Part of it is oil and gas supply going down because of war and since producing anything requires energy, prices are going to go up regardless of the money supply.

Inflation was 8.5% before the war started, it's now at 8.3%. I don't think your premise holds.

Yeah but it does not look like the war is going away anytime soon. In case you missed it, russia partly mobilised today.

So parent seems right refuting this claim:

> since it seems it's been absorbed perfectly by the global economy.

Uh no. Oil and gas supply went down due to presidential mandates. Biden's “pause” on federal oil and gas leasing and drilling permits. And any new permits that might be approved on public lands had royalties increased from 12.5% to 18.75%. A 6.25% increase on production.

You can look at oil prices when the war started and see the jump. There was no such jump at any announcement of Biden. The evidence is clear and easily checked.

Inflation is not the change in size of the money supply.

Inflation the broad-based change of purchasing power of the dollar by proxy of a basket of goods and services. This is a function of many, many things - cultural norms, commodity prices, labor supply, fiscal policy, supply chain efficiency, interest rates and yes, to a degree, monetary base.

It’s complicated, therefore supply doesn’t matter for money, only demand?

I think you’ll need to do a better job convincing me than that.

I'm not convincing you of anything, I'm sharing that your definition of inflation is not the definition generally accepted.

Money supply growth is not inflation. Inflation is a broad-based reduction in purchasing power caused by any number of things. By definition.

Here's why. A 50% sales tax would be inflationary without changing the money supply. Conversely, a trillion dollar coin minted and put into a vault wouldn't have any inflationary effect whatsoever because placing it into the vault has a commensurate reduction in velocity.

The idea that 'more money' necessarily immediately means each unit is worth less doesn't stand up to any scrutiny and many counterexamples exist all over the world - and at home. Just look at Japan's monetary base expansion since the 90s [1], while inflation was dead flat zero [2].

Your model is too simplistic which is why it is not generally accepted.

[1] https://fred.stlouisfed.org/series/MYAGM2JPM189S

[2] https://fred.stlouisfed.org/series/JPNCPIALLMINMEI

Nobody is claiming that inflation is only caused by printing money. You’re straw-manning.

What we’re saying is that everybody knows supply and demand affects money, also.

And if you’d like examples of hyperinflation from over-supply of money, you can just look around.

I was replying to this.

> It’s complicated, therefore supply doesn’t matter for money, only demand?

I never said supply doesn't matter. Re-read my initial reply. ("... and yes, to a degree, monetary base").

Money in a modern centrally banked economy enters the system on a pull model - not push. Banks don't push money into the system. Borrowers create money when they take out loans and that money obtains its value from the obligation to repay the debt that created it. Once repaid, that money evaporates. Money is always being created and destroyed, which is how interest rates control supply of money through demand of loans. This means supply follows demand so it's harder to devalue due to supply increases as a supply increase inherently follows a demand increase. In ordinary course, when not subject to interventions.

> And if you’d like examples of hyperinflation from over-supply of money, you can just look around.

Hyperinflation isn't what happens when the money supply increases a lot, it's what happens when the population rejects the currency and is usually tied to an exogenous event like a war, corruption, regime change or onerous foreign-denominated debt. Most often a combination - it's a completely different beast. [1] Folks conflate the two because "hyperinflation" sounds like "inflation but more!" - the increase in money supply is a symptom, but it's not the cause. It's effectively an economic and monetary collapse.

I'm not sure you'll be able to actually find an example where oversupply of currency in isolation led to hyperinflation, but if you can find an article demonstrating a causal relationship I'd love to read it.

[1] https://www.businessinsider.com/the-truth-about-hyperinflati...

> So that's why we're getting 8-9% inflation rates? Because of the perfect absorption?

Not to mention the massive asset price inflation.

Greed seems to explain it easily enough.

The macro-economy is solely for the wealthy and when they need a billion or more to see a return on a billion or more, shrinkflation and price increases go up; hard to make a billion back on long time scales at 2010 prices.

I’m not saying they intentionally operate on that philosophy. I’m saying reliance on data trends means they prioritize responding to data regardless of the externalities to the masses.

Only the rich can afford assets so assets are priced for the rich.

Are periods of low inflation thus caused by elites being less greedy?

Yes. Powell is on record saying he wants the public to save and not trade on the market. He wants bonds to go up. He wants salaries to stop going up. If everyone is flush in assets from having cash to spend it fucks up the game for establishment elites.

He’s keeping the public out of the way of elites. Banks are raising savings account rates to keep cash stashed. VCs are scaling back. Prices on say, homes will crash, rates will be too high for average people, elites build property management portfolios and expand their rent seeking.

The recent era of spread the wealth has been put on pause while the asset class shores up public agency that was getting away from it by creating too many elites. If everyone is an elite the current elites have no power. That’s the simple game they’re playing, leveraging technical indirection to obfuscate.

That's not how any of this works. Yes, the fed sometimes wants the economy to slow. This is not because of some global conspiracy to make poor people poor, it's because if they don't now they are putting it off to be much, much worse in the future. It's letting off steam so you don't explode. Interest rates rise to try and combat inflation because if you don't it leaves people starving.

Rates should have gone up years ago, but a stubborn fed kept putting it off (and COVID didn't help either). The Fed does not benefit from everyone being poor. And I'm someone who thinks cynically all the time, check my post history, but this is just uninformed.

Even Powell has said they are realizing how little they know about how inflation “works”.

Claiming I am uninformed because I don’t recite the spoken traditions that even the expert in charge admits to not fully understanding is just regurgitating memes from memory; you don’t come off well informed, but like a skipping record.

They don’t have an incentive to NOT keep people poor either. They don’t really care since they’re going ahead anyway with policy they admit will hurt households; deny it again, please. I need a laugh.

The outcome will be one of making cars and homes harder for poorer people to buy; Powell admitted that today and at every other rate hike. He’s testing “what the market will bear”.

Human biology rules us, not social principles hashed out on paper. See my comment history. The result will be clear; haves will be able to afford buying up assets as prices come down. Have nots will be priced out.

Don’t forget too our Congress refuses to deviate from our social history. The Senate was described by Madison as a firewall to protect the opulent minority from the majority. You can carry on that’s “not how it works” all you want. But “on the ground” the result is clear.