Earlier quoted context omitted.
It is a feeling to ppl who want to start a family, buy a house. Official Inflation doesn't count for those. What else is the word that we can use here?
Cost of living.
rents are falling though. so not the same.
Food Prices Are Soaring Faster Than Inflation and Incomes
481–490 of 605 posts
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#482Earlier quoted context omitted.
>From a finance perspective, theres no difference between food and a share in a corporation Clearly not. After you eat a bread, it's gone. After you live in a house it's still there. A better analogy would be something like a farm, which continuously provides sustenance as a service. >The primary purpose of a house is to, well, house people. Shelter is a necessity. People who are most vulnerable to inflation are the…
> Clearly not. After you eat a bread, it's gone. After you live in a house it's still there. After you live in a house a long time it falls apart. Capital Expenditure restores the asset to its previous value. Bread just depreciates faster. but can still be traded, bought and sold. In Japan houses are often only ever used by one family, and the house is destroyed when the land is sold. I am taking your insistence on a…
>After you live in a house a long time it falls apart. Capital Expenditure restores the asset to its previous value. Bread just depreciates faster. but can still be traded, bought and sold. In Japan houses are often only ever used by one family, and the house is destroyed when the land is sold. I am taking your insistence on a cash flow perspective to its logical extreme to show that it is not always applicable.
1. the part of a house that's getting expensive isn't the house itself, it's the land. the multi-million dollar homes in san francisco would only be worth a few hundred thousand tops if they were moved to rural idaho.
2. corporations fall part too. more specifically, their physical assets (eg. machines in factories) fall apart. In both cases they're kept up by routine maintenance. The only difference is that in a corporation the maintenance is paid from revenue before profits/dividends are paid out, whereas in a house the maintenance is paid out of pocket by the owner.
3. it's not a question of deprecation. after you eat a piece of bread it's gone. that's not due to depreciation, it's due to you consuming it.
>I clearly say at the end that if CPI is not measuring these price increases we should use a different measure. I'm not sure you understand what's going on in this conversation, but food is in the CPI.
That's my original point. Rent (and imputed rent) is directly measured in the CPI, so there's no need to measure home prices.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#483Earlier quoted context omitted.
Yes, but those professions have agreed upon norms and standards that can be measured. Did you win, Does it taste good, is it accurate and easy to follow, etc... Economists are all over the place you an pick and choose different theories to support any Point of view.
I'm sorry, but no, they don't. Out of all of the examples I used, only one has agreed-upon norms and standards that can be measured : racing. All the other examples I used -- chef, journalist, writer, singer -- can win awards and recognition: Michelin stars, Pulitzer, Hugo, Nebula, Grammy, and such. Those are good indicators of their accomplishments, but that's not the same as having a set of "agreed-upon norms and s…
I don't dismiss the profession. I dismiss the professionals. They need to provide more proof then identifying as a professional exactly because it is not a science. I also need to understand their biases and agenda.
Honestly it's usually easier to just ignore them and give their opinion no weight greater then anyone else.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#484Earlier quoted context omitted.
> What actually matters is how much you spend per month on rent, or if you owned your house, the imputed rent. Right, but in most markets rent prices track property values. The long-term upward trend in housing prices is inflation to approximately everyone who doesn't own a house. Which, significantly, includes approximately everyone under the age of 20 or not yet born. > From a finance perspective there's no differe…
>Right, but in most markets rent prices track property values. The long-term upward trend in housing prices is inflation to approximately everyone who doesn't own a house. Which, significantly, includes approximately everyone under the age of 20 or not yet born. and that's fine, because rents are tracked directly in the CPI. >But most people are not buying housing primarily as an investment. Most people are buying ho…
> but from an analytical perspective there's no difference
Only for embarrassingly impoverished analytical frameworks.
Unless you know of a bank that will loan me seven figures at sub-3% interest rates based on 10% down and my income, and then let me spend that money in the stock market :)
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#485Earlier quoted context omitted.
> the nominal increase is of 4.3%, and that was during a pandemic year Well, of course. Using office space in many areas is illegal, and even where it's not, it's unwise. People are substituting residential-housing space, instead, so demand is way, way up. Construction is booming, but not so quickly as to take the edge off those prices. > with a rent moratorium ?!?!? whatchew talkin' 'bout
I'm not talking about the increase in value, I'm talking about housing expenses. There is/was a rent moratorium in the US, which would have reduced housing expenses in practice.
> There is/was a rent moratorium in the US
But that's just not true. There may have been some small local/regional areas that did (not aware of any, but maybe...) and some individual landlords may have, but there was never a federal rent moratorium.
What was done at the federal level was a temporary _eviction_ moratorium... but rents are still incurred and due (plus penalties and interest for late payments.) The restriction is simply that landlords can't evict during the period of the moratorium for late/non-payment anyone who lost jobs/hours during the pandemic and would likely become homeless or be forced to live with additional people.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#486Earlier quoted context omitted.
> But if someone's "punishing savers" and "perpetuating consumerism", it's not the index, and it's not the people compiling the index, and it's not the people trying to make the index more accurate by adjusting for quality. I’ve seen this a lot around the net and I’m honestly and genuinely curious. What drives you to defend the CPI?
