Monetary Inflation and Price Inflation

[Occam's Banana]

h/t Rob Henderson: https://twitter.com/robkhenderson/status/1459912600070852619

Step 1: It's not really happening.

Step 2: Yeah, it's happening, but it's not a big deal.

Step 3: It's a good thing, actually.

Step 4: People freaking out about it are the real problem.

 

[Firestarter]

There can also be price inflation, without increase of the quantity of money...

It's very easy, first they destroy the environment, then come up some story of a threat caused by carbon dioxide, then stop pumping up gas, claiming that there's enough "sustainable" electricity.
And boom - gas prices increase 3 to 5 times around the world.
.

You must have heard about the recent five-fold price explosion of natural gas across the globe. You probably didn't hear from our wonderful media that this was planned, with the coming famine of the poor all across the world as a result...

Natural gas is used to produce agriculture fertiliser production. Ammonia-based fertilisers made from nitrogen and natural gas (a.k.a. methane, CH4) make up almost 70% of all fertilisers used by farmers.
Some 80% of the cost to make these fertilisers is from natural gas.

On 25 August, the largest ammonia factory in the world, owned by CF Industries, was closed for 10 days for "safety reasons". On 22 September, CF Industries announced that 2 more fertiliser plants would close. These 2 plants supply two-thirds of the UK's fertiliser demand.
The Biden Administration in August sanctioned Belarus, including Belaruskali OAO, the fourth largest fertiliser producer in the world.

Since early October, ammonia fertiliser factories were closed all across Europe: BASF in Belgium and Germany; OCI in Netherlands; Fertiberia in Spain; Borealis AG in Austria; OPZ in Ukraine; Achema in Lithuania.
Yara International is reducing 40% of its EU fertiliser production. Germany’s largest ammonia producer, SKW Piesteritz, has cut production by 20%.

Enslaved-by-World-Bank-and-IMF#post7071849

 

[Madison320]

Yes, it goes back to Dubya. Or Nixon, and Bretton Woods. But it hit Warp Speed under Trump.


Interesting how the names of Republicans keep coming up, isn't it?

That's a chart of M1 which includes velocity, which no one has any control over.

The important thing is the balance sheet, that's the total amount of printed money, when you look at that, Obama and Trump both created 3.5 trillion, so far Biden has .5 trillion, and all the previous presidents in history printed less than 1 trillion combined.

https://fred.stlouisfed.org/series/WALCL

 

[acptulsa]

Obama and Trump both created 3.5 million...

M? I suspect that should be a T.

 

[ClaytonB]

There can also be price inflation, without increase of the quantity of money...

While this is technically true, it's almost completely irrelevant in a central-banked economy. In the absence of a central bank, the purchasing power of money (PPM) fluctuates in response to both supply of money (mining, minting, political money flows, etc.) and demand for money. When a territory is politically stable and experiences low external threats, the demand for cash balances will (all things equal) tend to go down, because people feel less need to keep cash on hand to self-insure against "tail risks", as Bernanke put it -- a polite way of saying war, invasion, famine, plague, etc.

But in a central-banked economy, the effect of the printing-press swamps out all other economic variables -- the inexorable, secular rise in the price of all goods across the entire economy, year-after-year, is the direct result of the central bank running the printing-press 24x7. Fluctuations in demand for cash balances are minuscule and, in any case, the regulatory environment does a good job of chasing people out of cash by simply making it too much of a hassle for casual hoarders to bother.

 

[Madison320]

M? I suspect that should be a T.

oops!

I'm old. Yesterday's millions are todays trillions.

 

[acptulsa]

I'm old. Yesterday's millions are todays trillions.

And not worth a penny more.