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The Ultimate Guide to Inflation

lynalden.com

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Re: The Ultimate Guide to Inflation

#331

Post by matheusd »

saiya-jin wrote: post #305
lbschenkel wrote: post #276

Earlier quoted context omitted.

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.

Everyone sorta did, since initially Real was nominally pegged to USD at a 1=1 rate and monetary policy was used to maintain that peg.

This blew up in 1999 with the depletion of internal USD reserves.

Re: The Ultimate Guide to Inflation

#332

Post by anm89 »

anm89 wrote: post #314
deanak wrote: post #283

Earlier quoted context omitted.

> shes just trying to step back and analyze... And it is a much more useful an interesting perspective on the world than turning every single discussion into team sports politics. When is the last time you read a serious financial analysis that divided up 150 years of world history in such a way? Or tried to relate it to investment? > The fact that the parent is one of the more upvoted comments I've ever written seem…

> When is the last time you read a serious financial analysis that divided up 150 years of world history in such a way? Or tried to relate it to investment? Ray Dalio, the founder of the world's biggest hedge fund does primarily this in his public communication. Anyway suit yourself, the whole point of it not being team politics is that it really doesn't matter at all if people disagree. I factor her advice heavily i…

A second point

> Does that mean you're correct?

Yes it does. Because I'm not playing team politics, it is not competitive, in the sense that there are two sides where one wins.

I'm stating that people find this take useful. The fact that it is getting updated indicates that people indeed do find it useful. In that case it is tautologically correct.

As mentioned before, the awesome thing about playing my game instead of your game is that the fact that you disagree is totally meaningless to me, as I mentioned I'm not on a team, I have no opponent. Unless you have a way to stop me from using Lyn Alden's advice, I simply place zero value on your opinion and move on. (except in the sense that it is fun to point out the fallacies for sport in the context of a message board).

Re: The Ultimate Guide to Inflation

#333

Post by alex_smart »

yunohn wrote: post #275
alex_smart wrote: post #71

Earlier quoted context omitted.

>The marginal cost for a new subscriber is practically zero, so there should be no price increase caused by a shortage. Yeah, I don't think that that argument works at all. The price does not increase due to "shortage", it increases due to an increase in consumers' willingness to pay. Going by the Netflix example, if Netflix realizes that not too many people will cancel their subscriptions if they were to increase th…

> Indian market is much more price sensitive That’s an odd way to say India is way poorer, and there’s no way the avg Indian can afford to pay a US price for Netflix. People being price sensitive is only an additive effect on top of that. (India => any developing country)

It might sound an odd way to phrase things, but it was both more fine-grained and more meaningful than your rephrasing.

The average Indian earns less than 4 dollars a day. The average Indian still buys their shampoo in little 5ml sachets that cost 2cents because they can't afford the full bottle even though buying the full bottle would be cheaper in the long run. So, the average Indian definitely can't afford to pay the Indian price for Netflix either.

The average Indian is not the target market of Netflix or of any Internet business. All the talk of India being a market of a billion users is nonsense. Only the top 5 percent, maybe 10, of people in India have the disposable income for them to be a potential target customer for most businesses. For all intents and purposes, India is a market of ~50-100 million customers.

When I say that the Indian market is much more price sensitive, I am talking about this group of people, not the average Indian. The reason Netflix is priced half of what it is in the US is because this group of people are willing to pay that much for Netflix. The average Indian is simply not a relevant concern.

Re: The Ultimate Guide to Inflation

#334

Post by imaginenore »

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.

How the hell would you have deflation, when the government is printing dollars at ridiculous rates? When prices of everything are going up.

https://fred.stlouisfed.org/series/M1SL

Re: The Ultimate Guide to Inflation

#335

Post by xyzzyz »

deanak wrote: post #313
xyzzyz wrote: post #75

Earlier quoted context omitted.

> If you think someone in a low tax bracket on fixed income has the spare money to invest in anything, you're not understanding the words "low income" or "fixed." The low fixed income often comes from investment. For example, you save money in 401k, then as you near retirement, you shift investments into safer instruments ie. bonds. The result is exactly low fixed income and vulnerability to inflation.

https://www.epi.org/publication/retirement-in-america/ > Nearly half of families have no retirement account savings at all. https://www.nytimes.com/2021/01/26/upshot/stocks-pandemic-in... > Families grouped by percentiles of net worth: > Bottom 50: 50% of Families | 1% of Equities | 0% of Stock I'm not sure why you think the poor have investment portfolios. They don't.

