I don't think we disagree all that much. I have to analyze and act on this shit for a living, so I'll try to keep this brief and hopefully with some sense to it.
I've been calling the post-Meltdown economy "Capitalism 2.0", because the Federal Reserve is now essentially every bit as important to the economy as the consumer. The Fed's balance sheet is now at about $9 trillion, with another $2 trillion poured in by the NY Fed in 2019 to unfreeze credit markets.
So this fucking FLOOD of stimulative dollars has been growing and pretty much EVERYONE has been wondering why we haven't had massive inflation yet. EVERYONE. We've been wondering since 2009. My theory is that there was a great deal of slack in the system, where lower and middle earners still didn't have enough cash to push inflation. But holy shit, we have been fucking AWASH in cash, but we've still been able to avoid inflation (while the rich got mega-rich in the process). The money went to the top. Again.
So, with this historic level of stimulative cash stuffing our system, along comes COVID and the shutdowns. Not only did a ton of consumer dollars build up during that time, but global supply chains were busy decaying and were ready to collapse. So after we opened back up post-Covid, BOOM, demand fucking exploded and global supply chains fell to pieces. Basic economics: Higher demand, lower supply, inflation. Duh.
So yeah, you're right, those who could make changes in the system are incentivized not to. Why in the world SHOULD they? Our political system is set up such that big money equals massive power and influence. And are we going to learn? Doubtful.
Very, well said, IMO.
Though I actually do think I know why inflation has not risen before now...relativity.
Since every, single medium/major economy on the globe (to my knowledge) is 'printing' SHIT loads of money? And has been since roughly the same time (2007 or so - Japan long before that)?
Prices are staying constant.
If only one nation (say, the Weimar Republic or Venezuela-more recently) prints the excrement out of their money?
It will lose value to other countries money.
But if EVERYONE is going nuts?
Everyone's currencies (and relative values) will look stable.
The main reason Japan got away with it before was the carry trade artificially propped up their currency value.
I am convinced that all of the 'Fed Heads' of the world got together in 2007? And said - '
it's our time. Let's go nuts. But we HAVE to stay together on this to keep inflation down'.
Though, I could be giving them more credit then they deserve (wouldn't be the first time) and they just acted at the same time in the same ways.
Whatever the reason, that is why inflation has not begun until Covid?
Everyone 'devalued' their currencies at the same rates.
And their economies are largely intertwined.
Thus, they all kept their
relative value.
But Covid separated everyone's economies again.
And the inflation no longer had a place to hide.
Plus, the central banks/governments going absolutely CRAZY (as you mentioned) did not help.
The inflation IS there.
Has been - probably - since the early/mid-2000's.
It just will not show up until this debt circus ends.
And/or many economies de-couple from each other (i.e. protectionism).
That is what I think anyway.
www.bea.gov
