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Inflation is at a 40 year high. What can history teach us?

yarn.pranshum.com

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Re: Inflation is at a 40 year high. What can history teach us?

#231

Post by anon291 »

petilon wrote: post #188
groby_b wrote: post #74

Earlier quoted context omitted.

Given that California can't print money, why do you think those checks are "printing money"? And no, it's not a "sneaky backdoor". It's the government doing what it should do, tighten financial inequality gaps. And preventing unnecessary suffering. We're still a society, we occasionally take care of the weaker people amongst us. (Frankly, not often enough) And "without real oversight" is... you're aware this is going…

They may not be printing money, but they are propping up inflation by giving people free money for compensating for inflation.

Right. One way to combat inflation is to save money. The fed encourages this by increasing the interest rate. If california truly wanted to reduce inflation, it would simply retain those $1000 checks. Taking money out of supply reduces inflation.

Re: Inflation is at a 40 year high. What can history teach us?

#232

Post by auspex »

Syonyk wrote: post #222
Spooky23 wrote: post #192

Earlier quoted context omitted.

You do you. But assets like real property are historically good investments. It doesn’t make sense to not buy the best house you can afford. I’m with you with cars… but even then the maintenance expense starts to catch up.

> It doesn’t make sense to not buy the best house you can afford. I heard that a lot in the 2006-2007 era. And plenty of people lost that "best home they could afford" back then. Fortunately, I couldn't afford a four-figure car, much less a house - though some other grad students seemed able to convince someone to offer them loans. No idea how all those worked out, I do hope some of them were able to keep the houses.…

Buying a bigger house just allows you to park more of your net worth in real estate. As a diversification it makes sense. But also as you make more money the payment becomes less and less of your monthly income.

It’s not absurd. It’s just a different reason for buying a house.

Re: Inflation is at a 40 year high. What can history teach us?

#233

Post by anon291 »

Syonyk wrote: post #21

> But if the main driver of inflation is the demand side, or inflation expectations, history indicates that a painful recession could be the only way to curb inflation. That's certainly the expected path forward, at least in the circles I associate with. "When the tide goes out, you find out who's swimming naked" seems a reasonable guess as to what's going to happen. Both at larger bank/investment firm scale and at t…

> if it's anything but a warm winter,

I guess they should hope that their green technologies didn't work enough to curb global warming or something. What a messed up situation.

Re: Inflation is at a 40 year high. What can history teach us?

#234

Post by junofan »

mrep wrote: post #158
Syonyk wrote: post #142

Earlier quoted context omitted.

I'm in the US. I certainly could do something like that. I just won't. I hope it works for you. That's a level of debt-based risk that neither myself nor my wife have any interest in. There have been a lot of people throughout history who thought similar arrangements were "sure things," and they were, up until they weren't and it all came down around their ankles. We live in a very modest ( manufactured, gasp! ) home…

2/3 of my debt payments are a sure thing as they are fixed and inflation is also a sure thing as deflation is catastrophic so governments won't allow it and deflation is trivially easy to fix with helicopter money. The only thing that isn't a sure thing are wages but they have over the long term gone up [0] and when they do go down it is usually only for a few years. The last one is a risk but I think it is well wort…

I mean the bank took on the risk instead of you, and the bank owns your house. So… sure thing?

Re: Inflation is at a 40 year high. What can history teach us?

#235

Post by mixmastamyk »

UncleMeat wrote: post #41
rnernento wrote: post #36

Earlier quoted context omitted.

I don't think you realize just how much of the money has been printed in the last 2 years. See fed balance sheet over time: https://www.federalreserve.gov/monetarypolicy/bst_recenttren... See M2 over time: https://fred.stlouisfed.org/series/M2SL

So? The argument is that inflation always happens when there is fiat printing. We printed a shitload of dollars between 2000-2020, yet inflation was low throughout that period. So the explanation is clearly insufficient.

The price of my lunch went from ~$8 to ~$18 during this period, it is noticeable. Had a look at the stock or real-estate markets?

Re: Inflation is at a 40 year high. What can history teach us?

#236

Post by hackerfromthefu »

senectus1 wrote: post #159
mrep wrote: post #129

Earlier quoted context omitted.

Where are you at? I ask because I have 2 mortgages and a car loan in the US and 2 are fixed rate for the entire lifetime of the loan and 1 I have 10 years until the ARM starts applying so I'm laughing all the way to the bank. 90% of US mortgages are fixed for the entire loan.

In Australia I don't think I've ever seen an ability to fix 100% of a mortgage. We tend to fix about 75% and variable the remaining.

That is wrong, you can fix 100%. However in Australia the fixed terms are shorter, typically 1-5 years.

