Fed chief Jerome Powell warns that U.S. could face "supply shocks"

[Bernardo de La Paz]

1. Supply shocks are different from overproduction or increased demand

Overproduction, often from declining demand, leads to declining prices and cutbacks in production: hence lower interest rates.

Increased demand leads to inflation as more dollars chase scarcer goods, hence higher interest rates.

Supply shocks, like the oil shocks of '73 and '79, lead to inflation due to less supply. But at the same time supply problems put people out of work. Hence stagflation.

The genius of the stable who continually fails Econ Reality 101 has engineered all by himself the stage for a stagflation drama and he can't figure it out. His sycophants compete for attention and confound his confusion.