Common_Monk_6301 t1_iufpob2 wrote on October 30, 2022 at 11:43 PM

Generally I don't agree with Krugman, but Yellen is simply not looking if she can't see it or she's looking only at lagging indicators that are more or less still positive at the moment. I think the Fed may be actually trying to start a recession as a way to moderate inflation and reset the economy. At the very least their policies are not friendly to economic growth which if miscalculated would lead right into a recession.

Also, Yellen has been severely wrong very recently on the issue of inflation. Not that that makes her wrong on this topic, but she's not infallible on the big issues.

https://www.bloomberg.com/news/articles/2021-10-12/yellen-sticks-with-transitory-view-of-higher-u-s-inflation#:~:text=Treasury%20Secretary%20Janet%20Yellen%20stuck%20with%20her%20assessment,pace%20of%20price%20gains%20to%20return%20to%20normal.

eddie7000 t1_iugew30 wrote on October 31, 2022 at 3:01 AM

There's a decoupling underway, from China and their cheap labor, which requires higher prices and lower demand in the short term. Higher prices will stimulate producers to expand their factories etc,,, and lower demand will happen because supply will continue to be well below where it would otherwise be, forcing low income consumers out of the retail markets.

So inflation is the correct course of action as far as global politics is concerned.

But a recession is highly unlikely as the capital investment required to restart domestic manufacturing will create a new economic boom as all the extech workers pick up shovels.

TLDR: America always wins.

Side note: Don't worry, be happy.

Flynn_Kevin t1_iui6zw4 wrote on October 31, 2022 at 3:00 PM

Whoa intelligent, succinct discourse. I dig it, and it's spot on.

>So inflation is the correct course of action as far as global politics is concerned.

Also agreed, but with caveat. Pump is primed at the top, it's time to open the floodgate for wages at the bottom 75% of the curve. It won't work if the masses making the products can't afford the products.

And on that note, we need a burn mechanism; i.e. taxes that support current operations and future growth. Start by removing the income cap on Social Security taxes. Reinstitute income tax rates like in the mid 1930s, and treat stock compensation like income, not capital gains. Eliminate the national debt.

>TLDR: America always wins.

First mover advantage with nukes and favorable geographic location FTW. We wrote the terms for WWIII at the end of the WWII.