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Inflation surges to its highest since 1990

npr.org

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Re: Inflation surges to its highest since 1990

#11

Post by d_t_w »

edmcnulty101 wrote: post #7
vbg wrote: post #4

Inflation is complete bullshit because it’s careful to measure a subset of prices and exclude a large range of other prices. Meaningless crap, designed to support government narrative that everything is great, nothing to see here. To have any credibility at all, inflation MUST include rent/mortgage payments and house prices.

Doesn't the CPI include housing? (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services) Question 10. https://www.bls.gov/cpi/questions-and-answers.htm

I'm not quite sure what 'housing' means in that quote because CPI specifically excludes most housing costs.

RPI takes into account housing costs such as mortgage interest payments, building insurance etc. I'm not sure what USA measure, but the UK shifted to CPI in 2003 to harmonise with EU.

So no, UK/EU/CPI inflation measures basically don't include housing related costs. Certainly not the price of houses, which might be the thrust of OPs point.

Re: Inflation surges to its highest since 1990

#13

Post by metafunctor »

neximo64 wrote: post #9
ur-whale wrote: post #5

Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.

And also in a way the opposite. If there was a scale of value in terms of being between the borrower (people in debt) and people lending (people with cash). It swings heavily in favour of people in debt.

Are you assuming interest rates and inflation are somehow uncoupled?

Re: Inflation surges to its highest since 1990

#14

Post by blatchcorn »

neximo64 wrote: post #9
ur-whale wrote: post #5

Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.

And also in a way the opposite. If there was a scale of value in terms of being between the borrower (people in debt) and people lending (people with cash). It swings heavily in favour of people in debt.

I see your point in theory but in practice:

- poor people have less money to repay interest on the debt after buying necessities at an inflated price

- interest rates rise following inflation which will increase debt repayment costs and likely offset any benefits gained from debt being inflated away

- it is very rare for 'people' to actually issue loans, I imagine 99.99% of loans are issued by banks

Re: Inflation surges to its highest since 1990

#15

Post by fauigerzigerk »

foota wrote: post #12

Were bad things happening in 1990? Iirc it was the start of one of the most prosperous periods in recent American history.

The 1990 oil price shock occurred in response to the Iraqi invasion of Kuwait on August 2, 1990

https://en.wikipedia.org/wiki/1990_oil_price_shock

Re: Inflation surges to its highest since 1990

#16

Post by pa7x1 »

ur-whale wrote: post #5

Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.

Inflation does not affect (relatively speaking) the poorest more. On the contrary, it's a tax on people that have a lot of cash or cash-equivalent assets. That's not the poor. The poor have either very little cash or even negative (via debt), so inflation benefits them.

And you can see this historically, too:

Historical inflation rate chart: http://www.aboutinflation.com/_/rsrc/1369736825466/inflation...

Wealth gap inequality: https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2F...

You can literally see how the wealth gap inequality nose dives in the high-inflation environment of the 70s and then continually increases after low-inflation rates become the norm for decades after around 1982.

Inflation is a tax, should be seen as such but is a tax on the rich in cash (I keep insisting on the term cash because that's what inflation taxes, if you are rich in other assets inflation may or may not result in an effective taxation of your wealth). Monetary and fiscal policy should be designed with this in mind.

Re: Inflation surges to its highest since 1990

#18

Post by jtsiskin »

metafunctor wrote: post #13
neximo64 wrote: post #9

Earlier quoted context omitted.

And also in a way the opposite. If there was a scale of value in terms of being between the borrower (people in debt) and people lending (people with cash). It swings heavily in favour of people in debt.

Are you assuming interest rates and inflation are somehow uncoupled?

They’re referring to people with existing, fixed interest rate debt. My student loans for example are 5%

Re: Inflation surges to its highest since 1990

#19

Post by pfortuny »

jstx1 wrote: post #3

It's helpful to have a look at the graph in the article and to remind yourself that the numbers are reported year-on-year. Inflation spiked up in the first half of 2021 and the comparison is between the current month and the same month last year so prices could stay the same and you would still report high inflation for a while (until the back end of the comparison window catches up to the moment in time when inflati…

Totally right in your assessment.

But notice that, following your indication, monthly increase is a steady >0.2% and mostly >0.4% since May 2020, way above average.

So, yes: high inflation has been going on for at least a year.

Re: Inflation surges to its highest since 1990

#20

Post by goodpoint »

pa7x1 wrote: post #16
ur-whale wrote: post #5

Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.

Inflation does not affect (relatively speaking) the poorest more. On the contrary, it's a tax on people that have a lot of cash or cash-equivalent assets. That's not the poor. The poor have either very little cash or even negative (via debt), so inflation benefits them. And you can see this historically, too: Historical inflation rate chart: http://www.aboutinflation.com/_/rsrc/1369736825466/inflation... Wealth gap i…

> Inflation does not affect (relatively speaking) the poorest more.

Not at all: people with low incomes struggle the most to get raises.

And those who barely get to the end of the month struggle the most when their purchase power decreases by 5%.

> On the contrary, it's a tax on people that have a lot of cash or cash-equivalent assets.

No, wealthy people tend to invest theirs saving in various things that resist or often even beat inflation.

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