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The Ultimate Guide to Inflation

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Re: The Ultimate Guide to Inflation

#301

Post by maxsilver »

treeman79 wrote: post #134
ClumsyPilot wrote: post #123

Earlier quoted context omitted.

Housing prices are not driven by scarcity, they are driven by financialization of our economy. There are multiple cities in England where population has decreased but house prices increased. During lockdown 700k people left London, but house prices kept going up.

Triple the housing supply. Prices will go down.

The Midwest US can assure you that they've definitely already tried this. We're literally mowing down every cornfield for housing here (I'm typing this from a neighborhood with thousands of units, 90% of all buildings here were built after 2012). It never works, prices are still at an all-time high, even for units on the market 6+ months or longer.

"Just building more" alone isn't ever going to lower prices enough to make housing affordable for most, no matter how many more units you build.

You have to decommoditize housing, or stop force-preventing natural depreciation, or at least put ownership caps on it, or some other thing in addition to the construction.

Re: The Ultimate Guide to Inflation

#302

Post by mlyle »

anon98356 wrote: post #264
mlyle wrote: post #193

Earlier quoted context omitted.

Thanks, and I understand that... but I feel like you don't understand the context of my reply. Mr. Beer above stated that an increase in demand for Netflix would not increase the market price of Netflix. But because Netflix is a quasi-monopoly, they would be likely to increase prices to find the new equilibrium maximum profit point. That is, he made a microeconomic argument which was invalid-- arguing that because Ne…

My reading of GPs comment was more about the cause and effect of any corresponding price increase, not whether Netflix would actually increase their price in this scenario. For a physical good, if you have a surge in demand as more people can afford you're product you start running into supply issues. This will likely result directly in a price increase as you can't increase profit by just selling more when you don't…

Sure, there's no "force" to increase the price. But finance and marketing wonks read books like "Pricing and Revenue Optimization", and seeing a big upswell in demand are tempted to do the math again and see what the new maximum profit point is if they have pricing power.

Re: The Ultimate Guide to Inflation

#303

Post by woofie11 »

inter_netuser wrote: post #181
speeder wrote: post #164

Earlier quoted context omitted.

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.

I don't believe your number. Citation required. And I'm serious about that. I'm sure it's possible to get that number somehow, but the devil is in the details.

Do you factor in:

- Famines?

- Wars?

- Being killed by bandits?

- Are you talking about the city of Rome? Italy? Gaul?

- Just rich people, or do you include folks like slaves?

- Etc.

If you're going to accuse me of giving bad information, you'll need to provide better information. And from there, you need to count on dubious records. I took my number from Crash Course history (the unit on the middle ages), but it meets what I'd previously read across multiple credible sources.

Re: The Ultimate Guide to Inflation

#304

Post by tinyhouse »

nine_zeros wrote: post #138
aazaa wrote: post #84

Earlier quoted context omitted.

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.

Crypto has provided an alternative to gold. The same printed dollars that would normally go to gold is flowing into crypto. The new generation of gold miners are not mining gold. That's why gold hasn't risen dramatically. Crypto is absorbing the inflation.

People who fear inflation not gonna put their dollars into crypto. Too speculative. They would buy land or silver etc.

Re: The Ultimate Guide to Inflation

#305

Post by saiya-jin »

lbschenkel wrote: post #276
wodenokoto wrote: post #266

Earlier quoted context omitted.

Thanks for the great story. I’d love to hear more about why the real was successful. Wikipedia makes it sound like it was just luck that Brazil had positive trade balance in the years following its introduction.

Economics is not a subject that I can say that I know anything about, so this is my completely subjective interpretation. I think the problem was that Brazil got into a positive feedback loop, and we had what Wikipedia calls "inertial inflation" [1]. We got this going for so long that everybody internalized the inflation, and expected it, and behaved as it was a foregone conclusion that there was going to be inflatio…

why didn't everybody switch simply to USD? That's some hard cash that doesn't care about some petty Brazil's issues. Anything local in such a situation, no matter how well designed or intended, would be suspicious to me.

Re: The Ultimate Guide to Inflation

#306

Post by atq2119 »

tomp wrote: post #265
atq2119 wrote: post #258

Earlier quoted context omitted.

FWIW I agree with your thought process here. Proclamations of certainty around UBI are common, but the only intellectually honest position is that we simply do not have enough empirical data to tell with a useful level of confidence how a UBI would affect inflation. Also, I believe that the only way to collect that empirical data is to implement a UBI at a sufficiently large scale and see what happens.

