Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US inflation jumps to 31-year high amid global supply chain crisis

theguardian.com

Post reply on HN
Print view View original

171–180 of 304 posts

Re: US inflation jumps to 31-year high amid global supply chain crisis

#171

Post by fleventynine »

throwawaygh wrote: post #76
standardUser wrote: post #33

Inflation reduces the value of debt and an era of increased inflation stands to benefit a lot of households. Of course, it helps if wages go up alongside prices, and they have. But even without wage increases, the value of debt lost to inflation is likely worth more than the value of salary lost to inflation for many households.

> Inflation reduces the value of debt and an era of increased inflation stands to benefit a lot of households. Maybe. The policy responses to inflation are to increase supply and/or raise interest rates. Both of those put downward pressure on housing prices. So, inflation devalues the debt you owe (good for household) but also devalues the underlying asset (bad for household).

In order for young people to have any chance at the same quality of life of their parents, the "real" value of housing needs to come down to at least 50% of the current value. The only way to accomplish this without wiping out those with mortgages is to have a large spike of inflation. It's painful, but likely necessary.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#172

Post by rsj_hn »

podgaj wrote: post #164
m0llusk wrote: post #70

Earlier quoted context omitted.

That is not a lot of information, though. Processed food has been harder hit than real food and areas that are entirely dependent on trucking because of a lack of ports or rail also have seen much greater impacts.

Poor people, which is a large majority of the United States, can only afford processed food. You neoliberals in your whole foods crap make me nauseous.

Poor people are a large majority? Like, 2/3? 3/4?

Median family income is 80K in 2021. The median HH income for 2021 will come out soon, but it will be north of 70K.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#173

Post by ashtonkem »

rsj_hn wrote: post #160
ashtonkem wrote: post #151

Earlier quoted context omitted.

There have been some supply shocks in the past year, but I'm increasingly convinced that the disaster rhetoric around inflation is more of a political argument more than an economic one. Personally I suspect it has more to do with justifying austerity in order to curb labor's demand for more money than anything else.

> I suspect it has more to do with justifying austerity in order to curb labor's demand for more money The problem with blowing off inflation because you think it empowers workers is that the latest round of inflation more than erased all the wage increases that were provided. In real terms, workers have been falling behind. So perhaps to make those labor demands more real, it might be a good idea if the government w…

To be clear, I think that all of the price movement we're seeing today is a result of supply chain shock and pent up demand. Arguing about inflation while the ports are still clogged seems extremely short sighted to me; of course prices rise when supply is stuck in a container in LA! Once the supply chains clear up, then we can decide what, if any level of inflation we're seeing.

Until that point in time, I will view any doomer narrative about inflation and the proposed solutions for it with extreme skepticism, especially when the proposed solution is convenient for capital and hard on labor.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#175

Post by nostrademons »

simonsarris wrote: post #13

I've mentioned before [1] but these prices still don't seem that serious. Most prices have still not beat their highs made in 2008-2014 (crude oil, global energy price, eggs, milk, sugar, rice, chicken, pork chops). Ground beef is an outlier, however. And US price per kwh is back at its peak, though it declined in these October numbers to be below... 2014 numbers again. [2] So while the climb up is bad, the prices th…

I feel like it's Feb 2020 and people are just hearing about this new virus called 2019-nCoV (or alternatively "China Flu"). There are maybe 100 cases in the whole U.S, your chance of getting it is literally 1 in a million, and nobody has died from it yet. Tech companies are shutting down left and right and the general public is like "What's the big deal?"

The big deal is exponential growth, which both viral spread and inflation exhibit and which almost nobody has a good intuition for. 1.5% inflation over 10 years means that prices go up 16%; this is what most folks (outside of Silicon Valley) have experienced in recent memory. 5% inflation over 10 years means that prices go up 63%. Your Big Mac will cost $6.50 instead of $4. 20% inflation (like we've seen in housing, or ground beef) means that prices go up 6x. Your average house will be $2M rather than $300K.