>What drives you to defend the CPI? What drives you to question the motives of the commenter rather than responding to his arguments directly?
I have no intention of refuting his arguments. I have no strong position on the value of the CPI. OTOH I’ve noticed repeated vociferous defenses of the CPI across various Internet forums which seems out of the ordinary for me, so I’m naturally curious in what drives it. This is not trying to dismiss his argument, I just want to understand from where it’s coming because I think I’m missing something.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#487Earlier quoted context omitted.
He's right, defending the CPI calculation is almost criminal. Many people on fixed incomes that are adjusted based on the CPI are negatively affected. This bogus formula will be conveniently altered to stay under 2% if inflation creeps into the basket of goods being calculated.
>He's right Perhaps, but the right way to approach this is to point out the factual errors, rather than making thinly veiled insinuations that his opponent is a shill for the BLS or whatever. >defending the CPI calculation is almost criminal Ah yes, because the only possible explanation for why people don't hold the same beliefs as you is because they're acting with malice. For this and the previous point I refer you…
> making thinly veiled insinuations that his opponent is a shill for the BLS or whatever.
That was definitely not what I was doing at all. If I am giving off that impression then that’s my mistake but this is purely a curiosity.
> Please don't post insinuations about astroturfing, shilling, brigading, foreign agents and the like. It degrades discussion and is usually mistaken.
> Assume good faith.
Please do me the same courtesy friend. This is out of a genuine curiosity for knowledge.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#488Earlier quoted context omitted.
> Good X and Good Y both increase in price over some period of time, but one does by 2% and the other by 4%. What is the true value of inflation? 2% or 4%? Or is it 3%? Or is it 3.5% because you buy one of the goods twice as often as the other? That's a question of first philosophical origins, and there's no "right" answer. Shouldn't the solution basically be how much monthly or yearly does an average consumer spend…
Yes. What then should happen when Good Z is invented and grows from 0% to substitute for 25% of Good Y? How should a measure of inflation track that? What if Good X becomes half as expensive per unit but people consume twice as much of it as a result? Should that be reflected as a reduction of inflation? If housing per front door goes up by 100% but only up per square foot [or room] by 50%, should the inflation rate…
TBH looking at my budgets I think this type of argument is missing the point.
Excluding savings, My budget boils down to discretionary and non-discretionary spending. Roughly 1/4th of my budget is fully discretionary and will vary year to year with what I like to do, tracking inflation on the discretionary portion seems like a high difficulty activity which ultimately doesn't matter to my perception of prices.
The remaining 75% of my budget is non-discretionary covering items like
- Housing ~1/4
- Childcare ~1/4
- Food ~1/8
- Non-discretionary expenses (repairs, car, phone, computer, etc. ) ~1/8
I'm fortunate that my healthcare is inexpensive at the moment, but it's pretty straightforward to calculate my future expected health costs and my previous education costs. I'd judge that calculating inflation on the non-discretionary portion of my budget should be trivial, small items like phones/computers simply do not add up to much relative to the big ones like housing, childcare, food, health, and education.
Ironically the CPI seems to focus on the magic basket of goods and not what will actually move the needle for perceived costs by most individuals.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#489CPI is a joke, they do something called hedonic adjustments to things like tech products etc. It's completely subjective and BS. Technology is deflationary, things should get cheaper because we go after producing them in creative ways one demand is high. CPI is absurd, it only perpetuates consumerism and punishes savers. We product 2x the food society consumes - mostly wasted away, just with some supply chain efficie…
> It's completely subjective and BS
Any measure of inflation is subjective. That doesn't make it B.S.
Inflation is a measure on a basket of goods. There is no single basket because people buy different things. This is why there is no single CPI statistic.
Find a CPI that works for you. The federally-provided ones go as fine-grained as income bracket and metropolitan area. They're extremely precise, but may not be accurate if you have unusual purchasing habits.
Re: Food Prices Are Soaring Faster Than Inflation and Incomes
#490Earlier quoted context omitted.
> But, this describes maybe a few dozen housing markets. Its a national problem https://www.redfin.com/us-housing-market 'few dozen' is what like 3 dozens? Assuming its a problem only in 36 markets. Wouldn't that be a 'national problem' ? 36 markets should covers a majority of population in the country.
Because relatively few regional housing markets have non-luxury 2 bed condos going for $525,000 (75K over 450K, per your original post). E.g., in the Midwest you'd have to be in a nice part of Chicago or choosing the most expensive city neighborhood of a mid-sized city to find a meaningful number of $525K 2 bed condos. And even then, spending that much on a condo is 100% an unnecessary luxury. 10 minutes in any direc…
Our old apartment in Chicago, which was in a nice neighborhood had its rent prices drop by at least $500/month. It might be more now.
When I look at real estate in general in Chicago, it's been dropping a little, not a ton, but it's not like how other are describing the huge increase in housing costs in other parts of the country.
It seems like there are big regional differences going on with housing costs in the US. Supply/demand and policy I'm guessing are making the difference.