Welcome back. There's no other drum to beat.
RBA
- Thread starter mmm....shiney!
- Start date
I came back to see if you still think inflation is transitionary and if running massive government deficits into full employment and an every growing bureaucracy is not adding to inflation?
We don't have full employment.
Now, as long as governments keep responding to inflationary pressure with outdated monetary policy strategies, and as long as supply chains keep being disrupted then we'll have inflationary price pressure over and above what is consistent with long term monetary inflation expectations. The initial period of inflation due to COVID was transitory, it did last longer than expected but inflation dipped. As soon as the supply chains were restored the resource constraints that led to higher prices saw prices fall, lettuce were $6 each now they're $2 - $3.
Then we've got dickheads in the USA and Russia starting wars, this has produced another round of supply constraints which has seen energy prices surge, add to this a level of migration that has not been matched by an increase in government spending to meet the demand for services and we've got inflation again.
Labor has done an awesome job in trying to end the gravy train for investors that has seen housing skyrocket in price and become unaffordable for many sectors of society. Hopefully this translates into rents rising more slowly, a down turn in share market activity as well thanks to the new rules again CG which could possibly see investors putting funds into productive activity instead of the droll that has been happening for the last 30 years or so. Unfortunately the RBA is a dinosaur and every rate rise just adds another percentage point or so to inflation, it's entirely self-defeating but mainstream economic thinkers (like yourself) can't understand that.
You're insistence that deficits lead to inflation is indicative of your ignorance of the history of inflation and your lack of understanding of how deficits function. I can show you graphs that prove there is no direct link between rising government deficits and CPI but you're going to ignore them anyway.
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