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Comment by Qub3d | Hacker News Reader

> The surprise has been that inflation hasn't occurred outside of asset prices.

But it has occurred. People were originally calling it "short term" but its clear that the 6-7% inflation seen at the tail end of 2021 was very real.

As to your two outcomes:

I'd like to believe that the second one is what is sort of happening, with the "great resignation" of blue-collar and otherwise "unskilled" workers (its a term of art, I understand some of the jobs in this pool require a lot of finesse). Unfortunately, I also see lots of push from the top of the economic strata for the first outcome; most notably in the attempt to move from car ownership to ridesharing.

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> But it has occurred. People were originally calling it "short term" but its clear that the 6-7% inflation seen at the tail end of 2021 was very real.

I'm not sure those are related. I bet that was just one of the unintended consequences of stimulus checks in the US economy.

Keep in mind that poverty in the US is increasing like wildfire. In 2019, about 69% of Americans reported having less than $1000 in a savings accounts.

https://www.yahoo.com/now/survey-69-americans-less-1-1719272...

That falls well within living paycheck-to-paycheck territory, if not even below. This means the vast majority of Americans cannot afford luxuries or even basic necessities. Things haven't got better for the average Joe since 2019, too.

Then all of a sudden the whole country received a comparatively huge check in the mail to freely spend however they feel like it.

Expectedly, this sudden increase in disposable income and purchasing power will reflect in a hike in demand for the things being tracked by inflation índices. Increases in consumer demand lead to higher consumer prices, and thus inflation indicators go up.

These could be more coupled than you would assume. When the government borrows freshly printed dollars and freely distributed the money, the velocity of money ticks up. When it’s borrowed for stock buybacks the velocity of money ticks down.

Effectively Covid stimulus may have forced the government to step in, releasing the inflation QEs been brewing.

> Effectively Covid stimulus may have forced the government to step in, releasing the inflation QEs been brewing.

Not quite. QE created inflation in assets that are not a part of inflation indicators, at least directly, like stock and real estate. QE resulted in phenomena like Tesla's utterly absurd meteoric valuation during the past year.

There are some markets where QE and stimulus checks, such as rent prices, which mixes an increase in disposable income on the demand-side and a need to validate inflated investments in real estate on the supply-side.

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