What caused inflation?

[QuarterMillionMan]

Gasoline went from $2 to $6 (here in Los Angeles), although today it's dropping steadily now $4.59. Lumber went 3x. Houses went from red hot to white hot during COVID. New & used car prices soared. Groceries at record highs. Rent high. Airfare through the roof, etc.

Supply & demand. During COVID goods weren't being products and demand was strong hence inflation, I believe. Also, shortage of workers. Some retired, others could not work or were fired for not getting vaccinated, this increasing costs for airfare and other services. Backlog of ships at the ports of Los Angeles & Long Beach at one time having over 100 ships waiting to dock. Shortage of micro chips hence driving up the price of cars. Oil reserves at its lowest thus high oil and gas prices. What else caused all this inflation (no politics).

[Fishindude77]

Considering the "no politics" restriction, I don't have much to add.

[ua_guy]

Some of that has resolved, and some not. Domestic oil production, last I heard, was just catching up to pre-pandemic levels but refining is still a bottleneck, and there's more demand now. Demand fell with gasoline price surges, but pricing hasn't changed much. Note that oil companies continue to rake in record profits and barrel prices are not correlating to prices at the pump (much higher than would be expected for current barrel pricing). That suggests oil companies are holding the price of fuel arbitrarily high. Diesel remains high, and that adds cost to...everything. Computer chips are still a bottleneck for producing enough goods to keep up with demand and they are costing more.

But another factor I don't think we've talked about is the economy. The economy is a cause of inflation. There are a lot of very bright spots and companies are hiring. Inflation is also a sign of an overheating economy.

[LivingAlmostLarge]

keeping interest rates super low and printing money like crazy for stimulus?

[bjl584]

Lots of factors.
The Fed keeping rates too low for too long while printing endless money didn't help
Shutting off the global economy during the Pandemic
A generally overheated economy

[myrdale]

I would guess that inflation is the result of the lessening of the value / purchasing power of the dollar.

I people have less faith in the dollar, its value decreases.

If the government injects excessive amounts into circulation, its value goes down.

I suspect interest rates are tied to it. If people can borrow more money for less, this lessens the value.

My personal fear is that there is some component of exponential growth no one recognizes or admits to. If $2,000 bought you a house in 1900, a car in 1960, and nice shotgun today, in another 60 years it will be less than a week's worth of groceries. How steep does that curve get, and how high does it go before it breaks?

[LivingAlmostLarge]

it's also that we have been used to things not increasing with inflation with the advent of our technological advances and things becoming cheaper. When really there needs to be some inflation.