tag:blogger.com,1999:blog-3240565408401956331.post2385316706889646087..comments2023-07-08T05:49:38.333-04:00Comments on Larry Davidson's Thoughts on Macro and Other Stuff: Inflation and Rocky: Down But Not OutUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-3240565408401956331.post-28336872941644913132017-06-22T09:39:30.929-04:002017-06-22T09:39:30.929-04:00Good work Tuna,
That one got by me -- must have b...Good work Tuna,<br /><br />That one got by me -- must have been the JD. I meant to quote Friedman as saying that inflation is always a monetary phenomenon. <br /><br />The process you describe does not need Janet to loosen her grip. Those excess bank reserves are already there...all it takes is banks deciding to move them from the reserve category to loans. Bam Wham. This is why I am urging her to remove those excess reserves. While reserves they do no harm. But they loom as a giant risk factor if and when demand begins to climb faster. Larry Davidsonhttps://www.blogger.com/profile/10028971586654033347noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-31049214900905245002017-06-21T17:12:13.885-04:002017-06-21T17:12:13.885-04:00Friedman said, “money is always and everywhere a m...Friedman said, “money is always and everywhere a monetary phenomenon.” Geese, that’s like saying, “Water is always and everywhere a liquid phenom”. . . . unless of course, it isn’t when it’s solid ice. Rephrased: “Water is always and everywhere a H2O phenom.” Uh-h-h-h, well, yeah!?!?!?!? . . . and as a future-knowing tuna, I know that water will always be H20. Yepper, settled science fer shure.<br /><br />There is a similarity between water—liquid or frozen—and inflation. Both are affected by pressure. When frozen water (aka ice) is exposed to pressure (e.g. compress it and temperature increases) it melts and returns to liquid. Similarly, when prices (for commodities, goods, services, and labor) are pressured (e.g. demand increases and puts pressure on supply: demand exceeds supply—hey hey, a little Econ 101 here) they “inflate”—expand, go higher. It’s elementary, Watson . . . er, LSD.<br /><br />The economy is fluid (pun intended)—expands and contracts and expands and contracts. It’s been expanding slowly, but me thinks unemployment will soon be strained as companies find it difficult to fill job openings. While incumbent employees might not feel confident to demand wage increases the demand to fill new openings will force companies to open their wallets. Ergo, the inflation genie peeks out of the bottle. New job openings suggest increased demand for commodities, goods, services, and credit that might give the genie confidence to stick its head out of the bottle. Then Janet feels the need to loosen her grip on reserves to accommodate the demand for credit. Hey, now the future-seeing Tuna sees the genie emerging out of the bottle. Its escape velocity is directly proportionate to Janet’s loosening grip on the reserves so she needs to temper her release. Throwing a little ice water on the release of the reserves might do the trick, but don’t throw ice water on Rocky ‘cause he might awaken from his nap on the matt.<br />Tunahttps://www.blogger.com/profile/10963127416474394394noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-75113993584005738682017-06-20T15:39:09.653-04:002017-06-20T15:39:09.653-04:00Looks like the job market isn't the only thing...Looks like the job market isn't the only thing getting a little tight, Hoot.<br />Fuzzyhttps://www.blogger.com/profile/11438679628562995612noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-80021900718462259572017-06-20T10:08:28.922-04:002017-06-20T10:08:28.922-04:00You are sounding more and more like a Democrat Hoo...You are sounding more and more like a Democrat Hoot. Larry Davidsonhttps://www.blogger.com/profile/10028971586654033347noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-84197538181479530742017-06-20T09:57:53.687-04:002017-06-20T09:57:53.687-04:00Supposedly the job market is very tight and we ar...Supposedly the job market is very tight and we are getting to the point of demanding higher wages....not quite. Builders are speculating on housing again but the new housing cost are lower than in 2006. governments cannot afford infrastructure improvement but they can afford military overspending.? Go figure. Florida rduced school spending on public schools by endorsed the difference for charter schools and within 5 days after governor Scott signed the legislations, developers were already announcing new schools with a fairly large profit to them in terms of transferred state funds. Who supported the lobbying? Anonymoushttps://www.blogger.com/profile/11633317562147694296noreply@blogger.com