My salary is $25k higher than it was in 2021 and I have less disposable income than I did back then. It's insane.

I hear you. It's tough out there, getting tougher all the time. Fingers crossed that the rate-racking the fed is doing helps slow it down a bit. I talk to my family about it all the time -- we're very lucky where we're at. We wonder how many people are managing to keep food on the table with these prices and the inability of wages to keep up.

My mom works at a donation center focused on veterans, and they give out food several weekends out of the month. They're breaking records for visitors every month now.

> Fingers crossed that the rate-racking the fed is doing helps slow it down a bit.

Along with finger crossing and hoping, we could look for causes of price increases, and then force the politicians to end the inflation-inducing military conflict in eastern Europe.

If this inflation is the price of liberty for Ukrainians and the price of independence from a dictator for Western Europe, then I am willing to pay that, personally.

I just don't think Ukraine explains that much beyond natural gas prices going up, as far as I'm aware, and even that I suspect is limited to Europe. (I am in the US).

I agree with you that it would be worth it, but it's also definitely not what caused inflation.

Historical timeline of USA central bank rates and world events:

March 3, 2020 -50 basis points

March 14-15, 2020 -100 basis points

Feb 19 2022 Zelensky speech puts in question 1994 nuclear disarmament agreement

Feb 20 2022 VP Harris in Munich encourages Ukraine entry into NATO, "So I respect President Zelensky’s desire to be a member of NATO."

Feb 24 2022 Russia in to Ukraine.

March 15-16, 2022 rate increases begin

Zelensky nuclear ambitions speech translated: https://kyivindependent.com/zelenskys-full-speech-at-munich-...

Harris talking about Ukraine joining NATO: https://www.whitehouse.gov/briefing-room/speeches-remarks/20...

Something can happen in the world and not be the causation for the other. It's totally possible.

It is possible. What other event caused Federal Reserve to suddenly raise rates in March 2022?

(somewhat) interesting question, it might be worth discussing sometime

anyways, do you have any evidence for the causality you suggested here? so far it hasn't been very convincing

keep in mind, as you make your case, that most posters here are smart enough to not fall for a "post hoc ergo proper hoc" fallacy

Federal Reserve is a private contractor to USA and sets the price of money (interest rates). Their recent statement timidly implied the war is causing inflationary pressures. As a contractor, they can't directly tell the White House to 'knock off the warmaking' so they wrote 'international developments'.

https://www.federalreserve.gov/monetarypolicy/files/fomcminu...

Page 9: "Members also agreed that their assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments."

If you like to read books, this book about Russia has amazing references including FOIA documents. https://www.barnesandnoble.com/w/the-plot-to-seize-russia-ma...

you're saying you think that quote means russia's war on Ukraine is causing inflation?

if so, it doesn't – not only does it not even mention russia's war on Ukraine, it doesn't even mention a rate increase, much less a correlation between the two

not only THAT, but you conveniently ignored all the 4 other factors they listed first

and before you go down the conspiracy theory route of "X can't/won't say the REAL truth but I'll tell you what it is", a lack of evidence for a theory isn't evidence of the theory, and while I'm sure you're a great person, your word in this situation is unconvincing

Trump both railed against the low rates at the end of the Obama presidency and then railed against raising them when he took office. The idea that it was a sudden event that caused rate hikes is only seen by someone not paying attention to it for a decade.

Lok at the big rate cuts in 2020 because virus. Out of nowhere seemingly, actually a few weeks after Ukraine fighting started, the Fed hiked rates. The Fed knows war is inflationary and jumped into rate hiking.

People have been talking about the need for higher interest rates for a decade. 2020 happened and they dropped them, again. That caused the people saying we needed higher rates to continue to say we need higher rates. The fact they were so low for so long is the anomaly.

By the time the war in Ukraine began, people had been arguing for months that the Fed was waiting too long to increase rates, that inflation expectations were becoming unmoored, that the Fed's conclusion that inflation was "transitory" was incorrect.

Here's Larry Summers from November 2021[0]. Note that his argument there is that the "transitory" inflation argument had already been shown to be incorrect, because by three months prior to the beginning of the war in Ukraine, inflation had already been progressing for months, along with the will-they-or-won't-they debate over rate increases.

