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Financial anxiety: The alarming side effect of inflation

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Re: Financial anxiety: The alarming side effect of inflation

#21

Post by amjnsx »

datadrivenangel wrote: post #12

I visited Argentina earlier this year, and the psychological effects of years of inflation were very real. The exchange rate has gone from 5 pesos per USD, to 350 officially in the last 10 years. The unofficial rate is up to almost 900 pesos per USD. In March the unofficial rate was half of that, so the currency has lost 50% of its value in the last 6 months. Everybody prefers to be paid in dollars, and if you're get…

It’s a tale as old as time unfortunately. Currencies have been debased for centuries.

It won’t change until we have actual hard money that can’t be debased by leaders/bankers/politicians.

Re: Financial anxiety: The alarming side effect of inflation

#22

Post by artificialLimbs »

lesuorac wrote: post #8
gjsman-1000 wrote: post #6

Earlier quoted context omitted.

Don't shoot the messenger. If anything, inflation and shrinkflation's effects on the average American are, in my opinion, understated; and Thomas Jefferson (if you've ever read his comments about inflation) would've been calling for hangings. Also, worth remembering, the median American income is $40,480 /yr., while median household is $74,580 /yr. Half of Americans make less than that per year. 20th percentile incom…

Perhaps more importantly and that during inflation/shrinkflation the median income has _decreased_ so not only do you get less for your money you also have less money! I will say though on inflation we should shoot the messenger. Inflation is a disease; it describes a symptom (increased prices). The word inflation does not describe at all why prices increased. Did oil get more expensive so the cost of revenue increas…

>> Did oil get more expensive so the cost of revenue increased? Did a company realize they were charging below market rate?

This should statistically account for at least ~25% of it, according to the numbers:

https://ycharts.com/indicators/us_m2_money_supply

Re: Financial anxiety: The alarming side effect of inflation

#23

Post by artificialLimbs »

StuntPope wrote: post #14

They talk about inflation like it comes from a comet out of deep space. Not one mention that inflation is caused by the government and central banks expanding the money supply.

Just wait. You will be downvoted for this comment for reasons I am unable to explain.

Re: Financial anxiety: The alarming side effect of inflation

#24

Post by amjnsx »

wing-_-nuts wrote: post #16

I used to have a lot of financial anxiety when I was younger. These days I thought I was pretty well set but the increase in prices for everything has been kind of a wake up call, especially housing! Kind of shocking when SFH's in my southern suburb went from costing ~ 400k in 2017 to ~ 800k now. What blows me away is that it appears to have no bearing to what people can actually afford? I make multiples of the local…

Imo because the rich get richer, they inevitably need to store that wealth somewhere. Cash would be stupid because inflation, so they can buy property over market rates as a “safe haven”

Re: Financial anxiety: The alarming side effect of inflation

#25

Post by toomanyrichers »

wing-_-nuts wrote: post #16

I used to have a lot of financial anxiety when I was younger. These days I thought I was pretty well set but the increase in prices for everything has been kind of a wake up call, especially housing! Kind of shocking when SFH's in my southern suburb went from costing ~ 400k in 2017 to ~ 800k now. What blows me away is that it appears to have no bearing to what people can actually afford? I make multiples of the local…

> What blows me away is that it appears to have no bearing to what people can actually afford?

If the houses aren’t sitting on the market, people can afford them. I think what actually happened is people realized that housing was underpriced. Which is insane in terms of the raw numbers, but it’s the truth: lack of supply along with increasing numbers of buyers means that the market really is that hot.

Sucks to be late to this party.

Re: Financial anxiety: The alarming side effect of inflation

#26

Post by PheonixPharts »

michaelteter wrote: post #4

Financial anxiety: Media - the primary instigator It's one thing to feel financially tight. It's another thing to have endless news articles and publications and posts warning of how bad the global economy is and how inflation is running out of control. Not only does this constant negative message directly cause stress on the viewers, but it can cause fear in business which can lead to "precautionary" retractions...…

I think it's great to check media sensationalism, but I think there's a massive disconnect between the impacts of inflation on highly paid software engineers, and most Americans.

It's also a bit strange to see you view media as a completely separate entity from "decision-makers in companies". My experience has been that most decision makers in companies get most of their ideas entirely from the board and major investors. I recently left a publicly traded company, and pretty much every time our "leaders" met with the border and major investors they would come back singing a very different tune then they went in.

