Yanis Varoufakis: Inflation as a Political Power Play Gone Wrong


Naked Capitalism has reposted the article Yanis Varoufakis: Inflation as a Political Power Play Gone Wrong.

The comments introducing the article are wrong. I agree with the original author.

Using what happened in 2008 to explain what is going on now is the mistake by Yves Smith.

Below is what Yanis Varoutakis wrote that I agree with.

Then came the pandemic, which changed one big thing: Western governments were forced to channel some of the new rivers of central-bank money to the locked-down masses within economies that, over the decades, had depleted their capacity to produce stuff and were now facing busted supply chains to boot. As the locked-down multitudes spent some of their furlough money on scarce imports, prices began to rise. Corporations with great paper wealth responded by exploiting their immense market power (yielded by their shrunken productive capacity) to push prices through the roof.

After two decades of a central-bank-supported bonanza of soaring asset prices and rising corporate debt, a little price inflation was all it took to end the power game that shaped the post-2008 world in the image of a revived ruling class.

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