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The Ultimate Guide to Inflation

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Re: The Ultimate Guide to Inflation

#181

Post by inter_netuser »

speeder wrote: post #164
woofie11 wrote: post #151

Earlier quoted context omitted.

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.

What you said is WILDLY wrong. People in Roman empire lived until 90 just like us. For example Seneca de Elder was 92 when he died. The reason why "life expectance" was 30 years was because child deaths, since that number is just an average. If you have 2 people living in a country, one is 100, and the other is 0, and the child dies, life expectancy is 50.

if you ignore infant mortality, life expectancy was late 50s during Ancient Rome times.

not too bad.

Re: The Ultimate Guide to Inflation

#182

Post by inter_netuser »

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…

Canada has socialized healthcare.

200 to 300 thousand travel to the US for healthcare every year. That's with population of ~30 million. Extremely common.

Which begs the question, why do they travel to the terrible USA, when wonderful social care in Canada is so amazing on paper, with wait lists measured in years?

Re: The Ultimate Guide to Inflation

#183

Post by chii »

forgithubs wrote: post #112
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…

Inflation is not always in relation directly to the price. For example, if Netflix is able to get 10,000,000 new subscribers. It receives $100,000,000. It can now spend $50,000,000 on new infrastructure, which will make the price rise. Netflix can also hire for $50,000,000, which creates jobs that otherwise wouldn't exist. Those new employees, working for that new currency will spend their salaries, rising the prices…

but those $50 million of subscription revenue means there's $50 million less spent on something else. And those $50 million paid to employees are for producing value for netflix (presumably, more than $50 millions worth).

So no, this will not increase inflation. The goods produced matches the money spent, so demand and supply continue to match up.

Inflation would occur if production ceases, but demand continues to remain the same (or higher).

Re: The Ultimate Guide to Inflation

#184

Post by [deleted] »

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…

[deleted]

Re: The Ultimate Guide to Inflation

#185

Post by chii »

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's lackluster performance so far say about the future direction of inflation?

some of the gold bugs who would've pushed up the price of gold has switched over to bitcoin (and other cryptos).

Re: The Ultimate Guide to Inflation

#186

Post by throwawayboise »

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…

Worth noting that digital goods, almost all that I can think of, are entirely nonessential. They will be the first things cut if a household budget gets tight.

Re: The Ultimate Guide to Inflation

#187

Post by panarky »

mlyle wrote: post #169
TchoBeer wrote: post #149

Earlier quoted context omitted.

If you permit me to be terribly econ 101 about this, if netflix had a perfectly elastic supply curve (because the marginal cost of an extra netflix subscriber is fixed and doesn't increase with high numbers of subscribers) then an increase in demand would lead to an increase in quantity supplied but not an increase in price.

If you're going to be "terribly econ 101", note that Netflix is not in a perfectly competitive market and almost certainly encounters a downward sloping demand curve... and that its maximum profit point is not going to be at the point where the most units are supplied and may indeed shift as the demand curve shifts.

Many people speak with great confidence about inflation, the money supply and "econ 101". Most of those with the greatest confidence in their own knowledge are not familiar with the fundamental equation of exchange, MV=PQ.

Here, M is the money supply, V is the velocity of money, P is the price level, and Q is the real quantity of goods and services.

It's easy to see that if M increases and Q increases the same amount, then if V is constant, P will also hold constant.

Or if Q is constant and a decrease in V offsets the increase in M, P will again hold constant.

Increasing the money supply by printing money does not automatically cause prices to increase, because there are other variables in the equation.

Re: The Ultimate Guide to Inflation

#188

Post by throwawayboise »

coldtea wrote: post #168
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 Not if the increase in money supply goes from the banks to the already wealthy (as cheap loans), which don't use the extra money to consume, but to invest, buy land, and fund small-competition-crushing rent-seeking endeavours. Then the money supply increases, consumer goods remain more or le…

We saw what happened in 2008 when the loans went to unsophisticated, underqualified borrowers.

Re: The Ultimate Guide to Inflation

#189

Post by pashamur »

clarkmoody wrote: post #180
km3r wrote: post #115

Earlier quoted context omitted.

Every economy in the world has and will continue to operate with some inflation, taking away an inflationary currency is dangerous and will serve to further entrench the wealth inequality we have seen grow over the past century. Sure crypto is nice because you don't have to trust a central government, but you already are trusting that government with the other 99% parts of life, rendering this sort of moot. In additi…

Monetary inflation increases inequality because the well-connected interests (banks, large corporations, governments) have access to the new money first. They have better financing terms. They have special arrangements. They can spend the new money into the economy before general price levels rise. Asset prices rise as people flee from cash, so those with assets see their wealth outpace those without assets. Inflatio…

This depends on how the money is distributed - if we have stimulus checks (and eventually everyone has an account at the FED), for example, it's not true that well-connected interests get access to that money first.

Re: The Ultimate Guide to Inflation

#190

Post by closeparen »

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…

A Netflix subscription buys actors, directors, writers, editors, cameras, microphones, lights, clipboards, trucks, sound stages, hair & makeup, trailers, set decoration, tape, clapper boards, generators, radios, VFX render hours, insurance premiums, producers’ risk, and all the other accoutrements of film and TV production.

There’s a lot of accounting and financial engineering and temporal shifting going on under the hood but ultimately you are paying for real things.

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