Here is a Fed statement from April 2021[1], which I think is the first one that uses the word "transitory".

Point being that no, the rate hikes that happened a few weeks after the war started in absolutely no way came "out of nowhere seemingly". Everyone had been talking about it for a year.

0: https://www.washingtonpost.com/opinions/2021/11/15/inflation...

1: https://www.federalreserve.gov/newsevents/pressreleases/mone...

Do you remember that thing that happened where people started getting sick from a novel disease and then most people were told they needed to stay home for a few months and not consume any services and then that caused a huge number of people to be laid off and then that caused the government to inject a huge amount of fiscal stimulus to recover from all of that and then suppliers underestimated the pace of demand recovery and underinvested in supply and logistics to meet that demand and then that resulted in a bunch of ripple effects in supply chains? No? You missed all that?

When evaluating inflation levels the Fed as a matter of policy uses a price level measure that doesn't directly account for food and energy costs.

> Zelensky nuclear ambitions speech translated: https://kyivindependent.com/zelenskys-full-speech-at-munich-...

I must be missing something because I cannot see a single part in there that says Ukraine wants to acquire nuclear weapons.

All it says is that Ukraine willing gave up nuclear weapons in exchange for security guarantees (from the US, France and Russia) and that those countries are not really abiding by the agreement.

If you could quote part of the speech that mentions Ukraine wanting nuclear weapons that would be great.

unfortunately, no matter how much we want the conflict to end, it won't without the commitment of russia to end it, which means withdrawing their Ukrainian-toddler-raping troops* from Ukraine and ending their attempted 3rd russian genocide of Ukrainians**

* - per a UN investigation

** - with the Holodomor and the deportation of the Crimean Tatars being at least 2 previous russian genocides of Ukrainians

What worries me is this "we're lucky" sentiment is only temporary. In my situation, if my pay drastically changes due to emerging technologies causing future job cuts and order of magnitude competition over jobs, "we're lucky" can turn to "we're worried" in a year and "we're screwed" in 10... if "we're lucky".

Compound that with property taxes: I just heard a neighbors condo's taxes go up from 8k to 18k in a single year.

> Compound that with property taxes: I just heard a neighbors condo's taxes go up from 8k to 18k in a single year.

This must be a special case of not having the correct assessed value, or an error and they are including condo association costs in their property tax.

Even at a 3% property tax rate, which very few Americans have, a $10k increase means a $333k increase in assessed value for a condo. 1% to 2% property tax rates are more likely, which would mean a ~$667k increase in assessed value.

In my own situation, it's gone from "we're blessed" to "our kids generation is fucked" in the span of 5 years.

If you think this is bad then you should have been around in the mid-70's to early 80's after Nixon unilaterally bended Bretton Woods and threw the global monetary regime into chaos. I still remember mortgage rates of 12% to 15% and lots of young families being shut out of the housing market - at the same time apartment complexes were being built everywhere. Sound familiar?

The idea that it was worse back then has been thoroughly debunked. The unfortunate truth is that property values have soared (due to lack of supply), inflation continues as it does, and wages have totally stagnated. Those combined together mean that however bad it was for families back then (and I'm sure it was bad! Housing insecurity is something folks should never have to face, and I'm sorry you went through it too), it's just worse for people today, full stop. This isn't the oppression olympics, I don't want to tell you that you didn't have it bad, or anything like that. But it just sucks to be facing a very real problem today and have people incorrectly tell you that it was worse before. Not only does the existence of a problem 50 years ago not negate the existence of a problem today, but people in politics and on the internet want to tell us that it's not as bad as we think it is, when in reality it's much worse than they think.

You're only looking at one aspect - housing. What's missing in this analysis is that fuel costs had risen 400% in a very short time frame, and in an economy that was much more fuel-dependent than it is today. Imagine if gasoline were to rapidly rise to over $12 per gallon? Natural gas was even worse, we had actual shortages, so you can imagine what that did to the market. I still remember the president of the United States addressing the nation from the Oval Office wearing a cardigan to set an example that it was okay to turn the thermostat down and bundle up. The speed limit on the interstate had been dropped to 55 MPH to encourage people to driver slower and conserve fuel.

Housing was just yet another problem at the time.

