6 ms·

Realistically, what are the viable directions from here, and what are their outcomes?

imtringued 4y ago
Stop QE and do a debt brake. If you are adventurous introduce a land value tax to pay off debt.
mercy_dude 4y ago
Fed can’t hike rates as fast as they need to bring down the inflation so it’s going to last till 2023 or beyond. If economy enters into recession, which there is a solid chance of, Fed will have to stop rate hikes and start back QE (like ECB) and that means inflation is here to stay. The only good thing is it will also inflate away the 33 trillion debt we have.
- toomuchtodo 4y ago
  Benchmark rate is a blunt tool. It won't print more oil and food supply, nor can it print more housing stock (sectors where inflation is currently focused). This is where targeted fiscal policy would be most beneficial (mandating remote work where able, encouraging more rapid uptake of EVs to not be beholden to a global oil market while one of the largest suppliers is engaged in a land war and has sanctions applied to it), but that is unlikely to arrive with the current authorities of fiscal policy. Asset price destruction is also a likely outcome, and will bring down home and equities prices, allowing for those on the margins to get into homes where prices were too high before, as well as get exposure to the stock market for wealth accumulation. This, in my humble opinion, is a desired outcome. TLDR Deflate the asset bubbles. A light recession would be welcome for price stability, and with labor participation rate where it is at, I think the data shows some reliable indicators that unemployment won't spike when the Fed starts banging away with their rate hammer on the broader economic system. A million people, for a variety of reasons, left the labor force during the pandemic, while 10k Boomers retire per day. The US economy faces an ongoing labor shortage well into the next decade [1]. [1] https://www.youtube.com/watch?v=LI4mDQeo9eE https://www.youtube.com/watch?v=LI4mDQeo9eE
  - agentofoblivion 4y ago
    Mandating remote work? You have terrible ideas.
    - toomuchtodo 4y ago
      If you can't supply more oil, you must destroy demand or avoid the demand in the first place. https://news.ycombinator.com/item?id=32069033 https://news.ycombinator.com/item?id=32069033 (Netherlands poised to make work-from-home a legal right, says report) https://www.euronews.com/next/2021/11/11/which-countries-plan-to-offer-remote-working-as-a-legal-right https://www.euronews.com/next/2021/11/11/which-countries-pla... (After Portugal, which countries in Europe are improving post-COVID remote working laws?) Progress takes time, and requiring people burn (currently, very expensive and in short supply) fossil fuels to move their bodies to an office to do knowledge work is silly. Perhaps this will be more clear as the global oil market situation deteriorates further. More economic pain may need to occur before such policy is encouraged along. C'est la vie.
      - deleted 4y ago
        [deleted]
      - ChuckNorris89 4y ago
        >Progress takes time, and requiring people burn (currently, very expensive and in short supply) fossil fuels to move their bodies to an office to do knowledge work is silly. Yet it's still mandatory for many tech jobs in Europe. Companies are delusional with their butts in seats culture.
    - Clubber 4y ago
      Environmentally and economically driving to a location and back every day unnecessarily is a horrible idea. It's like burning a $20 bill inside a bicycle tire every day. There are some cases where in person work is required to do the job, but a significant portion of jobs don't require it any longer (and probably haven't since the late 90s).
- rendang 4y ago
  Why would you expect inflation in a recession especially when fuel is driving a lot of the inflation and fuel demand goes down in recessions?
  - mercy_dude 4y ago
    Because the factors driving the inflation are from supply side such as energy or supply chain mess. Recessions won’t kill demands as fast - people are still going to need gas and presumably food.
- ab_testing 4y ago
  I agree with you and don't understand why you are being downvoted. If the second quater GDP growth comes back negative and it proves that we are in a recession, then the fed will have to halt the interest rate hikes. That will prolong the high inflationary period.
Proven 4y ago
[dead]

Stop QE and do a debt brake. If you are adventurous introduce a land value tax to pay off debt.

Fed can’t hike rates as fast as they need to bring down the inflation so it’s going to last till 2023 or beyond. If economy enters into recession, which there is a solid chance of, Fed will have to stop rate hikes and start back QE (like ECB) and that means inflation is here to stay. The only good thing is it will also inflate away the 33 trillion debt we have.

toomuchtodo 4y ago
Benchmark rate is a blunt tool. It won't print more oil and food supply, nor can it print more housing stock (sectors where inflation is currently focused). This is where targeted fiscal policy would be most beneficial (mandating remote work where able, encouraging more rapid uptake of EVs to not be beholden to a global oil market while one of the largest suppliers is engaged in a land war and has sanctions applied to it), but that is unlikely to arrive with the current authorities of fiscal policy. Asset price destruction is also a likely outcome, and will bring down home and equities prices, allowing for those on the margins to get into homes where prices were too high before, as well as get exposure to the stock market for wealth accumulation. This, in my humble opinion, is a desired outcome. TLDR Deflate the asset bubbles. A light recession would be welcome for price stability, and with labor participation rate where it is at, I think the data shows some reliable indicators that unemployment won't spike when the Fed starts banging away with their rate hammer on the broader economic system. A million people, for a variety of reasons, left the labor force during the pandemic, while 10k Boomers retire per day. The US economy faces an ongoing labor shortage well into the next decade [1]. [1] https://www.youtube.com/watch?v=LI4mDQeo9eE https://www.youtube.com/watch?v=LI4mDQeo9eE
- agentofoblivion 4y ago
  Mandating remote work? You have terrible ideas.
  - toomuchtodo 4y ago
    If you can't supply more oil, you must destroy demand or avoid the demand in the first place. https://news.ycombinator.com/item?id=32069033 https://news.ycombinator.com/item?id=32069033 (Netherlands poised to make work-from-home a legal right, says report) https://www.euronews.com/next/2021/11/11/which-countries-plan-to-offer-remote-working-as-a-legal-right https://www.euronews.com/next/2021/11/11/which-countries-pla... (After Portugal, which countries in Europe are improving post-COVID remote working laws?) Progress takes time, and requiring people burn (currently, very expensive and in short supply) fossil fuels to move their bodies to an office to do knowledge work is silly. Perhaps this will be more clear as the global oil market situation deteriorates further. More economic pain may need to occur before such policy is encouraged along. C'est la vie.
    - deleted 4y ago
      [deleted]
    - ChuckNorris89 4y ago
      >Progress takes time, and requiring people burn (currently, very expensive and in short supply) fossil fuels to move their bodies to an office to do knowledge work is silly. Yet it's still mandatory for many tech jobs in Europe. Companies are delusional with their butts in seats culture.
  - Clubber 4y ago
    Environmentally and economically driving to a location and back every day unnecessarily is a horrible idea. It's like burning a $20 bill inside a bicycle tire every day. There are some cases where in person work is required to do the job, but a significant portion of jobs don't require it any longer (and probably haven't since the late 90s).
rendang 4y ago
Why would you expect inflation in a recession especially when fuel is driving a lot of the inflation and fuel demand goes down in recessions?
- mercy_dude 4y ago
  Because the factors driving the inflation are from supply side such as energy or supply chain mess. Recessions won’t kill demands as fast - people are still going to need gas and presumably food.
ab_testing 4y ago
I agree with you and don't understand why you are being downvoted. If the second quater GDP growth comes back negative and it proves that we are in a recession, then the fed will have to halt the interest rate hikes. That will prolong the high inflationary period.

Proven 4y ago

[dead]