> I'm not sure why you think the poor have investment portfolios. They don't.

I never said or implied anything of the sort. I recommend reading carefully what I actually said, and then addressing that instead.

Re: The Ultimate Guide to Inflation

#336

Post by alex_smart »

Qworg wrote: post #268
alex_smart wrote: post #71

Earlier quoted context omitted.

>The marginal cost for a new subscriber is practically zero, so there should be no price increase caused by a shortage. Yeah, I don't think that that argument works at all. The price does not increase due to "shortage", it increases due to an increase in consumers' willingness to pay. Going by the Netflix example, if Netflix realizes that not too many people will cancel their subscriptions if they were to increase th…

The issue with the WTP argument is that Netflix isn't a singular good - there are many replacement goods (Hulu, Disney+, Prime Video) that push down the price via competition. The lack of raw materials makes this competition especially good at keeping prices low. Now, if the oligopoly within video services (or anywhere else) would conspire to raise prices together - that'd be a different story. We've seen this in oth…

I disagree. I don't think that different streaming services are replacements of each other. It is inaccurate to think of them as mere "video services" (if they were even Youtube would a substitute which it clearly isn't). Their value is in the exclusive rights they have secured for different content. If a streaming service has an exclusive deal with any one of your favorite shows, you are pretty much going to have to buy it.

Speaking for myself, I have bought the subscription of at least four video services in India.

Re: The Ultimate Guide to Inflation

#337

Post by dnautics »

anm89 wrote: post #322
dnautics wrote: post #207

Earlier quoted context omitted.

While most of the article is good, It's really sad that she apes the old refrain that inflation hurts the poor because they are in debt. Many of the poor cannot even be in debt because they have no access to the financial system. Those that do, mostly have access to payday lending. It's laughable to hold the opinion that inflation will do anything for someone who owes 10% on top by next month. For the middle class, i…

I think you are misunderstanding her argument and tbh I don't think anyone makes the claim that inflation hurts the poor because they are in debt. If anything it is the exact opposite. Inflation is a benefit to debtors because they get to pay back principal in devalued currency. That's why a cheap 30 year mortgage is an amazing deal in an inflationary environment Inflation hurts people who don't have access to debt a…

Holy mistype. In GP post I meant to type "good for the poor because they are in debt", which is what Lyn uncritically forwards in OP as a (to be fair common) argument.

"lower classes also have more debt which gets partially inflated away in inflationary environments, and..."

Also the wealthy benefit greatly from debt-based financial instruments (corporate bonds for the companies they run, leveraged trading, forex, options) even if they aren't in debt personally.

Re: The Ultimate Guide to Inflation

#338

Post by fedreserved »

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 expense that matters most to Netflix is cost of content. They are trying to hedge this by creating their own, to fight against the rising cost of purchasing from middle men but they will still need to license content from others . As their subscribers increase, next contracts negotiations are going to be that much more contentious

Re: The Ultimate Guide to Inflation

#339

Post by shkkmo »

syshum wrote: post #279
shkkmo wrote: post #165

Earlier quoted context omitted.

The US does really well at high end care. It does less well in terms of overall agregate health outcomes. As I recall last time I saw a really good analysis if this posted to HN, You have to take into account a few other risk factors (obesity etc) in addition (to how infant mortality it reported) to get the US health outcomes inline with other developed nation. Even then, the US ends up paying way more to achieve tha…

>>You have to take into account a few other risk factors (obesity etc) i I disagree, we have a free society, and one of my concerns about a government run health care system is that it would allow encroachments upon that freedom. I do not need or want a parent via the government. I neither need nor want the government passing laws to control what food I eat, how much food I eat, or what health choices I make The ques…

You entirely misunderstood what I was saying. Take a moment be read stuff carefully before you start arguing.

Re: The Ultimate Guide to Inflation

#340

Post by N1H1L »

maxsilver wrote: post #317
mac01021 wrote: post #310

Earlier quoted context omitted.

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

- A bunch are staying un-bought and remain empty. (The bottom of the market is closing in hours , the top of the market is sitting for months ) - A bunch are technically getting occupied, but buyers are having to go way beyond their means to get them. (2008-style, except it's not their fault, you have to live somewhere or die, and you can't manufacture used housing, so it's hard to fault them for taking on risky mort…

But isn't this creating a house of cards? Or are we heading towards China, where there are in many cases more apartments than people and yet prices have never fallen in the last three decades.
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