U.S. producer prices rise to 6.6% annualized rate in May

[Shaul]

FTA: “Producer prices as of May rose 6.6% over the past 12 months, the fastest increase on record.”

https://www.cnbc.com/2021/06/15/retail-sales-producer-price-index-may-2021.html

This is a powerful sign of imminent inflation.

 

[epronovost]

It might be time to raise taxes. It could reduce inflation, prevent the economy to overheat during the end of lockdown and keep or sent funds to areas which are more depressed.

 

[Lyndon]

Anytime there are major shortages in production due to covid you are going to see inflation, that's just normal.

 

[Twilight Hue]

FTA: “Producer prices as of May rose 6.6% over the past 12 months, the fastest increase on record.”

https://www.cnbc.com/2021/06/15/retail-sales-producer-price-index-may-2021.html

This is a powerful sign of imminent inflation.

It always is with regime change. Not surprised at all. Not one bit.

 

[Lyndon]

It always is with regime change. Not surprised at all. Not one bit.

You mean the regime change from Fascism to Communism? Not anything to do with Covid? you do realize that all the countries are experiencing high inflation regardless of whether they have right or left wing governments.

 

[Twilight Hue]

You mean the regime change from Fascism to Communism? Not anything to do with Covid? you do realize that all the countries are experiencing high inflation regardless of whether they have right or left wing governments.

Some higher than others im sure.

 

[pearl]

Inflation is tough on the average consumer, especially those on a fixed income, but if one has a healthy bank account inflation raises the interest paid.

 

[Shaul]

Inflation is tough on the average consumer, especially those on a fixed income, but if one has a healthy bank account inflation raises the interest paid.

Interest paid is not going up at this time. The current average interest rate paid on bank savings accounts is 0.04 APY. The rate is being held down by Federal Reserve actions.

 

[metis]

It's a "bubble" that should gradually go down when supply catches up to demand as we're opening up very quickly.

 

[pearl]

Interest paid is not going up at this time. The current average interest rate paid on bank savings accounts is 0.04 APY. The rate is being held down by Federal Reserve actions.

I don't really keep up with the interest paid anymore, I remember the double digit inflation rate rate of the eighties, my retirement fund paid 14% interest rate.

 

[Twilight Hue]

Inflation is tough on the average consumer, especially those on a fixed income, but if one has a healthy bank account inflation raises the interest paid.

Remember when savings actually meant that?

Now the only way is market accounts which of course entail risk.

 

[Twilight Hue]

It might be time to raise taxes. It could reduce inflation, prevent the economy to overheat during the end of lockdown and keep or sent funds to areas which are more depressed.

Great. Give people more incentive to spend less.

 

[epronovost]

Great. Give people more incentive to spend less.

That's the point. Inflation is caused by excessive spending and economical activities. If you slow an overheating economy by taxation, you reduce inflation and avoid a burst.

 

[pearl]

I have heard it said that there cannot be 100% employment without inflation.

 

[metis]

I have heard it said that there cannot be 100% employment without inflation.

And that makes sense in that if demand is significantly higher than supply, then inflation is pretty much a given. One economist I listened to a few days ago said he expects this current inflationary cycle to last probably about three months before subsiding. However, with so many things going on that could slow supply growth, such as the drought that is already affecting our food supply, I don't think we can take that for granted.

 

[Twilight Hue]

That's the point. Inflation is caused by excessive spending and economical activities. If you slow an overheating economy by taxation, you reduce inflation and avoid a burst.

That's because when people buy more, prices go up due to corporate greed. Makes sense, but not spending is just as destructive and creates dependency on the government.

 

[Lyndon]

'not spending creates dependency on the government"?? what a stupid statement!

 

[epronovost]

That's because when people buy more, prices go up due to corporate greed. Makes sense, but not spending is just as destructive and creates dependency on the government.

Actually no. Not doing anything to counter inflation would be a waste and risk the economic stability. It would also spoil an ideal time to augment the revenue of the State in a time of overabundance to finance projects and services in leaner times.

 

[Twilight Hue]

'not spending creates dependency on the government"?? what a stupid statement!

Hardly.

If people don't spend, business fail. Govt dependency increases.

Care to point out the stupidity here?

 

[epronovost]

Hardly.

If people don't spend, business fail. Govt dependency increases.

Care to point out the stupidity here?

If people overspend, inflation gets in, stock lose value and people lose purchase power and business fail too. A heathy economy strikes the balance between saving and spending.