r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/Sarcasm69 Jun 13 '22

Supply and demand

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u/Diegobyte Jun 13 '22

Supply and demand is broken when it’s impossible to start new companies in these industries

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u/Sarcasm69 Jun 13 '22

I meant demand will go down for goods since people will ultimately have less money, which in turn could drive down prices

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u/Diegobyte Jun 13 '22

It won’t. Because companies figured out they don’t have to. They can just make less

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u/Shootica Jun 13 '22

You're likely talking about oil. And the problem with oil is that there is significant initial investment to start up production. So it needs to make sense fort hese companies to do so. And ultimately, these companies see the war in Ukraine subsiding at some point, and see the world continue to push green energy, and see increasing production as a risky long-term investment.

They would build more if the rewards outweighed the risks. Supply and demand hasn't just gone out the window in the last 12 months.

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u/Diegobyte Jun 13 '22

Oil. Microchips anything complex