william the wie
Gold Member
- Nov 18, 2009
- 16,667
- 2,402
- 280
No one knows for sure what is going on so here are some candidates:
The locations of the exchanges, Chicago and NYC, are noted for their massive SALT and real estate costs, which are no longer deductible. So the majority of traders are seeing deflation. The Fed is dealing with the average American's wage push inflation.
Most of the growth in the economy is from repatriation and Foreign Direct Investment (FDI). But a really big question mark is whether the US will remain the world's major market for used capital equipment. Since the US has no VAT (Value Added Tax) and relatively low tariffs foreign firms can finance real investment here through their export VAT tax deduction for shipping their older usable capital equipment here and this does not show up as Investment in the GDP equations but the knock on effects do. So a lot of growth from repatriation and FDI is showing up as inflation, not investment.
This gaming of the GDP equations has been going on since VAT was invented about fifty years ago bit not to this degree so continued confusion should be with us as far as the eye can see.
Any other causes?
The locations of the exchanges, Chicago and NYC, are noted for their massive SALT and real estate costs, which are no longer deductible. So the majority of traders are seeing deflation. The Fed is dealing with the average American's wage push inflation.
Most of the growth in the economy is from repatriation and Foreign Direct Investment (FDI). But a really big question mark is whether the US will remain the world's major market for used capital equipment. Since the US has no VAT (Value Added Tax) and relatively low tariffs foreign firms can finance real investment here through their export VAT tax deduction for shipping their older usable capital equipment here and this does not show up as Investment in the GDP equations but the knock on effects do. So a lot of growth from repatriation and FDI is showing up as inflation, not investment.
This gaming of the GDP equations has been going on since VAT was invented about fifty years ago bit not to this degree so continued confusion should be with us as far as the eye can see.
Any other causes?