Inflation is at a 40 year high. What can history teach us? • Hacker News Board

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

#421

Post by babarock » Wed, Oct 05, 2022, 10:12 AM UTC

stingraycharles wrote: post #391

vladimirralev wrote: post #360

Earlier quoted context omitted.

If you take it just one step further, the people "that need it most" really only need it in order to instantly donate it to the megacorps with pricing power at ever-increasing prices. The handouts help only in that instant and at the very next clock cycle that money is now in the hands of the megacorps. Printing money and handouts only help the top of the top in the pricing power hierarchy. If you want to actually he…

From that perspective, anything always ends up in the top of the top of megacorps, and I find it not a very compelling argument to not help people just because they’re at the mercy of megacorps. You want to tax these megacorps additionally yes, especially if they’re profiting from the current situation. But at the same time, it’s also important to redestribute that wealth towards those who have the biggest problems r…

Megacorps will get away with keeping their prices this high, as long as the gov keeps funding these "relief" payments.

It's using taxpayer money to artificially maintain prices high.

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

#422

Post by weberer » Wed, Oct 05, 2022, 10:28 AM UTC

diordiderot wrote: post #415

gitfan86 wrote: post #411

Earlier quoted context omitted.

At this point the fed seems to be saying that those days are over, they will continue to increase rates until inflation hits 2%. Obviously this cannot go on forever because it becomes impossible to service the debt and you have to print money to pay it off. But it gives you more time and prevents hyper-inflation and we can hope that by then AI and other technological advances have made what we consider "economics" mo…

> because it becomes impossible to service the debt Those companies should have made more responsible financial decisions.

*governments

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

#423

Post by stingraycharles » Wed, Oct 05, 2022, 10:34 AM UTC

babarock wrote: post #421

stingraycharles wrote: post #391

Earlier quoted context omitted.

From that perspective, anything always ends up in the top of the top of megacorps, and I find it not a very compelling argument to not help people just because they’re at the mercy of megacorps. You want to tax these megacorps additionally yes, especially if they’re profiting from the current situation. But at the same time, it’s also important to redestribute that wealth towards those who have the biggest problems r…

Megacorps will get away with keeping their prices this high, as long as the gov keeps funding these "relief" payments. It's using taxpayer money to artificially maintain prices high.

But we used taxpayer money to first inject trillions into the top of the economy. And then when the inevitable happens, we can’t just throw our arms in the air “because inflation!” — that’s a great way to make sure that the bottom of the economy will suffer tremendously due to all this.

Because their income hasn’t increased nearly as much as the amount of inflation that occurred.

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

#424

Post by dsign » Wed, Oct 05, 2022, 10:43 AM UTC

saurik wrote: post #395

consp wrote: post #354

Earlier quoted context omitted.

Doesn't that practically mean the rich get richer and the poor stay poor? If it would be net 0 everything would stay the same?

Is that surprising? Alternatively, do you have a fix in mind? Having power means you can build more things that give you more power faster than someone with less power. You can't change this using inflation, as people will just hold something else instead of cash (and, in fact, inflation seems to most punish the people with the least power, as those people are spending a much much greater proportion of their income o…

That blows my mind. I'm allowed to spend $10 in a bottle of alcohol or a packet or cigarettes, no questions asked, but I'm not allowed to spend those $10 in stocks of a tiny company unless I'm able to demonstrate that I sleep with the founders or make their lunch or run their accounting, or that I have so many millions on my name that investing $10 without doing any of the above really could not harm me.

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

#425

Post by watersb » Wed, Oct 05, 2022, 10:45 AM UTC

diordiderot wrote: post #415

gitfan86 wrote: post #411

Earlier quoted context omitted.

At this point the fed seems to be saying that those days are over, they will continue to increase rates until inflation hits 2%. Obviously this cannot go on forever because it becomes impossible to service the debt and you have to print money to pay it off. But it gives you more time and prevents hyper-inflation and we can hope that by then AI and other technological advances have made what we consider "economics" mo…

> because it becomes impossible to service the debt Those companies should have made more responsible financial decisions.

When the money was free (near zero interest rates), borrowing money to invest in capital was imminently responsible.