But these same major investors and board members also have relationships with people running major media companies (which are also just companies), in many cases they may even be the same people.

There's this trend I've seen on HN to just dismiss anything that seems wrong with the world, no matter the evidence, with "media sensationalism", as though we are living in fantastic times if it were for that pesky media distorting our views.

Re: Financial anxiety: The alarming side effect of inflation

#27

Post by andrewmutz »

gjsman-1000 wrote: post #6
michaelteter wrote: post #4

Financial anxiety: Media - the primary instigator It's one thing to feel financially tight. It's another thing to have endless news articles and publications and posts warning of how bad the global economy is and how inflation is running out of control. Not only does this constant negative message directly cause stress on the viewers, but it can cause fear in business which can lead to "precautionary" retractions...…

Don't shoot the messenger. If anything, inflation and shrinkflation's effects on the average American are, in my opinion, understated; and Thomas Jefferson (if you've ever read his comments about inflation) would've been calling for hangings. Also, worth remembering, the median American income is $40,480 /yr., while median household is $74,580 /yr. Half of Americans make less than that per year. 20th percentile incom…

In inflation-adjusted terms, the lowest income americans have done the best over the last few years, with their wages rising 9%:

https://www.epi.org/publication/swa-wages-2022/

> Between 2019 and 2022, hourly wage growth was strongest at the bottom of the wage distribution. The 10th-percentile real hourly wage grew 9.0% over the three-year period. When we look across the wage distribution, we see wage growth declining for each successive wage group until we reach the high-wage group. Compared with the 9.0% wage growth at the bottom, growth was less than half as fast for lower-middle-wage workers (3.9%) and less than one-third as fast for middle-wage workers (2.4%) between 2019 and 2022. Upper-middle wages grew even more slowly at 1.8% over the three-year period, while the 90th-percentile wage grew 4.9%—faster than the middle wages, but not as fast as the 10th-percentile wage.

And this is from EPI, a left-leaning think tank.

Re: Financial anxiety: The alarming side effect of inflation

#28

Post by lawlessone »

michaelteter wrote: post #4

Financial anxiety: Media - the primary instigator It's one thing to feel financially tight. It's another thing to have endless news articles and publications and posts warning of how bad the global economy is and how inflation is running out of control. Not only does this constant negative message directly cause stress on the viewers, but it can cause fear in business which can lead to "precautionary" retractions...…

did media make my milk sour?

Re: Financial anxiety: The alarming side effect of inflation

#29

Post by sokoloff »

lesuorac wrote: post #8
gjsman-1000 wrote: post #6

Earlier quoted context omitted.

Don't shoot the messenger. If anything, inflation and shrinkflation's effects on the average American are, in my opinion, understated; and Thomas Jefferson (if you've ever read his comments about inflation) would've been calling for hangings. Also, worth remembering, the median American income is $40,480 /yr., while median household is $74,580 /yr. Half of Americans make less than that per year. 20th percentile incom…

Perhaps more importantly and that during inflation/shrinkflation the median income has _decreased_ so not only do you get less for your money you also have less money! I will say though on inflation we should shoot the messenger. Inflation is a disease; it describes a symptom (increased prices). The word inflation does not describe at all why prices increased. Did oil get more expensive so the cost of revenue increas…

> not only do you get less for your money you also have less money

The figures you cited are real median income, meaning the effect of inflation has been backed out.

The C-CPI-U was around 8% in 2022. If the Census report says that real incomes (what your paycheck can buy) decreased 2.3%, that means that nominal incomes (the numbers on your paycheck) increased by a little over 5%. The unlabeled table on page 14 shows that they used 7.8% as the deflator for 2022.

Do not repeat the nonsense that "not only has your [real] income decreased, but inflation has made things more expensive". That may or may not be the case, but if you're going to cite both, you should be citing nominal income, not real income. (In particular in 2022, this was not the case and this error leads the reader to an incorrect conclusion.)

I think a portion of people who say things like this don't know what they're talking about. Another portion knows exactly what they're talking about but realizes that other people won't and is able to spin misleading messages out of that gap in understanding. (Make no mistake, there are actual problems facing the median income American, but there is also a lot of mis-speak about them, some of which is intentional.)

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