needed, and as such, government can supply more services.
@Ronald King: But people DID use the money and again, you’re trying to make this about taxes (FISCAL policy) which I’m not even remotely talking about.
Look, I think I’ve explained myself adequately. Think whatever you want. Have a nice day friend.
@Reason Second thing, which I did not put into the other one. Amazon and Walmart will be pulling more workers in since their demand was artificially higher, but the problem is that it was not higher than what all sources would have been otherwise. UPS and FedEx have higher demand in labor, but that demand was taken from things such as brick and mortar. This is the major problem that businesses that have typically lower wages cannot find workers, but the situation if the stimulus did not exist is that those workers would have been unemployed, which would have also increased the costs of the government and as such, the government would have been borrowing the money anyway.
The dollar is worth less
Which makes it a great time to buy DOGECOIN.
Saying it’s good to rob people of benefits because employers won’t pay a living wage to people who need it is shameful And disgusting. Maybe MSNBC should put this much visibility on a living wage instead. Shame.
The fact that these people are smiling about this says it all.
Bad news sells.
Supply chain issue caused by the pandemic. Remember that demand was way down during most of pandemic…
The American people will NEVER forget what the shameful Democrats have done to America
Most of the country’s been wide open since last May this is Biden’s issue he drove the inflation the where it is with his policies
Demand for groceries actually went up, as people were no longer going out to eat. Food suppliers had to adapt to packaging food for individual consumption, rather than restaurant consumption. They also had to deal with infection issues, as those doing the packing were so close together the virus swept through packing facilities. Those adaptations cost money.
@Deborah Freedman nice try but people weren’t eating any more or any less they were still consuming products
@William H Music 2021 – you know, you wouldn’t be such an obvious troll if you occasionally made a post that addressed the topic at hand or even made sense…
Tell that to all the millions of people who will be evicted at the end of this month. How about some transparency in your reporting?
They have been talking about it! Matter of fact, they’ve been talking about evictions for over a year now. It’s not a new thing. Stop attacking the media for not doing something they have actually been doing for over a year.
@J the media are the cancer in this country……..so how about NO
THERE’S A BUNCH OF PEOPLE RAISING PRICES TO TRY AND MAKE SOME MONEY…THEY FEEL LIKE THEY’RE OWED SOMETHING FROM THEIR LOSSES FROM LAST YEAR.
There’s a lot of people in here commenting like they know economics when in fact they don’t, but they have to run with asinine talking points. They never mention the loopholes and tax exemptions of the wealthy. The fact remains that if our corporations don’t face regulation the economy will collapse under the weight of itself. Can’t keep taxing the poor, refusing to raise their wages and expect money to keep flowing. The well of the poor will dry up. The current system is shortsighted and vain. Only when America rejects it’s obsession with money and with men, replacing them with morality and truth can it really overcome. Anything less is a slow decent into the abyss. Also, all media is biased so long as they have corporate sponsors. The fact that this obvious fact doesn’t resonate with so many of our citizens speak the lack of quality education in this country. But keep sucking yourself off America, there’s no way that could backfire.
Explain how any of that causes inflation.
@Luis Rosales Taxes take the extra money out the by giving to the government.
Consumer prices up 5%…. Raise for Social Security 1.5%
And GQP is to blame. Only willing to spend money when they are in power.
@David Drake spending money is to blame for inflation
@John Trent Yeah it does. If they where not stupid and spent all the wasted money during Trump’s years we would not have much issue.
Yes…I can’t buy my particular can of my cat food due to production shortages.. Come on Royal Canin! Been trying different foods to no avail. My poor cat😔😤🤯🐈🙏
I go to the grocery store with my dad sometimes to get groceries like Carrot Cake Cookie Sandwiches and Cinnamon Bearclaws but i know Mika Brzezinski is on a diet so do i
Mike you mentioned Grocery i thought that was a metaphor for the week and of course Mika is probably avoiding cereal but at least she had a biscuit from Popeyes and truly wanted to throw away a bunch of cereal i don’t eat cereal anymore
Wow, listen to Stephanie. She made some excellent points.
@Reason we are not talking about debt…….We are talking about the money supply
@Ralph Sims: What do you think debt is? When the government borrows money they’re increasing the money supply. They are essentially PRINTING more money. It’s obviously more complicated than that because of the Fed’s bond buying/selling and liquidating process, but that is exactly what happens. We’re borrowing the money from predicted future growth in GDP.
When the government needs money they sell bonds to the Fed. The Fed doesn’t have those trillions of dollars in their vault. They CREATE the money either by liquidating debt (quantitative easing) or fractional reserve lending. They then sell those bonds on the open market and pay bond holders interest at a future date.
@Reason i understand how quantitative easing works and I understand that the debt did expand under Trump, however I think it’s safe to say that Biden has completely “blown off the top”
@Ralph Sims: As I said in a previous post; blaming one party or one president for an economic situation is short sighted. I know most people do it but everyone has their hand in the economy and not just the government either. In a free market, the private sector has more influence over the economy than the government. That doesn’t mean that the government’s monetary and fiscal policy doesn’t have effect, it does. I’m just saying that the factors which effect the economy are very convoluted and complex. It really isn’t as simple as “Biden did this” or “Trump did that”. There’s not even a prevailing consensus on which party is better for the economy amongst economists. You could point to many different things about each that are both positive and negative regarding their impact on any economic situation.
@Reason I never claimed that one party’s policy was better than the other. I was merely pointing out that Biden has been a massive exception.
So, is that a good thing or bad thing?
Prices of milk and eggs going up? So yank the money back from the very people who need to survive and give to who??
Covid seriously messed up things.
I remember $4+ for gas not that long ago. Food never comes back down. Too many middle men to pay and they are not going to cut profits. Screw the small farmers. So shop for your food wisely and boycott loudly when necessary.
Here in Texas where beef is king steaks are 17.99 a pound. No thanks I’ll just do without. Gas is still reasonable at 2.39 a gallon.
It actually shows how the US economy is built on the backs of low wage workers.
“For the next few months..”
“It will work itself out..”
Hahahahah, right. Keep urinating down our backs and telling us it’s rain.