There really is no reason why you wouldn’t be able to pair government intervention on the demand side (i.e. UBI) with government intervention on the supply side. Simply introduce quotas about supply (e.g. that shops cannot throw away more than 1% of the food they sell), and/or limits on non-productive assets (e.g. freeze rents & Netflix subscription). I’m sure there are many smarter interventions than I was able to c…

Micro-management like that very often fails, though. What do you suggest shops do if they risk crossing the 1% threshold, for example?

I agree that a lot can be done if you're careful about how you do it, but if you aren't careful enough, you may easily make things worse.

Re: The Ultimate Guide to Inflation

#307

Post by nradov »

tomp wrote: post #265
atq2119 wrote: post #258

Earlier quoted context omitted.

FWIW I agree with your thought process here. Proclamations of certainty around UBI are common, but the only intellectually honest position is that we simply do not have enough empirical data to tell with a useful level of confidence how a UBI would affect inflation. Also, I believe that the only way to collect that empirical data is to implement a UBI at a sufficiently large scale and see what happens.

There really is no reason why you wouldn’t be able to pair government intervention on the demand side (i.e. UBI) with government intervention on the supply side. Simply introduce quotas about supply (e.g. that shops cannot throw away more than 1% of the food they sell), and/or limits on non-productive assets (e.g. freeze rents & Netflix subscription). I’m sure there are many smarter interventions than I was able to c…

Government price controls inevitably cause shortages and black markets. It is completely infeasible to enforce a limit on throwing away food.

Re: The Ultimate Guide to Inflation

#308

Post by midasuni »

matthewdgreen wrote: post #293
MontyCarloHall wrote: post #284

Earlier quoted context omitted.

Yes, and they’ve also improved by orders of magnitude in terms of processing power, camera quality, etc. Today’s top-end iPhone probably would have cost upwards of $10,000 in 2015, if it were even possible to manufacture. As an aside, someone did a back-of-the-envelope calculation and found that the equivalent computing power of a 2014 iPhone would have cost $32 million in 1991: https://www.aei.org/technology-and-inn…

Yes, but so what? My current iPhone now devotes trillions of potentially-useful cycles to NOPs or processor sleep cycles. Does this mean that $32m of actual value is being created for me?

That’s key, people are spending more on mobile phones now than they were a decade ago. The benefit they get is difficult to quantify on an individual basis, certainly the difference between a phone from 5 years ago have very little difference than one from today, better camera perhaps, but how many people who bought a separate camera in 2016 don’t bother now.

Re: The Ultimate Guide to Inflation

#309

Post by mac01021 »

midhhhthrow wrote: post #118
bob33212 wrote: post #47

Earlier quoted context omitted.

We are entering a Post Scarcity Economy. A lot of fiction books write about how this plays out. Regardless of what happens a lot of economic theory becomes less relevant. https://en.wikipedia.org/wiki/Post-scarcity_economy#:~:text=... .

It’s just the opposite. The essential goods needed for survival: shelter is becoming more and more Scarce. 34% of millennials can’t even afford their own shelter anymore and are forced to live with parents. Those who can live by themselves are paying over 40% of their income on shelter. There’s been a pretty dramatic drop in living standards here in the US over the last several decades The fact that we can now afford…

I'm not convinced that there's been a dramatic drop in living standards in the US over the last several decades (or that, where there has been, it's not mainly a matter of individual choice).

Think about life in the USA 70 years ago:

Do we think that much fewer than 34% of 20-to-30-year-olds lived in multigenerational households? The average square-footage of new homes more than doubled between 1970 and 2015.

Certainly people spend far more on healthcare, education, and transportation now than then. But aren't those goods and services that were simply not available at all to a large fraction of the populace? 10% rather than 30% of people went to college. Most conditions for which people seek medical treatment now probably went untreated.

So many people in 1950 eked out their existences living in a multigenerational house with a single bathroom and no car. Never traveling out of state or experiencing middle-class city culture. Walking a mile to work or performing farm labor more than 8 hours a day. The world is very different today, but it's not at all clear to me that living a comparable lifestyle is not an option for most people today.

Re: The Ultimate Guide to Inflation

#310

Post by mac01021 »

maxsilver wrote: post #301
treeman79 wrote: post #134

Earlier quoted context omitted.

Triple the housing supply. Prices will go down.

The Midwest US can assure you that they've definitely already tried this. We're literally mowing down every cornfield for housing here (I'm typing this from a neighborhood with thousands of units, 90% of all buildings here were built after 2012). It never works, prices are still at an all-time high, even for units on the market 6+ months or longer. "Just building more" alone isn't ever going to lower prices enough to…

Are all those new houses occupied? Where are all the people coming from?
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