Holding Productivity steady while Printing Money + Lowering Interest Rates = Increased Liqudity = Increased Demand = Inflation

Productivity is where its at~Thats what counters inflation~Thats why the recovery in the job market is critical to feds agenda and job creation via the infrastructure bill is critical to Bidens agenda~The supply chain bottlenecks are whats making inflation be “transitionary” for longer than expected because the jobs market is recovering well

Fight me!

$DIA $SPY $NDAQ
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Oliver's avatar
@odysseusNovember 9
In New Zealand where I am based I think there is a real possibility of stagflation occurring.

NZ still has tough Covid restrictions in place that does not allow foreigners into our labour market.

Unemployment is at 3.4% and inflation is hovering close to 5% with the Official Cash Rate at 0.5%

Our largest city has been in lockdown for two months and expected to remain in lockdown for at least two more weeks.

We are a primary produce exporter nation that has the double whammy of supply chain issues for perishable goods and no low wage workers allowed to come in from pacific nations to harvest.

While the headlines we praise our countries response, we are certainly heading into choppy waters.

I’m not very knowledgeable about currency markets but my gut feeling is that because of the above the NZD will get stronger against other major currencies as our reserve bank tries to tackle these economic issues.
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Nathan Worden's avatar
No argument here- although the productivity question is interesting. Is it holding steady? In some areas of the economy it is Improving while in others it is consistent.

It’s traditionally thought that workers’ productivity increases their value in the labor market. Increasing productivity is the main mechanism by which they are able to command higher wages and improve their well-being.

But with labor shortages, workers may have leverage to demand higher wages without becoming more productive.
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Sufi's avatar
@sufiofwallstNovember 9
Author
I agree with you. I wasn’t saying that productivity is holding steady. I was saying if you were to hold it steady then those series of event would lead to inflation this isolating productivity as the counter to inflation
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