How does inflation in Estonia impact on inflation of the rest of eurozone? Say that EE has inflation 20%, but X has 2% and they use the same currency. Will eventually (within weeks of months) impact of EE increase inflation in X?
Estonia clocks fastest inflation in the Eurozone at 20.1 percent
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Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#152Earlier quoted context omitted.
That is exactly what inflation is computed from. Like literally.
Then how can it be only 9%? My gas price has increased by 200% in the last few months. In August, my electricity is going up 400%. Petrol alone has gone up by about 50% compared to few months back. Sure bread is still roughly the same as it was. But living costs have absolutely exploded recently, and far far beyond the 9% indicated.
>My gas price has increased by 200% in the last few months
That seems... unlikely.
https://www.globalpetrolprices.com/United-Kingdom/gasoline_p...
At best it doubled, but that's not the same as "increased by 200%", which implies it tripled.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#153Earlier quoted context omitted.
It's easy for small country like Lithuania, but completely impossible for country like Germany. There is not enough gas without Russian one to feed its industry.
It's completely possible for Germany, if you accept that it will completely impoverish your population and irreparably destroy the Mittelstand(which is most of Germany's industry), which stands at the crux of the German welfare system.
And make Germany completely dependent on US, of course.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#154Can anyone confirm mortgage rates in Estonia? This site[1] says ~ 2% mortgage rate, which means a -18% real rate, further pushing demand for real assets instead of paper debts. I think the US is closer to neutral, but we still have a negative mortgage real rate at the current inflation level. 1. https://www.theglobaleconomy.com/Estonia/mortgage_interest_r...
Can't confirm Estonia but certainly looks credible for Slovakia (1.35% - mine is 0.9%). But beware those are variable rates, so not fixed over the whole mortgage timespan but like 1/3/5/10 years, with 10 years being unusual and also the highest rate. So a lot of people who took out mortgages with 0.6% fixed for 1 or 3 years will have a hard time as the rates will climb significantly soon.
As someone who's not even thinking of buying a house, do fixed rate, fixed term mortgages even exist? It seems variable rate mortgages, while making financing more widely accessible, have caused their fair share of financial issues/instability.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#155Earlier quoted context omitted.
It affects the income gap. People in the startup sector earn _much_ more than other sectors - the difference is, if I'm not wrong, one of the biggest in the EU. So it creates a) a lot of inequality and b) drives up prices of certain goods (houses, apartments) because there's a noticeable % of the population in the startup sector who has now their sweet exit money that's looking for a new home.
"People in the startup sector earn _much_ more than other sectors - the difference is, if I'm not wrong, one of the biggest in the EU." Do you have a source for this claim? I would be very surprised if that was true.
I think parent lives in some start-up bubble full of rich exciters, as where I live (Austria), start-up exists don't move the needle at all.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#156Earlier quoted context omitted.
Here in Lithuania we were already independent from Russian gas and oil (lesson learned over the decades), and had liquid natural gas terminal for a few years. But inflation is also very high.
It's easy for small country like Lithuania, but completely impossible for country like Germany. There is not enough gas without Russian one to feed its industry.
It is possible within few years. Most of the gas is used for heating. Switch that to heat pumps. Then for electricity to run those pumps upgrade the existing coal power stations to the latest technology that gives 45% efficiency from the existing stations with 30-35%.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#157Earlier quoted context omitted.
Then how can it be only 9%? My gas price has increased by 200% in the last few months. In August, my electricity is going up 400%. Petrol alone has gone up by about 50% compared to few months back. Sure bread is still roughly the same as it was. But living costs have absolutely exploded recently, and far far beyond the 9% indicated.
>My gas price has increased by 200% in the last few months That seems... unlikely. https://www.globalpetrolprices.com/United-Kingdom/gasoline_p... At best it doubled , but that's not the same as "increased by 200%", which implies it tripled.
I was paying 3p/kWh of gas, now I'm paying 9p/kWh. Also I understand the confusion, but "gas" in UK means heating gas, gasoline is called petrol.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#158Earlier quoted context omitted.
You will still get the state pension. The part you are able to cash out is managed by other funds(banks etc) and it would act as an extra to state offered pension.
> You will still get the state pension What exactly would fund it then? Pensions system typically works by current generation providing for the previous. If we allow newer generations to "cash out", what would be the source of funding?
You fund a bit to the state pension and a bit to a private pension. Based on a previous comment Estonia allowed you to cash out the private pension. I assume. Romania has something similar where you pay for your state pension, mandatory level 1 private pension, and optionally a level 2/3 private pension. State + level 1 private pensions work as you'd expect, whereas level2/3 generally have cash-out terms. It's not either/or, if you want a level 3 private pension you need to contribute to both level 1&2.
edit: replace level with pillar, as I couldn't think of the word and saw it used by sibling comment after posting.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#159I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…
I'm trying to remember where I heard this from, but I found this idea pretty useful.
Mainly because I know what inflation is, but I didn't spend enough time thinking about what it means and what it tells me.
> Inflation is simply the delta between a past price and the current one, over a set of goods / services, which we represent using an average of some kind, usually ignoring certain kinds of price changes. For example some inflation measures ignore rent.
> It would be useful to have every measure of inflation cite the raw vector (which would be good to standardise) as well as listing what it excludes visibly.
> The underlying vector would show us much more, such as are all prices increasing / decreasing? Are some going in the opposite direction?
This would give us space to have a more nuanced discussion about causes and how much weight they may have.
Mistakes / errors in recollection are my own =)...
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#160I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…
> but for me there should be two types of inflations 1. a dilution of money Outside of the fact that "some people say" (generally anti-fed types) that inflation is an increase in the money supply, why is it you think that? In economics inflation has a specific definition: a general rise in the price level. It can be caused by all kinds of things. A rapid rise in the money supply is one. A breakdown in available suppl…
> It can be caused by all kinds of things.
In theory water can run uphill. Sometimes it even does. But as a matter of overwhelming practice it is obvious that if the general price of goods is rising it is the government doing something. Otherwise there is nearly nothing that could cause a correlated rise of the price of everything. Eg, in this case the most likely culprit is wilfully shutting down the global economy and handing out money to everyone which is even worse, economically speaking, than their usual handout tactics to very wealthy people.
Maybe something like sustained moves in the oil price or coal price could do it. But the western governments have an official policy of annual inflation and the only tool they have is money printing, because it isn't like they invest in oil wells.
PS Maybe demographics, more mouths & higher prices. Here are Estonia's demographics - https://en.wikipedia.org/wiki/Demographics_of_Estonia. Looking at it, a change in the labour force that major could be a big contributor.