Inflation Truthers
awealthofcommonsense.com
Inflation Truthers
1–10 of 99 posts
Re: Inflation Truthers
#2“Cars last longer, require less fuel to operate and are better for the environment.”
That emissions chart looked good. Half as much as 1970. Too bad we have 5 times as many vehicles
There were 250 million vehicles in the world in 1970. 1.3 billion today and we’re projected to go to 2 billion by 2035.
https://en.m.wikipedia.org/wiki/Motor_vehicle#Ownership_tren...
Re: Inflation Truthers
#3Is the author debating a strawman or something? Actually, they just seem confused. At the start, they state asset price increase is not inflation, then, at the end, agree that there is some inflation going on in the real estate space.
So the author is agreeing with the people they're supposedly countering. I don't understand the point of this piece.
Re: Inflation Truthers
#4I'm not saying the article is wrong in general, but I don't get this last bit:
> The government isn’t suppressing the “actual” inflation number. And if they were, they would also be suppressing reported economic growth...
Surely by suppressing inflation they are increasing reported economic growth.
If the dollar value of the economy increases 10% with no inflation, then that's 10% growth, but if inflation was also 10%, then that's 0% real growth. So if the economy grows at the same dollar rate, but you manipulate the inflation number lower, you get more apparent real growth.
Re: Inflation Truthers
#5I'm not saying the article is wrong in general, but I don't get this last bit: > The government isn’t suppressing the “actual” inflation number. And if they were, they would also be suppressing reported economic growth... Surely by suppressing inflation they are increasing reported economic growth. If the dollar value of the economy increases 10% with no inflation, then that's 10% growth, but if inflation was also 10…
Isn't the federal reserve intentionally propping up markets? I thought in one of the reports they argued that there was higher inflation but it was restricted to certain markets like housing and so over all inflation was ~2%.
Re: Inflation Truthers
#6Is the author debating a strawman or something? Actually, they just seem confused. At the start, they state asset price increase is not inflation, then, at the end, agree that there is some inflation going on in the real estate space. So the author is agreeing with the people they're supposedly countering. I don't understand the point of this piece.
Yeah, this article is strange. Not even a mention of the Cantillion Effect, which is what people point to when they're describing "asset inflation".
Re: Inflation Truthers
#7One gotcha about how inflation is calculated (at least in Germany, I assume it to be the same in the US), is that they try to compare identical products. So if this years cars do not have air conditioning, but next years cars do, the prices can increase accordingly without showing up as inflation, because you are getting "more car for more money". The problem appears at the point, when there are no cars without air conditioning anymore: You actually have to pay more to get a car, while your inflation statistics still say, prices have not risen.
Re: Inflation Truthers
#8Is the author debating a strawman or something? Actually, they just seem confused. At the start, they state asset price increase is not inflation, then, at the end, agree that there is some inflation going on in the real estate space. So the author is agreeing with the people they're supposedly countering. I don't understand the point of this piece.
If that's your only explicit criticism, then that's not much of a criticism.
The author was clearly referring to stocks, bonds, and other financial instruments when discussing asset price inflation (he refers specifically to "risk assets"). And then, at the end, he didn't "agree" that there is some inflation in the real estate space:
> Of course, there are areas of the country where housing prices are out of control. But this is how averages work. Some data points are above average while others are below average.
In any case, I don't believe that he's arguing against a strawman. I've seen plenty of discussions on HN alone that the "true" inflation is much higher than the reported inflation, and that this can only be measured by looking at BitCoin prices, for instance.
Re: Inflation Truthers
#9It's a bit confusing what he's arguing against. But his 2nd-last graph is the good one, [1]. That's only 20 years but [2] is the same thing since 1950.
Some things have become much cheaper, other things have become more expensive. Attempting to summarize that in one number seems like it hides more than it exposes, no matter what number you pick.
[1] https://awealthofcommonsense.com/wp-content/uploads/2021/01/...
[2] https://marginalrevolution.com/marginalrevolution/2019/05/wh...
Re: Inflation Truthers
#10I found the “Price Changes” graph about 2/3 down the page really alarming.
Virtually all of the gains in the form of lowered prices are purely in discretionary consumption and subsistence goods. Cheap entertainment, toys, staple foods.
Meanwhile the insane price increases are in critical needs, medical care, housing, college education.
In my mind that graph is pretty strong evidence that there really is massive inflation and the idea of “asset inflation” does exist, contrary to the author’s lead point that it should be seen as normal growth of value.
For most people, if you show them this data and said, “see, low inflation, don’t worry...” they are rightfully going to be pissed off. “Low inflation” except in everything that really matters for health, home ownership and betterment for my children.
I guess I should just thank the monetary policy overlords for my cheap Netflix while we all die of cancer under the thumb of landlords and all our economic participation from labor dwindles and continues to lose purchasing power for what we most need.