Folks who look at the numbers and say we're doomed are plugging the data into a mental model of inflation, government debt, and the money supply and realizing that the logical conclusion is that the dollar is going to go to zero soon. Folks who look at the numbers and say there's nothing to worry about are looking at the numbers today.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#176

Post by BitwiseFool »

dlp211 wrote: post #139
BitwiseFool wrote: post #77

Earlier quoted context omitted.

"Transitory" is a deceptively clever phrase. It implies the situation will go back to normal, or even reverse. Truthfully, it just means the increased rate of change in inflation is expected to decrease. Reminds me of a second derivative.

Inflation is a rate. If the rate is transitory, who is being deceptive?

It's the rate of the rate of change that transitory is referring to. The average person, I suspect, isn't thinking about it in these terms.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#177

Post by WarOnPrivacy »

rsj_hn wrote: post #141
coding123 wrote: post #134

Earlier quoted context omitted.

I could go to the grocery store later today and catalog about 400 items for you that have jumped 2 or 3 dollars like that. I am telling you it's insane right now.

You don't need to do that because we have a whole team of people whose jobs it is to measure this in a more systematic way - by checking prices all over the country and in a large number of different stores and for many different goods. They report that dood prices have climbed from 260 to 277 over the last year (all items). Within that group, the biggest climbers were meats, poultry, fish, and eggs (+12%). https://w…

Parent is exampling how IRL challenges look.

It's fairly miserable to endlessly hear how a problem is 1x big when it's actually 4x big for most folks in your region.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#178

Post by adam_arthur »

zzleeper wrote: post #135
boringg wrote: post #27

Hey everyone - we need to chill out for a second. Stop buying the knee jerk reaction of the media trying to freak everyone out and get some good advertising dollars. This is going to take until after the new year maybe Q1-Q3 timeframe to see if it is transitory. Reminder: we had an unprecedented global supply collapse followed by shutdowns and border closures for more than a year combined with historic levels of fast…

Even if it's transitory, what's the reason to keep injecting cash _today_ via buying agency mbs and other securities?

Because Powell wants to get reappointed.

It really has to be that. There's no other logical/sane justification for it. Fed is monetizing govt deficit spending and artificially suppressing long term rates to support asset prices to make things look good in the short term.

On a risk adjusted basis, it's obviously awful policy.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#179

Post by symlinkk »

ASinclair wrote: post #155

There's one thing I've never quite understood. There seems to be some sort of obsession with inflation and Fed policy among the HN/Reddit demographic. Could it be the crossover with interest in Cryptocurrencies? I could be wrong but it's just something I've noticed over the years.

HN and Reddit has a younger crowd that doesn’t have a lot of major assets (like a house, big stock portfolio) so they’re getting the worst of all worlds - the price increases from inflation without the corresponding rise of asset value.

Re: US inflation jumps to 31-year high amid global supply chain crisis

#180

Post by paganel »

nightski wrote: post #57
simonsarris wrote: post #13

I've mentioned before [1] but these prices still don't seem that serious. Most prices have still not beat their highs made in 2008-2014 (crude oil, global energy price, eggs, milk, sugar, rice, chicken, pork chops). Ground beef is an outlier, however. And US price per kwh is back at its peak, though it declined in these October numbers to be below... 2014 numbers again. [2] So while the climb up is bad, the prices th…

It's not the prices people are necessarily scared with, it's the rate of increase. It's higher than was anticipated. What's also concerning is that the velocity of money is really low while M2 money supply is very high. If the velocity picks up we could be in a world of hurt.

> the velocity of money is really low

For those curious (like I was) about the exact numbers for that I quickly found this chart [1] from the St Louis Fed that strongly demonstrates OP's point. Only partially related to this, the sustained downward trend starting with about 2006 is really interesting, I'm wondering if there are any (relatively) recent papers written about this phenomenon.

[1] https://fred.stlouisfed.org/series/M2V

Post reply on HN