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The Ultimate Guide to Inflation

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Re: The Ultimate Guide to Inflation

#151

Post by woofie11 »

gruez wrote: post #136
sologoub wrote: post #114

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less…

tracing back to the source of the chart... >Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures: > • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market. > • Health care, defined as the annual premium on a typical family health insurance policy. > • Transportation, defin…

Development and economic growth.

In the Roman Empire, people lived 30 years and died. Most were illiterate. As a society develops, and has more excess resources, allocating more and more of those resources on keeping people alive, healthy, and educated seems reasonable.

What's missing from the charts is quality. We spend a lot on healthcare, but we also now have multi-million-dollar MRIs machines and similar magic.

Re: The Ultimate Guide to Inflation

#152

Post by anonfornoreason »

ClumsyPilot wrote: post #129
lupire wrote: post #40

Earlier quoted context omitted.

Businesses charge what customers are willing to pay. If they have more money, they are willing to pay more. Competitiuis the countervailing force, but Netflix has exclusives and serials and network effects (fandoms and friends)

"If they have more money, they are willing to pay more." That's like totally wrong. Goods provide some value to the customer, and that determines what they are willing to pay for it. If I wake up a millionaire tomorrow, that doesn't mean I am suddenly willing to spend $500 the same haircut that was $50 yesterday.

Once you are a millionaire for a few years your brain requires itself around value of time.

I’m not a millionaire but I’m certainly well off, and I just happily overpaid for lumber for a project. At prices that three years ago would have made me cancel the project. Not because I couldn’t afford it but because the perceived value wasn’t worth the price.

Re: The Ultimate Guide to Inflation

#153

Post by simonsarris »

Mentioning M2 without mentioning the accounting change that completely changes the graph starting May 2020 is very odd. Of course the percent change is large when you start measuring a different thing from before.

The simplest explanation of accounting change can be found here: https://www.collaborativefund.com/blog/the-fed-isnt-printing...

But the St Louis fed also publishes a disclaimer at the bottom of their graph about it: https://fred.stlouisfed.org/series/M2

Re: The Ultimate Guide to Inflation

#154

Post by vancan1ty »

gruez wrote: post #136
sologoub wrote: post #114

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less…

tracing back to the source of the chart... >Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures: > • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market. > • Health care, defined as the annual premium on a typical family health insurance policy. > • Transportation, defin…

Here is the rationale given in the source paper: https://media4.manhattan-institute.org/sites/default/files/t...

quoting from paper:

Basket Component: One Semester of Public College

Source: The COTI uses the federal National Center for Education Statistics estimate for total tuition, fees, room, and board at a four-year public institution. 67

Rationale: Two children pursuing four-year degrees would require a combined 16 semesters of college, so a household preparing for those costs would need to save roughly one semester’s worth of cost per year before the children reached college age. (While the savings might ideally earn a positive return in the interim, that return would need to be quite strong just to keep pace with the rate of increase in tuition over the same period.)

The one-semester estimate may overstate costs in some respects—for instance, a family would likely have 20 or more years between the birth of a first child and the college graduation of a second. And in practice, many children do not ultimately attend college (though a small and, it seems likely in recent decades, declining share has chosen from a young age not to consider that path). But it also understates costs by considering only public college costs; private college costs are more than twice as high.68 Note also that the cost of public college tuition already incorporates the substantial public subsidy provided by the state government.

Re: The Ultimate Guide to Inflation

#155

Post by nl »

omalleyt wrote: post #99
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

> However, rates can’t rise much more, or the UD gov’t will be unable to service its debt.

Treasury rates are less than 2%. Prior to 2019 they have never in history been lower[1], except for one month during 2016.

I don't think the market is worried in any way about the ability of the US to service a 2% rate.

[1] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...

Re: The Ultimate Guide to Inflation

#156

Post by harry8 »

atq2119 wrote: post #137
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…

> Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them This isn't actually true, though it's a widespread belief (quite a number of pundits kept making incorrect predictions after the global financial crisis). Where the logic goes wrong is that an increase in money supply doesn't automatically translate into higher disposable incomes. (And highe…

>if you the increase in income isn't extremely unequally distributed

How is your family's net worth percentage change looking compared to Bezos? How is your salary percentage change looking compared to that?

Sorry for laboring your point. It should be labored. Repetatedly & with emphasis.

Re: The Ultimate Guide to Inflation

#157

Post by vmception »

sbelskie wrote: post #143
vmception wrote: post #140

Earlier quoted context omitted.

The court of federal claims still exists, odd one word messed up your google-fu

It was an honest question. It didn’t mess up any googling. I just don’t know anything about the particular legal structure/origin/whatever of the court you brought up, and so I had no way to know if the slight difference in name was meaningful or not.

I could have worded that better, I still think it is odd that the search engine didn't correct you to the most likely correct source.

I honestly wonder what the extent of the accepted arguments are to that court.

Re: The Ultimate Guide to Inflation

#158

Post by tharkun__ »

dntrkv wrote: post #69
pessimizer wrote: post #61

Earlier quoted context omitted.

> If there are suddenly 100 million new people who want to buy a Netflix subscription, it isn't like we are going to see the price of a Netflix subscription go up because there isn't enough Netflix to go around. No, it would go up because they would make more profits with fewer subscribers and a higher margin.

Economies of scale dictate the opposite. Fixed costs stay the same no matter the subscriber count, this would allow Netflix to lower the price, while maintaining the same profits. In reality, they would likely keep the price the same and increase their margins without charging more.

What's the ratios of fixed to variable cost for Netflix and how many subscribers does it need for the economies of scale to go beyond a few cents?

Re: The Ultimate Guide to Inflation

#159

Post by gregwebs »

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…

Lyn Alden actually also has one of the best explanations of the price of gold! [1] It is tightly correlated to the broad money supply modified by changes in real rates (10 year - inflation). In August we saw the 10 year rate start rise and gold start falling. Now the 10 year is consolidating while we have inflation: gold prices seem to have finished their consolidation as well and are going up a bit.

Whether it is a good time to buy gold now really depends entirely on what happens with the 10 year treasury rate. With that being said, the movement of the 10 year and gold are slow, so it isn't that hard to exit a position in gold.

[1] https://www.youtube.com/watch?v=cc5YJZcswvI&t=30s

Re: The Ultimate Guide to Inflation

#160

Post by Jotra7 »

syshum wrote: post #148
neuroma wrote: post #119

Earlier quoted context omitted.

I presume you are in the USA. I watch and marvel at how the USA has such expensive health care and yet apparently has poorer outcomes than other G10 nations, in aggregate. The NHS in my home country is undergoing privatisation of the more lucrative or self-contained components. But it seems important for other countries to watch and learn from this example because free market economics are so often heralded as a solu…

>>yet apparently has poorer outcomes than other G10 nations I assume you have data for this? Something more than the flawed infant mortality rate that is often cited but is a very poor judge of a health system in reality? Something like 5 year cancer survival rates. Time a person waits on Specialist Wait List, the time it takes a person to get a replacement Hip, MIR, or Heart Stent. All of which I believe the US is v…

If you can afford it.
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