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Inflation surges to its highest since 1990
31–40 of 58 posts
Re: Inflation surges to its highest since 1990
#32Earlier quoted context omitted.
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…
This is completely wrong, it disproportionally affects the poor and middle class the most because all they have is their wages and a little bit of cash. Wages are not that elastic and will certainly lag behind. Rich are heavy on assets and it doesn't affect them at all unless they are stupid enough to convert those assets to cash during high inflation period (it of course doesn't happen).
I agree. I'm not ashamed to admit though, I'm still a little baffled by Buffet's backing off into "cash" - or out of the market - I guess cash means different things to different people...
Re: Inflation surges to its highest since 1990
#33Earlier quoted context omitted.
"rich in cash"? No. Just those without other assets. Are you rich in cash if all $100 you have is in cash? Inflation is the most regressive tax possible on the poor.
Only if wage inflation doesn't keep up with price inflation. If wage inflation keeps pace, it's actually a fairly progressive result since debt loses value relative to wages. For people without income or assets it's a disaster.
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Re: Inflation surges to its highest since 1990
#34Earlier quoted context omitted.
Only if wage inflation doesn't keep up with price inflation. If wage inflation keeps pace, it's actually a fairly progressive result since debt loses value relative to wages. For people without income or assets it's a disaster.
Minimum wage is always going to lag way behind inflation. In practice, almost all wages lag behind inflation. But "people without income or assets" is my definition of "poor" and ...yeah, inflation basically takes a meager $1200/mo government check and makes it worthless. they're already on the brink of starvation.
I don't disagree with the overall point that it's likely that inflation will hurt a lot of economically vulnerable people.
I do think defining poor as unemployed is way too narrow. There are plenty of people who are employed and also poor.
Re: Inflation surges to its highest since 1990
#35Already discussed in the past 24 hours:
https://news.ycombinator.com/item?id=29175110
Re: Inflation surges to its highest since 1990
#36Earlier quoted context omitted.
Taxation is deliberate and easily measured. Inflation is much more difficult to measure and it results from many parts of a complex system interacting with each other. The only thing in common is that people end up with less money.
Poor people and the middle class who deal in cash day to day to pay bills, seem to end up with less money. The rich seem to be asset heavy so are buffeted against inflation.
This is a foreign concept, but Americans have caught on just fine: When the currency is inflating, people buy hard physical goods or whatever they can get their hands on now before the price goes up. Cars, white goods, remodels, houses, jewelry. It's funny to watch the whole universe of punditry wring its hands over the supply chain crisis when in fact what we're seeing is Americans attempting to cash out of the dollar (wittingly or by brute instinct), and China narrowing the umbilical by which those dollars can be redeemed for goods.
Re: Inflation surges to its highest since 1990
#37Earlier quoted context omitted.
The Consumer Price Index (CPI), for example, measures the prices of a basket of household goods and services that households regularly consume, with weights assigned to each item in the basket based on their average shares of total expenditures. Among these is a shelter component that includes both rental costs and the consumption value of owner-occupied housing, in addition to other forms of lodging such as hotels.…
Yes but through hedonic adjustment fuckery, many CPI measurements, especially housing, are complete nonsense. Basically, if the cost of housing is rising, but the quality of housing is also rising, then these things will offset to a degree as far as CPI is concerned. It’s one of the reasons healthcare inflation is so absurdly underrepresented. CPI basically assumes that you could pick any level of quality for a good…
Of course CPI is imperfect and worthy of plenty of criticism. But one must acknowledge: it’s an incredibly complicated thing to try and measure. This cynical conspiracy theory that big bad government is twisting its evil mustache and trying to make inflation look low is… well, I don’t think it holds up to much scrutiny.
Re: Inflation surges to its highest since 1990
#38Earlier quoted context omitted.
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 o…
I think you are confusing two things. The poor may struggle to reach ends-meet more than the rich, of course. But that doesn't mean that relatively speaking inflation is a regressive tax that the poor have to carry the burden of disproportionately.
> No, wealthy people tend to invest theirs saving in various things that resist or often even beat inflation.
This is easier said than done. Given a risk-free rate it's not that hard to find investments that beat it. What usually happens is that the risk-free rate is around inflation. But right now the risk-free rate is significantly lower than inflation. If the Fed raises the risk-free rate to match inflation then high valuations will correct resulting in a strong correction in the stock market.
SP500 historical chart: https://www.macrotrends.net/assets/images/large/sp-500-histo...
Look at the 70s, same period of high-inflation I was referring to above. The wealthy didn't beat inflation back then, which again is reflected in the previous wealth inequality chart.
Re: Inflation surges to its highest since 1990
#39Earlier quoted context omitted.
Taxation is deliberate and easily measured. Inflation is much more difficult to measure and it results from many parts of a complex system interacting with each other. The only thing in common is that people end up with less money.
Poor people and the middle class who deal in cash day to day to pay bills, seem to end up with less money. The rich seem to be asset heavy so are buffeted against inflation.
Keep in mind that nominal inflation-driven gains are taxed, so even perfectly inflation hedged investors (not many are) end up behind in real terms.
Re: Inflation surges to its highest since 1990
#40Inflation 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…
Keep in mind that at the same time there’s a high tax on cash central banks have arranged things such that there are no safe investments. They’ve pushed people into memecoins, electric car companies that haven’t made any cars, and flipping homes in the exurbs of Las Vegas.