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

#426

Post by gumby » Wed, Oct 05, 2022, 10:48 AM UTC

whoooooo123 wrote: post #410

gumby wrote: post #23

Earlier quoted context omitted.

Not really. We don't have the assassinations. The national guard doesn't shoot people; that's been democratized to police and private citizens. The big violent demonstrations are gone. What passes for it these days is a pale shadow. One "benefit" of the increased inequality is that people making less than the median are too exhausted to demonstrate, much less rebel. Rebellion has always been the act of those who belo…

> The big violent demonstrations are gone. Um... didn't the biggest riots in American history just happen two years ago?

Not even close.

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

#427

Post by [deleted] » Wed, Oct 05, 2022, 10:51 AM UTC

watersb wrote: post #425

diordiderot wrote: post #415

Earlier quoted context omitted.

> because it becomes impossible to service the debt Those companies should have made more responsible financial decisions.

When the money was free (near zero interest rates), borrowing money to invest in capital was imminently responsible.

[deleted]

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

#428

Post by valenterry » Wed, Oct 05, 2022, 10:51 AM UTC

consp wrote: post #354

zie wrote: post #156

Earlier quoted context omitted.

I haven't dug into everything you are doing, but the biggest flaw I see seems to be that you assume Cash returns 0% nominal, i.e. that there is no return for holding cash. That is only true if you hide it under your mattress(and no deflation happens). Most people do not hide money under their mattress anymore, especially if they have large amounts of it. They put it in a bank account or in a MMF or some other interes…

Doesn't that practically mean the rich get richer and the poor stay poor? If it would be net 0 everything would stay the same?

Yes, if it were not for the inherent risk that comes with it. If you put the cash in your mattress you only face the risk of losing it due to it being stolen or when it burns. You can get insurance against that it this would need to be deducted as well. So effectively you are losing money.

Now for money on your bank that pays interest it's not necessarily better. The bank can be robbed or simply go bankcrupt. And since the money there was used by the bank for various things, there's no guarantee you'll get it back. This inherent risk needs to be priced into the ROI.

So IF the government always saves banks with buyout, then yes. That's also why I believe it's not a great idea and people of such a bank should lose at least a part of their assets/savings to understand the fact that the money isn's just stored by the bank.

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

#429

Post by m0llusk » Wed, Oct 05, 2022, 10:51 AM UTC

mrjin wrote: post #406

The only thing we learnt from history was that *we learn nothing from the history*. For the past decades, what were the central banks all over the world doing? Nothing but printing money. Whenever there was a (economical) crisis, the only measure was printing money, *nothing but printing money*. Were the problems resolved ever? Never!!. They event pretended to be innocent by asking "why there were no inflation". Of c…

This is clearly an oversimplification because the crisis of 2008 was met with extreme money printing which did not cause a burst of inflation and was reeled in with relative ease as the economy restored itself. If money printing were the variable then it should cause inflation every time but it does not.

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

#430

Post by pas » Wed, Oct 05, 2022, 10:52 AM UTC

mrjin wrote: post #406

The only thing we learnt from history was that *we learn nothing from the history*. For the past decades, what were the central banks all over the world doing? Nothing but printing money. Whenever there was a (economical) crisis, the only measure was printing money, *nothing but printing money*. Were the problems resolved ever? Never!!. They event pretended to be innocent by asking "why there were no inflation". Of c…

CPI has asset components, like housing.

Central banks have one universal lever, and they use it. (This is by design, so it can be mostly independent.) The responsibility is on the fiscal side to spend it on shit that actually matters.

Sending people money without means testing is dumb, but politics in this age is dumb.

Unfortunately harping half-truths about central banking won't help with the situation :/

Your comment completely ignores the supply side of inflation, ie. food & energy prices. Ie. there's a war between the food and fossil faucets of Europe.

See also the whole baby formula debacle (sustained government intervention reduced the market to a very fragile one, and lobbying and protectionism prevents imports to the US), see the perverse incentives in low-paying logistics sectors (the big ports are all owned by local governments, and they are shit at responding to supply-and-demand, and trucking is of course completely fucked because the liability is shifted to the drivers while the profit is nicely shifted off of their hands, due to a relative large pool of potential new drivers to fleece).