Скачать или смотреть Inflation or Deflation? with Dr Lacy Hunt

00:00:55 Lacy Hunt background
00:02:21 Do you still do econometric modeling today?
00:03:18 What does your research say right now about inflation or deflation?
we get into 2024, I think there's a good chance that we'll be able to return to the Fed's targeted 2% in the quarter. Personal consumption expenditures deflated. This is a slow. It's been an antagonizing really slow process...
00:06:20 According to the Social Security Administration, only 11% have income other than their Social Security. OK, so that between the 120 million full-time hourly and salaried workers and the 65 or 67 retirees, there's been a very damaging impact of the inflation, very damaging impact.
00:06:58 [Josh Jalinski -The Pizza test on inflation (Price Elastic Goods)]
00:10:20 So what's price inelastic goods? Food, fuel and shelter… So when there are no good substitutes, the demand is price inelastic. The consumer has to basically take the price so you can what you can do and we're seeing this now is the consumer budgets are under such pressure that Consumers are buying less fresh meat and they're shifting to down from from beef down to fish and chicken. And now we're seeing the ship from freshly the to can be canned chicken fish, which is. And we're we're seeing consumers shift to to store. Brands, rather than name brands and I think they're doing that because they're they've been badly hurt by inflation. And so for a lot of people, the inflation rate is higher, but the published numbers are weighted based on the average Market Basket for all of us. But high inflation does not work. Inflation robs everyone. But it robs the modest and moderate income households the most.
00:11:30 So what are we to do? No one seems to really care. I mean, we care with our budgets, but politically you would think that would be some major political issue.
00:13:40 Well, keep keep in mind. That a large part of the problem was the.
Catastrophic error at the Federal Reserve. As part of the coordinated monetary and fiscal policy response to the pandemic, we had record monetary growth. In fact, they created a huge mountain of money and credit. In 2020 and 2021. And so we had the classic definition that too much money chasing too few goods because there were supply side disruptions. But but now we have a record monetary contraction. And one of the calculations that I I do is I I look at the what's happened with the growth in, in, in money over the last three years, which takes in the money mountain of 2020 and 21 and also last year this year and. After adjustment for inflation, money has shown no growth for three years. Historically, it's growing at 3% per annum. And so from excess of money, we've gone now. To a shortage of money, the bank credit, which is the bank's lending and investing of bank credit adjusted for inflation over the last three years, has also gone back. And and so the the creation, the factors that created the inflation are being reversed. And these processes work very slowly. But they are effective and I think another thing to take into consideration is that if you look at the supply chains, the New York Fed has developed a a supply availability index. It it indicates that the supplies are now more available than they were. At the depths of the great financial crisis. So we're we're we're going to see a change and it's going to be difficult. For a lot of industries, because we've had a tremendous explosion. In for example, homes rent. Automobile price, as you mentioned that. But household income is not not kept up. It's lagged far behind. And so you have a disconnect between the price of these big ticket items and what's happened to household income. So they're they're going to have to be. The process is going to have to work itself out.
Going to be difficult. But it's happening.....
00:17:23 Discuss real estate, sales data, should people buy or sell ... | regional vs the average differences ... major disconnect and made partial adjustment to bring big ticket items
00:23:09 But the there's a critical element in the picture that we haven't discussed.
And the reason that people have not been willing to. Cut the prices is not only the fact that they're well situated and they have the low financing costs. the labor markets have remained relatively firm but the labor markets are in the process of changing and I think they're going to get weaker.
00:24:32 OK, we're going to go to the audience. We have WUSA, who has a question for Doctor Hunt. Go ahead, WUSA. Well, she want me to read it. Has the Fed overcorrected for inflation? And what are the risks associated with that? We have the largest contraction since 1934. Well, that speaks volumes to me that you have to go all the way back to the Great Depression.