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Originally Posted by GGG
If what your saying is the case why did we have decades of low inflation?
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I think in large part because of decades worth of policy to offshore every single possible thing where it was cheaper to do production in China or other cheap labour countries, and huge advancements in agriculture & fossil fuel technology that allowed food & energy to be remain cheap.
But as soon as the supply chain ran into problems, where practically everything we lived on because an issue to transport, inflation went crazy.
Low interest rates are an issue, and they should have possibly been raised quicker, but I think its pretty clear that there are other issues going on as well.
One example where government policy has been very slow to adapt to reality is with housing prices. Its pretty clear that money laundering, criminal activity, excessive foreign investment, multiple property ownership, etc has led to our real estate market very likely being a massive bubble. Why has the government not stepped in HARD to deal with this?
I don't even know if housing is tied into inflation numbers, but the fact that so much of our money is GOING into real estate means that there is less money for other good & services, which also drives up prices.
You can find many examples like this.
That is why continuous rate raises is just a short sighted policy.