Inflation is rising, and the feds are planning a rate increase, but it’s not because the Iran war - AI data center spending is the cause

Saltwater60

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I found this very interesting. They claim the Feds will raise the interest rate because inflation. I expected this and they have been talking about it for a while now. Many think the Iran war is the cause of inflation, but CNN is claiming it’s because of the out of control spending to obtain materials and workers to build AI data centers.
I thought this was very interesting timing from CNN and bucks the democratic establishment on why costs are rising. Thought? It makes sense to me.
 
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I call bullshit on this excuse. Data centers are planed, bid and constructed months to years in advance of being operational. This would cool off data centers 2 years from not but not ones in the process
 
spat

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Cavalry said:
I call bullshit on this excuse. Data centers are planed, bid and constructed months to years in advance of being operational. This would cool off data centers 2 years from not but not ones in the process
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Private spending doesn't cause inflation. Only government spending can do that.

Every dollar spent on a datacenter was pulled out of the economy somewhere else, so no net inflation.
 
Saltwater60

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spat said:
Private spending doesn't cause inflation. Only government spending can do that.

Every dollar spent on a datacenter was pulled out of the economy somewhere else, so no net inflation.
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I don’t agree with that.
Government spending isn’t the sole cause of inflation. Minimum wage increases, energy prices increase, and shortages of other supplies can do that. This is what is causing the increases of inflation.
Workers to build these are short so they are paying an increase in wage. That wage increase causes increased spending power possibly causing shortages and increase in costs to other.
Materials to build data centers are in short supply. Them using these resources cause an increase in the shortage causing prices to rise for all other.
Construction equipment uses a lot of energy causing the price to increase. Price increases from energy ripple out to all goods and services causing inflation to rise.
 
Plater1

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Saltwater60 said:
I don’t agree with that.
Government spending isn’t the sole cause of inflation. Minimum wage increases, energy prices increase, and shortages of other supplies can do that. This is what is causing the increases of inflation.
Workers to build these are short so they are paying an increase in wage. That wage increase causes increased spending power possibly causing shortages and increase in costs to other.
Materials to build data centers are in short supply. Them using these resources cause an increase in the shortage causing prices to rise for all other.
Construction equipment uses a lot of energy causing the price to increase. Price increases from energy ripple out to all goods and services causing inflation to rise.
Click to expand...
We have had a dramatic jump in govt spending since Covid. That's why inflation took off in 21'. The recent jump in the price of Diesel is only making matters worse. Nearly everything we buy has been delivered by truck, train, airplane, or ship. They all run on various forms Diesel. The spending on data centers comes from banks and private funding. They are are running out of money. That's a whole different problem. On the brite side when the AI boom goes bust and the global economy takes a crap the price of Diesel will come down.
 
spat

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Saltwater60 said:
I don’t agree with that.
Government spending isn’t the sole cause of inflation. Minimum wage increases, energy prices increase, and shortages of other supplies can do that. This is what is causing the increases of inflation.
Workers to build these are short so they are paying an increase in wage. That wage increase causes increased spending power possibly causing shortages and increase in costs to other.
Materials to build data centers are in short supply. Them using these resources cause an increase in the shortage causing prices to rise for all other.
Construction equipment uses a lot of energy causing the price to increase. Price increases from energy ripple out to all goods and services causing inflation to rise.
Click to expand...
But inflation only happens when the money supply increases or the supply of goods decreases.

And it's only inflation when it's across the whole economy.

Only the government can increase the money supply. Everybody else just takes it from one pocket and puts it in another.

Those materials are in short supply, sure. And supply and demand will make that price rise because of that.

But the money that's being spent on them is coming from somewhere else, so no net inflation. All the expenses in one sector come from revenue in another one, unless you're the government.
 
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Inflation is higher than the Federal Reserve anticipated a while ago, and it’s time to pay the piper. Trump’s deficit spending (added $2 trillion to the deficit in 2026 ALREADY, and about $3.8 trillion this term so far!) and failing Iran war are costing the US dearly. Tariffs were a disaster. But he did promise cheap gas, cheap groceries, and Epstein. Friggin liar. Just another dirty politician. Do you honestly feel better off since he took office? Or do you just tell yourself you’re better off because he’s not a Democrat? Well, guess what? He’s a NYC Democrat that conned you into his scam. But he’s changed several names of inanimate objects and managed to wreck the Reflecting Pool, the White House… No one bankrupts a business like Trump. Winning. Liar.
 
Saltwater60

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spat said:
But inflation only happens when the money supply increases or the supply of goods decreases.

And it's only inflation when it's across the whole economy.

Only the government can increase the money supply. Everybody else just takes it from one pocket and puts it in another.

Those materials are in short supply, sure. And supply and demand will make that price rise because of that.

But the money that's being spent on them is coming from somewhere else, so no net inflation. All the expenses in one sector come from revenue in another one, unless you're the government.
Click to expand...
I mostly agree here.
My point is with gasoline being up many of the CPI inflation measures will increase just because that alone. Gas, transportation, travel, food, goods, service, this is how inflation is measured if they increase or decrease. Right now we are seeing an increase.

Now onto the money from one pocket to another pocket or location. I agree, but if the wealthy or a company has that money sitting in an account and not into the economy and then they do flood the market it could increase inflation.
Say company X has $5billion sitting in an account and they take $2 billion out to build two data centers. They do this by paying a premium to workers, buy steel, aluminum, copper, and wire. All these are in short supply so they pay a premium on it because they have to win the race. This is contributing to inflation and cost increases. Then we add in the travel costs increasing because fuel is an increase in costs so everything is up in relation to building the data center.
 
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A Massive Oil Shortage Is Coming. Here's What This Means For America​


Glenn gives a warning from history as the war in Iran continues to affect gas prices.
 
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