171–180 of 345 posts
Given that the economy grew 6.9% previous quarter, over the past two quarters, the US economy is growing at an annual rate of 5.5% - which is very high.
US economy grew at a 6.9% rate in the fourth quarter last year.
How much of that was due to inflation? Remember these numbers are nominal GDP. So if price levels doubled and nothing else changed, GDP would more or less double as consumption went up due to higher prices. The worrying thing is there are no monetary levers available without the risk of higher inflation. And if people don't think GDP matters, its actually a very good indicator of all sorts of well being measures such…
Earlier quoted context omitted.
In my neck of the woods, by far the largest and most impactful inflation has been in the housing sector - 50% price inflation over the past two years. This is entirely attributable to the Fed's pumping of soft assets like stocks, leading to a bunch of paper millionaires cashing out.
Real estate prices aren't included in inflation (BLS CPI) calculations because those are investment assets, like buying stocks or gold bullion. The CPI does account for housing costs through rent and owner's imputed rent.
This can be very roughly approximated by a 10-year moving average on the product of (housing prices x mortgage rates). CPI shelter inflation is currently ticking up each month like clockwork, at 5% and climbing, and it has a long way still to go to catch up with that trend.
Earlier quoted context omitted.
I'm currently sitting in a house that completed construction in December. I suspect your information might not be right.
"stopped building new homes" is clearly an exaggeration, but the spirit of the comment is spot on. Housing starts did collapse around '08, and only returned to the historical average in ~2021. Even so, we're still producing fewer units than we were producing in the 70's--when the population was ~60% of what it is now! How can there be any doubt that this production glut has played a huge role in the rise of housing p…
The population was growing around 1.1% a year in the 70s; it was 0.75% the last decade and is currently between 0.1% and 0.25% [1].
[1] https://united-states.reaproject.org/analysis/comparative-in...
It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…
> I’m super interested in what investing looks like in 50-100 years as the population starts collapsing I don’t think it’s possible to forecast economics on those scales. If I was cryonically preserved and woken up in 2122, I would be equally willing to believe we were declining or stagnant for the reasons you give… or that we had solved AI and von Neumann replicators and that the planet Mercury had been fully disman…
It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…
> I’m super interested in what investing looks like in 50-100 years as the population starts collapsing I don’t think it’s possible to forecast economics on those scales. If I was cryonically preserved and woken up in 2122, I would be equally willing to believe we were declining or stagnant for the reasons you give… or that we had solved AI and von Neumann replicators and that the planet Mercury had been fully disman…
At least I'd know I have a job waiting for me, supporting "legacy" code still running in production.
US economy grew at a 6.9% rate in the fourth quarter last year.
How much of that was due to inflation? Remember these numbers are nominal GDP. So if price levels doubled and nothing else changed, GDP would more or less double as consumption went up due to higher prices. The worrying thing is there are no monetary levers available without the risk of higher inflation. And if people don't think GDP matters, its actually a very good indicator of all sorts of well being measures such…
The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. The inflation we're seeing isn't a result of a hot economy needing to be kept in check, it's the fact that 40% of China's production is on lockdown and just about every product made, regardless of where it's made, is relying on part(s) coming from China. Supply is constrained and therefore prices are rising. Likewise, supp…
This is more true in Europe than the US. Most of the inflation there is due to (1) Increases in the price of energy and (2) Supply chain issues.
While those are also true in the US, much of the inflation in the US is due to wage increases (something like 40-50% of the inflation I believe). These are likely the result of a number of factors including the US having outsized stimulus relative to other developed countries (especially the fiscal stimulus).
So it is more reasonable for the Fed to consider tightening. And for the Europeans to be significantly slower on their tightening. Thus, what you are seeing in the currency markets where the EUR/USD is decreasing.
Earlier quoted context omitted.
> a bunch of paper millionaires cashing out [to buy property] so what did the seller of those property spend their profits on?
Unless they moved into a van down by the river, a bigger even more expensive home. Ya gotta live somewhere!
The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. The inflation we're seeing isn't a result of a hot economy needing to be kept in check, it's the fact that 40% of China's production is on lockdown and just about every product made, regardless of where it's made, is relying on part(s) coming from China. Supply is constrained and therefore prices are rising. Likewise, supp…
Agree that many don't appreciate this, however... This is more true in Europe than the US. Most of the inflation there is due to (1) Increases in the price of energy and (2) Supply chain issues. While those are also true in the US, much of the inflation in the US is due to wage increases (something like 40-50% of the inflation I believe). These are likely the result of a number of factors including the US having outs…