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  • ECB's Schnabel: little evidence that high inflation rates are becoming entrenched

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  • #1
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  • Oct 7, 2021 9:20am Oct 7, 2021 9:20am
Can I ask a question? How will the wages of all those people hired today go back down in 1 year? Are you planning on cutting wages?
...because you never know - until you do!
  • #2
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  • Oct 7, 2021 9:26am Oct 7, 2021 9:26am
Quoting fxsport
Can I ask a question? How will the wages of all those people hired today go back down in 1 year? Are you planning on cutting wages?
Loaded question as you know the answer, . Inflation will only diminish when the public at large believe tomorrow's prices will be less than today. Right now, with energy prices going to the stratosphere and likely to remain so for 6 months at least, and supply shortages left, right and centre, I doubt the public will be thinking that prices are going to relax any time soon.
  • #3
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  • Oct 7, 2021 10:00am Oct 7, 2021 10:00am
Little evidence = some evidence. If its not a problem stop talking about it. When a gun is smoking there will be a bullet as evidence, so who has the bullet?? Thats right, its hidden behind or in all the Bu****it.
  • #4
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  • Oct 7, 2021 10:27am Oct 7, 2021 10:27am
Quoting DaJoWaBa
{quote} Loaded question as you know the answer, . Inflation will only diminish when the public at large believe tomorrow's prices will be less than today. Right now, with energy prices going to the stratosphere and likely to remain so for 6 months at least, and supply shortages left, right and centre, I doubt the public will be thinking that prices are going to relax any time soon.
While I agree with what you wrote, your example is what the ECB lady WAS talking about - transitory inflation.

When too many dollars/eruo/yuan, etc., are chasing too few products it causes inflation up to a point when the product becomes too expensive so people stop buying and the price reverts to the mean.

That is NOT the case with wages. Employee wages are 20-25% of a company's overhead. When is the last time YOU took a pay cut? It doesn't happen
...because you never know - until you do!
  • #5
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  • Oct 7, 2021 10:31am Oct 7, 2021 10:31am
  •  Trader#85DC
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Quoting PaulVic
Little evidence = some evidence. If its not a problem stop talking about it. When a gun is smoking there will be a bullet as evidence, so who has the bullet?? Thats right, its hidden behind or in all the Bu****it.
Global CBs have to keep talking about it to help ensure the current inflation does not get entrenched in the consumer's mind. The more we hear it the more likely we are to believe current high price will be fleeting.
  • #6
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  • Oct 7, 2021 11:12am Oct 7, 2021 11:12am
Quoting fxsport
{quote} While I agree with what you wrote, your example is what the ECB lady WAS talking about - transitory inflation. When too many dollars/eruo/yuan, etc., are chasing too few products it causes inflation up to a point when the product becomes too expensive so people stop buying and the price reverts to the mean. That is NOT the case with wages. Employee wages are 20-25% of a company's overhead. When is the last time YOU took a pay cut? It doesn't happen
I wasn't disagreeing with you. I was making the point that it's more than likely that the economists are reading it wrong and that 'transitory' is an illusion. Whilst data is an indicator, it tends to be behind the curve. If energy prices are rising 40% in a day (as per Natural Gas prices in Europe this week), what good is waiting for a data point after a month, never mind 3 months? (Rhetorical). What is in the minds of the public as a result of their experiences 'on the ground', whether as a consumer or business employee, is what tends to be the bell-weather, rather than a neat data-point after the event.
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  • Posted: Oct 7, 2021 9:12am
  • Submitted by:
     Newsstand
    Category: Low Impact Breaking News
    Comments: 6  /  Views: 1,683