Fixed it again..

I think there is good reason to doubt the numbers that Shadow Stats presents. His methodology is far from scientific and his calculations may even be based on a misunderstanding of an annual increase vs an increase over 20 years. Also the price of Shadow Stats has been $175/year since 2006. All this inflation and he hasn’t raised the price.

The reality of the situation is that inflation is regressive, and if sustained can cause lasting damage to the middle/lower class. However, 15%+ unemployment is also regressive. Evaluating our current situation in a vacuum is a mistake. The inflation we are seeing now is likely caused for the most part by a combination of supply chain disruptions and a rapid increase in the demand for goods (especially durable goods). The market certainly seems to think that inflation will subside over time. There is a lot of money to be made if you think this is wrong.

I think the take away for many people is that this inflation is the result of Covid related monetary and fiscal stimulus. While it may be easy to show an M1 chart or complain about the Fed “printing” money, I think this misses the point. The combined fiscal and monetary stimulus led to the fastest employment recovery in history. Jobless claims are currently at their lowest level in 52 years. There is no perfect option, but I’m not convinced that a temporary spike in inflation is worse for US workers than mass unemployment.

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