> And judging how many people I know around town who have been treating their houses like ATMs, it's not a small effect. This is true, this is at least appealing to common sense. But I don't see how that excess cash was…
> No it doesn't suck money out, but it reduces the rate at which new money is created through borrowing. This is true. It does not tell me how the money created through borrowing between 0.75% rates and 4.00% rates was…
> The reduced demands for goods then filters through the system producing more layoffs and more reduced demands for goods across every sector and the economy contracts into a recession. Yes, but prices are not demand,…
> and can have a cooling effect on asset prices at broad levels. Well asset prices aren't the prices of food and gas.
Person A stops paying person B. Is person B going to stop buying food and gas?
> Without enough money, some people will cancel their planned trip to Hawaii. By this logic, why doesn't Congress illegalize travel? Is that going to reduce the cost of travel? Will that reduce CPI, which measures…
> but does not necessarily reduce the supply of goods Every mainstream economist agrees that rising interest rates increases unemployment. Well you need human beings to go and make stuff like food and gas. That stuff is…
> They're trying to reduce the extent of price increases going forward. What is the common sense explanation for how increasing interest rates reduce the extend of price increases of food and gas?
> The only way to reduce prices of oil/gas and fertilizers (for food) is to bring back the amount of oil/gas and ammonia that went offline due to Russia. There is no amount of digging anywhere in the world that will…
> By sucking the money out of the system. Does it suck money out of the system? Here's a common sense example: Raising interest rates caused assets like stocks and bonds to decline in price. People sell these equities…
> The Fed's tools are very blunt, and the only way it can reduce at-the-register prices for things like food and gas are indeed by hammering down aggregate demand, i.e. inducing a recession. By some measures, it's not…
> It won't, because the current inflation is supplyside-driven, not expectations-driven. But if we transition to an expectations-driven inflation regime, that's really bad, because it would require much more severe…
Well, I don't see a common sense explanation as to why the rate of increase should decrease either. We could also say, "Eventually, the rate of increase will go down anyway, in the absence of any action from the fed."
> Higher unemployment means some people won't be able to afford food and gas lowering the demand for food and gas. People need food and gas to survive. They're not going to stop buying food and gas, unless they are dead.
> ... borrowing... borrowed... Borrowed money is rarely spent on food and gas. You can be stupid and talk about buying food and gas on credit cards. Very few people in this country will stop buying food and gas to…
> is that people will cut spending somewhat Why would people cut spending on food and gas? They need both to survive. That's what the CPI is made of.
How exactly do rising interest rates reduce demand for food? How does it reduce demand for gas? This is what I mean.
"I am once again asking for" a common sense explanation for how increasing interest rates will reduce the prices of retail food and gas. (This should be the new Deleuze meme.)
> Did we convert to a clean grid? Connect every city by rail? Fix every road and bridge? Fix healthcare and education? Reduce crime to a minimum? Reduce homelessness to a minimum? Did anything improve materially? Maybe…
> Start bringing back some of the taxes we had in the 1950s, when the country actually grew faster. There's no common sense reason this would reduce government interest payments. There are many common sense reasons it…
> And judging how many people I know around town who have been treating their houses like ATMs, it's not a small effect. This is true, this is at least appealing to common sense. But I don't see how that excess cash was…
> No it doesn't suck money out, but it reduces the rate at which new money is created through borrowing. This is true. It does not tell me how the money created through borrowing between 0.75% rates and 4.00% rates was…
> The reduced demands for goods then filters through the system producing more layoffs and more reduced demands for goods across every sector and the economy contracts into a recession. Yes, but prices are not demand,…
> and can have a cooling effect on asset prices at broad levels. Well asset prices aren't the prices of food and gas.
Person A stops paying person B. Is person B going to stop buying food and gas?
> Without enough money, some people will cancel their planned trip to Hawaii. By this logic, why doesn't Congress illegalize travel? Is that going to reduce the cost of travel? Will that reduce CPI, which measures…
> but does not necessarily reduce the supply of goods Every mainstream economist agrees that rising interest rates increases unemployment. Well you need human beings to go and make stuff like food and gas. That stuff is…
> They're trying to reduce the extent of price increases going forward. What is the common sense explanation for how increasing interest rates reduce the extend of price increases of food and gas?
> The only way to reduce prices of oil/gas and fertilizers (for food) is to bring back the amount of oil/gas and ammonia that went offline due to Russia. There is no amount of digging anywhere in the world that will…
> By sucking the money out of the system. Does it suck money out of the system? Here's a common sense example: Raising interest rates caused assets like stocks and bonds to decline in price. People sell these equities…
> The Fed's tools are very blunt, and the only way it can reduce at-the-register prices for things like food and gas are indeed by hammering down aggregate demand, i.e. inducing a recession. By some measures, it's not…
> It won't, because the current inflation is supplyside-driven, not expectations-driven. But if we transition to an expectations-driven inflation regime, that's really bad, because it would require much more severe…
Well, I don't see a common sense explanation as to why the rate of increase should decrease either. We could also say, "Eventually, the rate of increase will go down anyway, in the absence of any action from the fed."
> Higher unemployment means some people won't be able to afford food and gas lowering the demand for food and gas. People need food and gas to survive. They're not going to stop buying food and gas, unless they are dead.
> ... borrowing... borrowed... Borrowed money is rarely spent on food and gas. You can be stupid and talk about buying food and gas on credit cards. Very few people in this country will stop buying food and gas to…
> is that people will cut spending somewhat Why would people cut spending on food and gas? They need both to survive. That's what the CPI is made of.
How exactly do rising interest rates reduce demand for food? How does it reduce demand for gas? This is what I mean.
"I am once again asking for" a common sense explanation for how increasing interest rates will reduce the prices of retail food and gas. (This should be the new Deleuze meme.)
> Did we convert to a clean grid? Connect every city by rail? Fix every road and bridge? Fix healthcare and education? Reduce crime to a minimum? Reduce homelessness to a minimum? Did anything improve materially? Maybe…
> Start bringing back some of the taxes we had in the 1950s, when the country actually grew faster. There's no common sense reason this would reduce government interest payments. There are many common sense reasons it…