cross-posted from: https://linux.community/post/512445
my bet is: as long as we need to completely transition to renewable transport, because everything we eat, build and wear needs to be transported and most of us don’t work from home or study from home:
oil prices are high because that’s what putin can use as leverage against the developed world after his failed annexation of Ukraine and it’s clear he’d rather die than accept Ukraine is an independent country. Global warming makes a transition to renewable energy inescapable and even if putin died today and Russia opened the taps again, it would only slow down the transition.
But holy shit, it’s gonna be hard and expensive, it’s going to take decades and every populist politician of both left and right is going to fight it. My bet is 2 decades.
What do you think?
Until they stop printing money and devaluing the dollar…
Too many people think inflation only means price increases. That’s just a symptom. If banks and governments keep flooding the market with cheap loans and subsidies, you’re inflating the money supply, meaning you’re adding more money into circulation.
The more money sloshing around the more you’ll need to purchase goods (hence why your dollar starts to devalue)… And hence price increases.
And no government is doing enough to solve inflation, even with these rate hikes.
If it was just devalued currency the corporations would also be dealing with a devalued currency and not recording record profits. That’s one of the reasons getting a handle on it was such a challenge.
Are these record profits adjusted for inflation? As in, are they earning more or is it nominally higher?
My logic being, overhead gets more expensive as the currency diminishes. Companies raise prices (which you’re seeing) to offset that. And then nominally, yes they’d be making record numbers. Like Zimbabwe, they made record numbers when they had hyperinflation. Didn’t mean they were doing well.
And yeah I mean it’s not just devalued currency, there are a lot of factors that go into inflation. But Id say it’s one of the biggest contributors for sure.
Interest rates stayed low for too long and people borrowed up to their eyeballs (corporations included), pumping a lot of currency into the market. That’s got to account for something no?
Yes, that is adjusted for inflation. They raised prices beyond what was necessary to account for increased costs and had record high profit margins, so you had companies like ConAgra foods reporting profits 60% higher than the same quarter the year before, and people accepted it because of the pandemic and stimulus packages (“Biden dumped money in the economy!”) and labor shortages. It made a great scapegoat. Those loans existed before the pandemic, they really don’t account for what happened. Inflation driven by corporate gouging had never been seen before like this.
You can find a lot of information about greedflation.
I’ve read a lot of articles suggesting it’s profit seeking, i.e., greed, and not monetary supply. We made the money printers go brrr for a very long time with almost no inflation.
You can’t print without consequences. The more you pump into circulation, the more currency you need to buy the same goods and services. You’re basically losing purchasing power.
If you give everyone a million dollars, you’re going to see prices increase. If prices don’t rise, people could buy out entire stocks of goods and you’ll have supply problems. So you need prices to increase to adjust for the amount of currency circulating. That’s inflation.
Chart on your purchasing power over the years: