Soaring Lumber Prices Add $36,000 to Cost of a New Home - Page 3 - Politics Forum.org | PoFo

Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...

"It's the economy, stupid!"

Moderator: PoFo Economics & Capitalism Mods

Forum rules: No one line posts please.
#15171290
Rancid wrote:Perhaps.

My opinion is this.

Inflation is happening already. It's all happening in the housing market, which doesn't get counted in the CPI. It's basically "hidden" from the traditional inflation metric which only looks at consumer goods (TVs, Shampoo, food).


Although it needs to be said that inflation is currently above the 2% threshold the FED targets I might add. I don't think inflation is that hidden actually. It just hasn't reached a level of concern and the hope is that it is only temporary in any case.
#15171358
Steve_American wrote:
That you ask that question proves that you have not looked into MMT, and also that you forgot how I listed a short list of correct MMT predictions. So, again IIRC MMTers correctly predicted =>
1] That Japan could have large deficits without inflation, unemployment, high bond yields, etc., basically forever, even if the BoJ bought 40% of new bonds sold each year.
2] That Gov. surpluses always result in a recession. So, the dot com bubble.
3] That the EU & EZ rules on deficits were going to lead to exactly the current mess they have had since 2008.
4] That starting about 2006 or so the housing bubble would *soon* burst.
5] That the US & EU economies would not recover in the normal way from the GFC/2008 because of not enough deficit spending.
6] That the US could deficit spend without worring about it in a crisis as long as they kept it within reason.


B0ycey wrote:MMT is an explanation for these things. I never heard anyone actually predict these things beforehand. In fact those voices that did predict the dotcom and housing crash before they occurred were just the usual economists anyway. Besides, I support MMT. I have spoken fondly of it before now. I however don't reference it as why we can just hand out free money into the economy now and expect no consequences given MMT doesn't suggest that in any shape or form. And given inflations prime instigator is confidence, we wouldn't see an instant impact in it anyway. Also, and I cannot stress this enough, those who are predicting that inflation will be manageable right now are MSc economists and the guys running the ECB, FED and BofE. Those who are impartial to the market with a background to economics are more skeptical right now. And why shouldn't they be given there are red flags in the market right now which they are seeing firsthand.

...snip more of what Steve wrote...

Right, two things. Firstly I am not predicting anything. We will learn more ONCE the economy opens up completely. I am just being pragmatic that we shouldn't believe that creating more money is the answer right now. Or perhaps it is but we need to have a plan to recoup that borrowing via taxation at the very least or growth. Lockdowns have consequences. The money was handed out into the economy not for growth but to shut down production. That is not MMT economics. That is something entirely different. That is panic economics for a better word.

Secondly, inflation right now is indeed down to supply issues. But giving away free money does INDEED still make the situation worse given there is more money in the market to in essence bid up prices. Demand has not ceased since lockdown, it has been restricted. That has always been my point. Just because inflation hasn't reached double digits yet since your Covid cheques doesn't mean it won't. It just means that all the factors that playout for high inflation are not in play right now.


Sir, does it occure to you that the reason you didn't read them before hand (before the predicted thing occured) is because you like all MS economists were ignoring them?
That maybe you need to dig on the internet to see if they did predict them before hand?
I'm not good at internet digging so I must leave it to others.
I'm basing my claims on Prof. Mitchell's blog where he claims he predicted them and linked to some of his early blog posts [Bill's blog starts in Dec. 2004]; and also a youtube video of DR. Mosler's that I saw dated before 2000 (IIRC) where he preicted the EU's problems and the housing colapse.

Somebody here replied to me over a year ago with a list of what he or she called MS economists who predicted some of them. When I looked up all 6 of the people IIRC 2 were MMTers, 1 was Dr. Steve Keen who is not MS, and the other 3 were also fringe MS at best. All were ignored by all MS economists.
. . . So, I have not seen 1 group of MS economists who made 1 prediction of any of them. I note that you didn't provide 1 name for me to verify it.
.
#15171360
B0ycey wrote:Although it needs to be said that inflation is currently above the 2% threshold the FED targets I might add. I don't think inflation is that hidden actually. It just hasn't reached a level of concern and the hope is that it is only temporary in any case.


The one thing that I hope economists learned by looking back at the 70s & 80s is that during a time of shortage you can't blame price rises on too much money, because the price rises are the result of the shortages. Covid caused shortages. So, we see price rises. Duh.
#15171404
Steve_American wrote:The one thing that I hope economists learned by looking back at the 70s & 80s is that during a time of shortage you can't blame price rises on too much money, because the price rises are the result of the shortages. Covid caused shortages. So, we see price rises. Duh.

But if the prices don't go back down, that proves there was inflation.


This is part of the phenomena I've been trying to explain, where government policy is to intentionally create inflation at the same time prices would be going down, so that prices down don't go down, and that inflation isn't really directly observable.
In the case of the Housing Bubble, that was the bubble bursting and prices going down. In the case the pandemic, that is prices trying to come back down after raising high due to shortages. The "proof in the pudding" is when prices don't come back down, after going up.

This is sort of like inflation hidden on the wingtail of the receding edge of the wave. There can be all sorts of temporary big ups and downs in the economy, but inflation has longer-term effects that are not temporary.
#15171407
Puffer Fish wrote:But if the prices don't go back down, that proves there was inflation.


This is part of the phenomena I've been trying to explain, where government policy is to intentionally create inflation at the same time prices would be going down, so that prices down don't go down, and that inflation isn't really directly observable.
In the case of the Housing Bubble, that was the bubble bursting and prices going down. In the case the pandemic, that is prices trying to come back down after raising high due to shortages. The "proof in the pudding" is when prices don't come back down, after going up.

This is sort of like inflation hidden on the wingtail of the receding edge of the wave. There can be all sorts of temporary big ups and downs in the economy, but inflation has longer-term effects that are not temporary.


Sir, in this context 'inflation' is short for "inflation that matters".
I contend that the inflation we are seeing is far more the result of shortages than the larger money supply. Take lumber pricesas an example; I contend that the people who are building/buying new homes had enough money before the pandemic to build a new home. The money and the desire to spend were alreadu there. Then came the pandemic that reduced the supply of lumber being imported.
I've seen reports that existing homes are being bought by henge fund billionaires and foreigners. Again, they already were rich. Maybe in part because of Fed. policy (aka QE) for the last 11 years. [BYW, I opposed QE as a waste of money, that is based on the false MS economic theory about banking.]

Who cares if some prices change as long as it doesn't contiinue? The pandemic caused them, no matter what the Gov. did.

Sir, I think you implied above that some deflaton is a good thing. Well, you are wrong. Deflation is always a bad thing. Except for the filthy rich. They can buy up homes at cheap prices and this is good for them but bad for the nation as a whole. Are you filthy rich?
.
#15171412
Steve_American wrote:. . . So, I have not seen 1 group of MS economists who made 1 prediction of any of them. I note that you didn't provide 1 name for me to verify it.
.


https://www.intheblack.com/articles/2015/07/07/6-economists-who-predicted-the-global-financial-crisis-and-why-we-should-listen-to-them-from-now-on

It is because I am not really aware of any of their names except Colombo who may I add has broken away from other MSc forecasters and expects another crash soon. He was right before and I suspect he will be right again. The only thing I really remember was discussing the housing bubble and its explosion plenty of times BEFORE 2008 given that was something that occurred in Japan that was having red flags repeat across the world in 2008 - namely in Europe and America. I also remember discussing toxic loans, easy credit and the impact of all that given credit was the main reason for the 1929 crash. So yes, these bubbles WERE discussed and predicted before 2008 by economists given I was discussing it with them.

https://www.independent.co.uk/news/world/americas/financial-crisis-2008-coronavirus-donald-trump-economy-stocks-a9392881.html%3famp

Steve_American wrote:The one thing that I hope economists learned by looking back at the 70s & 80s is that during a time of shortage you can't blame price rises on too much money, because the price rises are the result of the shortages. Covid caused shortages. So, we see price rises. Duh.


Need I remind you that you said we should keep on shaking the money tree until we see inflation and now you say we are seeing inflation due to shortages, are you now saying we should stop shaking the money tree given inflation is ABOVE the Feds target?

And yes, inflation is due to shortages. However over supplying the market with money allows people to bid up prices which then spirals out of control. What have you learnt from Zimbabwe and Argentina? Not that I am saying that will happen in the US but given the flags are repeating again that we saw in the 70s, along with many other bubbles and red flags during a time of low interest rates, I find it astonishing that you cannot see some huge exploding bubbles coming our way actually and still insist we print away!
#15171995
B0ycey wrote:https://www.intheblack.com/articles/2015/07/07/6-economists-who-predicted-the-global-financial-crisis-and-why-we-should-listen-to-them-from-now-on

It is because I am not really aware of any of their names except Colombo who may I add has broken away from other MSc forecasters and expects another crash soon. He was right before and I suspect he will be right again. The only thing I really remember was discussing the housing bubble and its explosion plenty of times BEFORE 2008 given that was something that occurred in Japan that was having red flags repeat across the world in 2008 - namely in Europe and America. I also remember discussing toxic loans, easy credit and the impact of all that given credit was the main reason for the 1929 crash. So yes, these bubbles WERE discussed and predicted before 2008 by economists given I was discussing it with them.

https://www.independent.co.uk/news/world/americas/financial-crisis-2008-coronavirus-donald-trump-economy-stocks-a9392881.html%3famp

Need I remind you that you said we should keep on shaking the money tree until we see inflation and now you say we are seeing inflation due to shortages, are you now saying we should stop shaking the money tree given inflation is ABOVE the Feds target?

And yes, inflation is due to shortages. However over supplying the market with money allows people to bid up prices which then spirals out of control. What have you learnt from Zimbabwe and Argentina? Not that I am saying that will happen in the US but given the flags are repeating again that we saw in the 70s, along with many other bubbles and red flags during a time of low interest rates, I find it astonishing that you cannot see some huge exploding bubbles coming our way actually and still insist we print away!


Why the US wants inflation . 18,808 views • May 12, 2021 . Vox 8 min.


.
#15171999
@Steve_American

Can I be absolutely clear. I am not against stimulus packages or borrowing. But you have to pay for it. Even Sweden has high taxes to pay for their social programs. So if you want inflation, you have it. Too high inflation will hit spending FYI but whatever, you want it and have asked for it and I will just watch and see. I never supported lockdowns so I can criticise its aftereffects whatever they maybe.
#15172026
B0ycey wrote:@Steve_American

Can I be absolutely clear. I am not against stimulus packages or borrowing. But you have to pay for it. Even Sweden has high taxes to pay for their social programs. So if you want inflation, you have it. Too high inflation will hit spending FYI but whatever, you want it and have asked for it and I will just watch and see. I never supported lockdowns so I can criticise its aftereffects whatever they maybe.


Well, let me be perfectly clear. You failed to be perfectly clear. It sounds like you mean "pay for it" 100%. MMTers argue, as I have said at least 6 times, that the US Gov. needs to have a deficit almost every year, because there are leakeges of money out of the economy. The main ones being net savings and net money leaving the country to buy stuff.
. . . Therefore, the US Gov. does not need to pay for programs 100%. In fact, paying for all programs 100% will slow the economy. Look at the EU & EZ for evidence that this is true.
. . . Grok this, sir; the US Gov. is *not*, at all, like a household or corp., period. Please sir, reply so we can hash ths point out for the lurkers.
. . . When you say the US Gov. must pay for its programs, like stimulous, it sounds like you don't yet grok that basic simple truth. Sir, the whole point of a stimulous to to add money into the economy to replace money that was sucked out in some way. If the Gov. must tax enough to "pay for it", then no net money is being added.

Do you believe that the US national debt is goignto be a burden of your grandchildren? I know you will not answer. I have pointed out at least 6 tmes that the UK, aka England, has had a national debt for over 325 years now. During all that time it had deficits in most years. It paid-off very little compared to the additional boorrowing. All the graphs you will ever see of this are of debt/GDP over time. Never the raw debt over time. I suppose that there may have been times when the UK Gov. behaved as if it was a burden, and so it was a burden (I'm thinking of PM Thacher). But, was it ever *necessary* for the UK to behave like that? MMTers say, loudly, NO! Not even losing their Empire made the UK make an effort to pay-off its national debt. Because the UK is off the gold standard since 1971, the national debt is even less of a burden than it was before 1971.

.
The Wuhan virus—how are we doing?

You need evidence to demonstrate that 2 + 2 = 4?[…]

CRT

And it is as your own citations acknowledge, eve[…]

Florida Bans CRT in Schools

Right, but here's the thing: They can actually d[…]

All Nato operations have been approved by the UN […]