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Comment by kome | Hacker News Reader

This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation. It's not a monetary inflation, it's inflation created by scarcity, related to production halts (cost-push inflation https://en.wikipedia.org/wiki/Cost-push_inflation).

While all kinds of inflation have the same symptoms, it's not true that all kinds inflation has the same causes. And also the cure, it should be the right cure.

Printing less money right now would be a huge mistake. But central bankers knows his very well.

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This only is true if you accept that additional money gets equally shared; however additional money benefits those with assets the most, whereas those with fewer assets (the middle and lower class) are punished in inflation as they are dependent upon income which often does not change in response to inflation.

Or in other words, if I have multiple properties, stocks, investements etc, inflation is good for me because those things increase in value; however if the primary source of capital I have is a paycheck I get each week that I then have to immediately spend on housing, food, groceries, gas etc, inflation hurts me because my boss isn't going to raise my pay, meanwhile everything has gotten more expensive in the meantime, and if my boss does eventually give me a COL increase that will have lagged to the point the rest of the economy has already caught up with it.

Pretending that inflation is good for debtors is like pretending that economically speaking we are all spherical cows in an airless frictionless vacuum.

Wages are rising fastest for low- and middle-income Americans. So they are benefiting from inflationary pressure.

And to be quit honest, the elephant in the room that no one wants to address is that low and middle income people leaving their jobs for better ones are a contributor of the inflation we are seeing. The USA built an economy around cheap goods produced through exploitation both abroad and domestically. And these people are finally realizing that they can do better.

The government cut off the inflow of immigrants who would replace these people in dangerous, low paying factory jobs, like meat packing.

Cut off the inflow of immigrants? What do you call the 1.5 million that have illegally crossed the US-Mexico border this year?

That's a pretty big reduction from historical levels. The peak was 7 million people in 2007. In previous years, border detentions alone exceeded 1.5 million people.

Those millions of lost immigrants are enough to make a solid dent in the labor shortage we are currently seeing.

Except that without prices being allowed to adjust upwards in response to costs going up, there would be a massive gridlock in the labor markets, wage freezes, layoffs, recession or depression.

It's workers who benefit the most from a fluid and tight labor market. Asset holders only get a transient, on-paper gain that is much less important than a functional labor market is to workers. In a good labor market, businesses are fighting to retain and attract labor.

> This kind of inflation we are witnessing, it's not because too much money has been printed, but exactly because there is not enough money in circulation.

Oh wow.

Krugman, leave that body!

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