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"rising fuel prices, gas prices, shipping prices, commodity prices and the opening up of economies is causing the global inflation rise. Its how countries central banks deal with it that counts." True, do you think that our “just in time” supply chain system would need to change? Does it expose the weakness of globalisation? Where manufacturing bases are further away? | |||
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"rising fuel prices, gas prices, shipping prices, commodity prices and the opening up of economies is causing the global inflation rise. Its how countries central banks deal with it that counts. True, do you think that our “just in time” supply chain system would need to change? Does it expose the weakness of globalisation? Where manufacturing bases are further away? " I think that would have to be a consequence. In time of course supply chains will improve.The maxim " in every crisis there is opportunity" will create ways for new businesses to start up . | |||
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"rising fuel prices, gas prices, shipping prices, commodity prices and the opening up of economies is causing the global inflation rise. Its how countries central banks deal with it that counts. True, do you think that our “just in time” supply chain system would need to change? Does it expose the weakness of globalisation? Where manufacturing bases are further away? " To be honest i dont have an answer but this rise in inflation seems to be driven by supply issues rather than the usual demand and so my guess along with ECB is that it will be temporary rather than long term. | |||
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"This is driven entirely by money supply and the resultant low interest rates. Central banks have been printing money willy-nilly since the 2008 banking crisis. It was meant to be an emergency measure but governments became addicted to it. It accelerated again with coronavirus. We all know of Weimar Germany, Argentina, Zimbabwe etc where inflation reached thousands of per cent thanks to printing money. Most countries in the West now have a lesser version of that. It has to stop" This is true and can done by the likes of the BOE and the US federal bank by raising interest rates but not so easy for the ECB as it would put an enormous financial strain on southern countries like Spain, Italy and Greece and so they have to try and balance the rise in inflation in their northern countries Germany,france,etc im not sure how they intend to do that. | |||
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"This is driven entirely by money supply and the resultant low interest rates. Central banks have been printing money willy-nilly since the 2008 banking crisis. It was meant to be an emergency measure but governments became addicted to it. It accelerated again with coronavirus. We all know of Weimar Germany, Argentina, Zimbabwe etc where inflation reached thousands of per cent thanks to printing money. Most countries in the West now have a lesser version of that. It has to stopThis is true and can done by the likes of the BOE and the US federal bank by raising interest rates but not so easy for the ECB as it would put an enormous financial strain on southern countries like Spain, Italy and Greece and so they have to try and balance the rise in inflation in their northern countries Germany,france,etc im not sure how they intend to do that." The ECB has printed a huge amount of money. Proportionately though it has resisted temptation better than the BofE. I'm surprised at that | |||
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"This is driven entirely by money supply and the resultant low interest rates. Central banks have been printing money willy-nilly since the 2008 banking crisis. It was meant to be an emergency measure but governments became addicted to it. It accelerated again with coronavirus. We all know of Weimar Germany, Argentina, Zimbabwe etc where inflation reached thousands of per cent thanks to printing money. Most countries in the West now have a lesser version of that. It has to stopThis is true and can done by the likes of the BOE and the US federal bank by raising interest rates but not so easy for the ECB as it would put an enormous financial strain on southern countries like Spain, Italy and Greece and so they have to try and balance the rise in inflation in their northern countries Germany,france,etc im not sure how they intend to do that." I understand that interest rates may increase to help reduce inflation but is that really needed given some of the reasons for current inflation. I was always told that the bank raises rates to effectively take money out of people's pockets (have to pay your mortgage before other things) which results in less spending, less demand and therefore prices level of. However this time inflation seems to be caused by things like fuel prices and other things you need to have as opposed to want to have. This in itself takes money out of people's pockets so less to spend on non essentials. In other words I think maybe these price rises in essentials is doing the job of an interest rate rise | |||
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"This is driven entirely by money supply and the resultant low interest rates. Central banks have been printing money willy-nilly since the 2008 banking crisis. It was meant to be an emergency measure but governments became addicted to it. It accelerated again with coronavirus. We all know of Weimar Germany, Argentina, Zimbabwe etc where inflation reached thousands of per cent thanks to printing money. Most countries in the West now have a lesser version of that. It has to stopThis is true and can done by the likes of the BOE and the US federal bank by raising interest rates but not so easy for the ECB as it would put an enormous financial strain on southern countries like Spain, Italy and Greece and so they have to try and balance the rise in inflation in their northern countries Germany,france,etc im not sure how they intend to do that. I understand that interest rates may increase to help reduce inflation but is that really needed given some of the reasons for current inflation. I was always told that the bank raises rates to effectively take money out of people's pockets (have to pay your mortgage before other things) which results in less spending, less demand and therefore prices level of. However this time inflation seems to be caused by things like fuel prices and other things you need to have as opposed to want to have. This in itself takes money out of people's pockets so less to spend on non essentials. In other words I think maybe these price rises in essentials is doing the job of an interest rate rise" It doesn't work like that though. It's supply and demand. When a central bank is printing money it means that banks don't have to compete for your money...so rates fall. They are a symptom, not a cause, of excessive money supply. When money supply increases but that money is chasing the same goods/assets then the price of those goods/assets will increase. That is, you have inflation. Caused by money supply. You may have increased wages but that need not be inflationary. It is only inflationary if the government panics and increases money supply. If money supply remains constant there will be no inflation and there may then be downward pressure on assets/prices/labour until they find their proper level | |||
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"This is driven entirely by money supply and the resultant low interest rates." Not true. Not all nations have low interest rates, not QE. We are a affected by global trade. | |||
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"This is driven entirely by money supply and the resultant low interest rates. Not true. Not all nations have low interest rates, not QE. We are a affected by global trade." The global trade doesn't create inflation | |||
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