The problem with housing today is an amazing lack of foresight from our so-called leaders then. Everyone accommodated the Boomers (I'm Gen X). They didn't have enough houses for the Boomers - let alone the kids the Boomers would have (the Millennials) who would be living as adults at the same time as their parents. There was a rash of home-building in the 40's, 50's and 60's, and then it slowed way down, never to reach those levels again. Meanwhile, advances in healthcare increased people's lifetimes, exacerbating a housing shortage that all the experts were warning about even back in the 70's and yet nothing was being done about.

I say all this to say I see the same thing happening with the climate "debate" today. We know what's coming. What know what the economic impacts are going to be. But we sit and equivocate and do nothing. If you think today's housing crises is bad, wait until you see what hits us in 30-40 years!

Funny too how the ever-vaunted market failed to solve the housing issue...but that's a story for another time.

That's what always happened in Argentina. Government prints money so they have more to spend, but it's not without consequences. Then they blame businessmen for the rising prices, and uneducated voters believe them.

And now with the US media promoting insane ideas like 'modern monetary theory' it may become more common.

I believe this setup works (until it does not, but does work for a very long time) in Argentina in large part due to currency controls making it hard to purchase dollars.

Should the same high-inflation state come to the US it would be a very interesting state (technically interesting, not meaning this in a nasty "I plan to watch this show from the outside" way). With current opportunities to easily move between the dollar, other currencies, gold, BTC, etc. should the high (20+%) inflation expectation become entrenched the government will find it hard to force people to buy dollars.

When anyone can move a large hedging sum from dollar to Swiss franc or Norwegian krone, forcing the local citizenry to buy rapidly depreciated fiat is virtually impossible. My 2c.

Democtrats may be already evaluating the benefits of currency controls.

I am sure they are, but with the options built up during the globalization it will be much, much harder than in Argentina (Cuba, Soviet Union, etc.) in the last century. Not impossible, but very hard.

Also, after three decades of globalization currency controls will hit virtually every business, so this will likely be broadly unpopular. Again, not impossible, but I personally view it as very unlikely without dictatorial powers held by one, or a very few, strong individuals. But we shall see...

Exactly. People are only trying to keep up with inflation created by easing monetary policy and supply-demand imbalances during COVID and post-COVID.

People keep repeating this like this is a self-obvious truth. Both of these factors are long gone. IMO, there are two major components to inflation.

1. The war in Ukraine spiked energy and food prices. People don't fully understand how fundamental energy costs are to prices. Energy costs are X1% of the cost of a good, X2% of the cost of the parts in that good, X3% of the cost of the materials in those parts, X4% of the factory and tooling, X5% for transport of all those goods, parts, materials, tooling, et cetera.

2. Housing, which is a systemic issue that far predates COVID.

Energy/material costs and money-printing are not unrelated, in that the latter is being used to paper over extremely worrying trends in the former. 2008-induced QE and covid-induced direct payments are both can-kicking strategies which do not address underlying problems, just temporarily plug leaks in the facade.

And temporarily plugging leaks was exactly the right thing to do during a temporary world-wide crisis like COVID.

I make no claim either way on that, just responding to your other point on inflationary forcings.

You forgot corporate profiteering. Even the Wall Street Journal now admits it: https://www.wsj.com/articles/why-is-inflation-so-sticky-it-c...

Congratulations, you sound like a standard Argentinian politician now. Trying to minimize the impact of increasing the money supply.

If we are talking about the US, I really don't think (1) was a big contributor. Perhaps ironically, the energy price shock in the early days of the war in Ukraine was the thing that actually was "transitory". (I think this is likely less true in Europe, but I haven't paid as much attention to that.)

Oil prices are global.

Oil prices are not particularly high and have taken actual effort by producers to cut down production.

Ofc, they are higher than during pandemic, but still not really that high.

And yet, this does not contradict what I said. Oil prices, and thus gas prices, did go up quite a bit in the US, but that was clearly "transitory". Certainly this had a large impact on the perception of inflation, since gas prices are very visible. But high gas prices didn't last very long, went up well after inflation had taken root, and went back down well before inflation had begun to ease.

I think it's possible that other energy prices (like natural gas, which is not a global market) may have driven inflation outside the US in a more meaningful way, but like I said, I'm not sure that's true either because I just haven't followed that so much.