Asia FX news wrap: Evergrande kicks off 2022 with more problems

[md41]

The question is not whether inflation can be stopped. It is do the people want it to be stopped. The answer is NO

[food]

Inflation is good for the producers and bad for the consumers.

[nice]

They're talking about run-of-the-mill inflation driven by wage-price spirals, and saying that's how you get an inflationary spiral. In my mind, that's not the only way. We have a fiat currency and it's value is really derived from people's faith in it's value. You can print money and encourage borrowing etc, but much like stock market bubbles, there is a tipping point in there when all the feedbacks turn from negative to positive.  Normally, you hold money, it holds it's value, there's no real push to gain or spend it. If you think inflation is going to increase, it now becomes a hot potato that you want to spend as soon as you get it. You do this by buying useful assets like houses, land, food, things you need. When everyone does this it drives up the price, which would normally dampen demand, but if the expectation that money will continue losing value and the price will only increase, then the price doesn't matter anymore. Sellers can ask arbitrarily high prices. But who's going to sell into this and accept that money? Thus supply goes down at the same time demand goes up, further exacerbating the situation.  The government has been pumping new money into the economy to try and stimulate it, yet velocity stays low. Who needs to spend all that money under normal circumstances? But what happens when it all starts losing value? All that "cold" money suddenly turns hot, and the *effective* money supply suddenly increases. Meanwhile, everyone is also incentivized to borrow as much as possible to "short" the currency, further increasing the supply. But who wants to lend into this? The credit market slows, and the government steps in as "lender of last resort" again....using printed money.  Meanwhile, the massive amounts of money tied up in the stock market suddenly need a new home. I mean, who wants to hold a stock when all you can get out of it is increasingly worthless money. You paper gains are impressive, but it's only a reflection of the fact your asset is losing value, because the only value it has is denominated in dollars (rather than any kind of tangible use).  I mean it goes on and on. Wage-price spirals may be a part of 'normal' inflation but they don't really play into hyperinflation.

[jost]

N O

[haaf]

They are currencies

[sly]

Huh.  This is the one problem that can't be resolved right away.   It will take years and no legislation will be able to fix it

[cere]

am i about to watch another 20 mins  that concludes with "time will tell"?

[TGPX]

Lol at the people who took out mortgages and bought homes in the middle of nowhere thinking they can work from home forever.

[hick]

Houses have double in price in two years practically. Thats hyper-inflation. Plus how is housing only 31% of CPI when it accounts for more than half our paycheck.

[xin]

Thanks to I got my  credit score fixed up,and I got the check of $7k delivered yesterday,you are the best to deal with.

[dys]

Transitory?? More like Up & Stuck

[keo]

NO! the USA is simply insustainable the cost to live as we do is too much, borrowing to pay debts has never help anyone in debt.

[otch]

Everything is a buble..

[Zypk]

This is price gauging, not inflation. This is an issue supply and demand.  Supply changes are always difficult to master and it is hard to meet the demand.

[hylo]

Friday CPI report is going to be a bloodbath for the market