Re: Inflation is at a 40 year high. What can history teach us?

#237

Post by bigyikes »

petilon wrote: post #188
groby_b wrote: post #74

Earlier quoted context omitted.

Given that California can't print money, why do you think those checks are "printing money"? And no, it's not a "sneaky backdoor". It's the government doing what it should do, tighten financial inequality gaps. And preventing unnecessary suffering. We're still a society, we occasionally take care of the weaker people amongst us. (Frankly, not often enough) And "without real oversight" is... you're aware this is going…

They may not be printing money, but they are propping up inflation by giving people free money for compensating for inflation.

Yes, people are ignoring the second-order effects. Just because California can’t directly print money doesn’t mean they aren’t contributing to the macroeconomic factors leading to the Fed feeling the need to print more money.

Re: Inflation is at a 40 year high. What can history teach us?

#238

Post by unity1001 »

beerdoggie wrote: post #54

In California, people fitting certain economic criteria are now being issued $1000 checks for inflation relief. This is beyond ludicrous. We have printed so much money, the only solution is to... print more? It's almost like it is all a sneaky backdoor to letting the government redistribute wealth without real oversight...

> In California, people fitting certain economic criteria are now being issued $1000 checks for inflation relief. This is beyond ludicrous.

Its not. Its happening in Europe too. Its a way to try to get people through the winter and avoid the energy crisis impacting ordinary people.

That's what a government should do - take care of its people during extraordinary times.

Re: Inflation is at a 40 year high. What can history teach us?

#239

Post by anon291 »

Spooky23 wrote: post #192
Syonyk wrote: post #142

Earlier quoted context omitted.

I'm in the US. I certainly could do something like that. I just won't. I hope it works for you. That's a level of debt-based risk that neither myself nor my wife have any interest in. There have been a lot of people throughout history who thought similar arrangements were "sure things," and they were, up until they weren't and it all came down around their ankles. We live in a very modest ( manufactured, gasp! ) home…

You do you. But assets like real property are historically good investments. It doesn’t make sense to not buy the best house you can afford. I’m with you with cars… but even then the maintenance expense starts to catch up.

Real property is an investment ... if you own it. If you don't own the land, property is a liability. That is because you have no idea what the land's value may be on the market at the time you may be forced to liquidate to make payments. More often than not, the value of the land will decrease if you're forced to liquidate. This is a huge risk that goes completely unappreciated by many.

If you own property that you do not use that you rent out for a consistent income stream, then it can be an asset even if you have debt on it. This is because you can easily sell this property in anticipation of hard times (whereas you cannot with a home). And moreover, it should be cashflowing even with the debt service, and anything that produces a real income is an asset. Although, still a risk.

I'm totally in favor of property, but frankly many property 'investors' are not investing. They're either consuming (your current home is a consumable and if an investment, an incredibly speculative one), or flat out speculating (owning property in the hopes appreciation will keep up is actually a bet on monetary policy and the interest rate, not on the actual value of the land / property). Property is only an investment if it makes you money in cash each month.

Also, cars are not a risk-free loan unless you live in an area in which you can accomplish most tasks via walking / public transit / cheap private transit. Most Americans do not. Thus the car is a necessity and the loan ought to be seen as a tax on living in a spread out area. Of course, no one actually thinks about it this way.

Re: Inflation is at a 40 year high. What can history teach us?

#240

Post by lazide »

WalterBright wrote: post #35
lazide wrote: post #4

Earlier quoted context omitted.

I personally didn’t get that from the highlight reels of the mid 70’s and early 80’s. Mostly it was the total chaos, riots, and unrest. They were also immediately followed by Reagan, who wasn’t exactly a shining beacon of progressivism. But there were a lot of changes during that time, many that could be considered progressive, mixed in with (or perhaps the reason behind?) the chaos. A lot of folks don’t like change,…

> Mostly it was the total chaos, riots, and unrest. Total nonsense. Source: I lived through the 70s.

So the Symbionese Liberation Army totally didn't happen [https://en.wikipedia.org/wiki/Symbionese_Liberation_Army]? Certainly, no widespread protests with shooting of innocent protestors? [https://en.wikipedia.org/wiki/Kent_State_shootings] Or the Gov't going completely off the rails against it's population? [https://en.wikipedia.org/wiki/MKUltra, https://en.wikipedia.org/wiki/COINTELPRO]

Or an impressive series of riots? [https://en.wikipedia.org/wiki/List_of_riots#1970s]

Not to mention that whole Nixon thing?[https://en.wikipedia.org/wiki/Watergate_scandal]

It was a busy time.

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