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The Ultimate Guide to Inflation

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Re: The Ultimate Guide to Inflation

#91

Post by gruez »

cortesoft wrote: post #73
gruez wrote: post #63

Earlier quoted context omitted.

>I am curious how much of our current "low inflation even with an increasing money supply" is caused by our increasing spending on non-exclusionary goods. Not much? Based on the CPI weights given by the BLS[1] at least 82.238% of the CPI is from non digital goods. This is based on summing up the top level categories which are definitely not digital, ie. Food and beverages, Housing, Apparel, Transportation, Medical ca…

Yeah, that doesn't say how much of actual consumer spending goes into the goods that are included in the CPI. Even if the CPI were based 100% on non-digital goods, the percentage of purchases that go towards CPI goods could be falling.

Perhaps, but how much of a difference can that make? It's hard to imagine many people spending $100+ on new SaaS/digital goods because of the pandemic.

Re: The Ultimate Guide to Inflation

#92

Post by LudwigNagasena »

cortesoft wrote: post #34

I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…

> The marginal cost for a new subscriber is practically zero, so there should be no price increase caused by a shortage.

Digital goods aren’t priced at marginal cost. By your logic not only an increase in money supply would have no effect on the price of digital goods, but the price of digital goods should be 0 before and after the increase.

Re: The Ultimate Guide to Inflation

#93

Post by splitstud »

lottin wrote: post #31
sbelskie wrote: post #9

Earlier quoted context omitted.

You’re correct that the recent uptick is unprecedented, but given that the other graph (shared by Nobel prize winning economist) shows no stable relationship between M2 and inflation, why does it matter? He might be wrong and you might be right, but that graph alone doesn’t tell that story.

These morons are trying to pump a certain crypto-token by instilling inflation fears, but since inflation has been a non-issue in the US since the 1970s, they are now trying to shift the focus to the money supply as if it had any relevance at all.

Do you truly believe that printing unprecedented amounts of money will have zero effect on the real value of that money?

Re: The Ultimate Guide to Inflation

#94

Post by leg100 »

deanak wrote: post #49

So far it's a lot of words and graphs with a tenuous grip on reality in a few places: > There are, however, some groups in lower income brackets that do poorly in inflationary environments. If someone doesn’t have a lot of money and lives on a fixed income in retirement, they have a lot of vulnerability to inflation. Those sorts of folks should consider owning inflation hedges to protect their lifestyle, if they expe…

The idea that workers were lording it over the rich from the 1930s through to the 1970s is preposterous. Unless the words political and control have been twisted to mean their polar opposites.

Re: The Ultimate Guide to Inflation

#95

Post by sgerenser »

lotsofpulp wrote: post #15
treeman79 wrote: post #6

Didn’t see healthcare. My dads carefully planned retirement was ruined because he never imagined how expensive it would get. I pay 1400 a month for a family. Still doesn’t cover a lot.

I have no idea how families that earn less than $100k are saving enough money for healthcare expenses / loss of income in their years between 50 and 65 (or whatever age Medicare will start at in the future). Unless you have a cushy government job with those benefits or a high paying white collar job, those years are the most likely for you to lose income due to age, health reasons, etc and any new job you get probabl…

With ACA that’s only really a problem for those just over the income cliff. Health insurance costs after subsidy for most retired folks pulling, say, 50k-60k or so per year from retirement accounts and social security are pretty low.

Re: The Ultimate Guide to Inflation

#96

Post by deelowe »

aazaa wrote: post #84
nine_zeros wrote: post #81

Earlier quoted context omitted.

Crypto

Or... crypto and the commodities have it backward. The gold market is right. Prepare for the opposite of what the media are hyperventilating about now - a ridiculously strong dollar and deflation.

My advisor is saying the fed is try to staving off deflation still.

Re: The Ultimate Guide to Inflation

#97

Post by Black101 »

cortesoft wrote: post #34

I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…

They don't price things based on cost, they price them based on what you are willing to pay.

Re: The Ultimate Guide to Inflation

#98

Post by mensetmanusman »

“ The power of technological deflation is important not to overstate, though. In everyday use, the rise of the smart phone displaced a lot of house phones, cameras, video recorders, film, CD players, iPods, beepers, radios, scanners, roadmaps, and many ATMs. They also displaced a big percentage of physical newspapers, calendars, dictionaries, encyclopedias, and books. In more niche areas they displaced some mobile game devices, pocket translators when traveling, compasses, voice recorders, and photo scrapbooks. We folded many of our devices and consumables into one powerful device with dozens of software applications.”

This, and we haven’t even discussed the amazing tech in food production that is getting better daily. (Satellites telling tractors in iowa what to do based on hyper spectral drone flyovers).

I remember our family taking a few years monthly payments to get me encyclopedias, and now we have wiki.

Re: The Ultimate Guide to Inflation

#99

Post by omalleyt »

aazaa wrote: post #80

> Inflation: During periods of moderate to high inflation, gold and commodities tend to do extremely well. Equities outperform bonds more often than not, but it depends on the type of equities and their starting valuations, and therefore have a huge variance. Real estate does well, mainly because leverage attached to it gets melted away from inflation. Bonds do poorly in inflationary environments. The article doesn't…

Gold went up a lot in 2020. It’s underperformance in the past few months is because Treasury rates ripped higher, which made owning bonds more attractive. However, rates can’t rise much more, or the UD gov’t will be unable to service its debt. Therefore, gold has begun to climb again

Re: The Ultimate Guide to Inflation

#100

Post by mensetmanusman »

klipt wrote: post #67
spaetzleesser wrote: post #50

Earlier quoted context omitted.

Post scarcity only for certain things. Things like living space are becoming scarcer and more expensive.

Living space in rural areas is cheap. Living space near good jobs is what's scarce.

In comes a pandemic induced remote work experiment and global satellite internet thanks to SpaceX.

An unforeseen black swan of a decade.

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