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Financial anxiety: The alarming side effect of inflation

bbc.com

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Re: Financial anxiety: The alarming side effect of inflation

#41

Post by anon1199022 »

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…

Lovely country of Argentina had 9 defaults in it's history. Maybe people and their parents, which certain % of them are part of government or economy. Should start taking little more responsilibity to understand how Finance works long term? Naa, let's default again, blame other things and not even understand how debt and modern monetary system works. https://www.bloomberg.com/news/photo-essays/2019-09-11/one-c...

Re: Financial anxiety: The alarming side effect of inflation

#42

Post by helen___keller »

Change is scary. Change for the worse is terrifying.

From my observation, most people rightfully assume their incomes aren’t going to rise very fast, if at all. We’re in a world where some people would call a 3% annual raise “generous”.

The correct and only way to get by inflation without getting pinched is to make sure your income raises to match cost of living increase. But a lot of people don’t live in the rat race so this might not be obvious and certainly doesn’t feel desirable.

As someone living in the urban rat race, inflation doesn’t feel like a big deal. In the 2010s amidst “low inflation” I saw rents rise in my city astronomically. In the same time period I worked / negotiated to increase my own pay astronomically. Prices go up, income goes up, life goes on.

Re: Financial anxiety: The alarming side effect of inflation

#43

Post by lesuorac »

artificialLimbs wrote: post #22
lesuorac wrote: post #8

Earlier quoted context omitted.

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

What's the money demand?

If money supply increases and money demand increases then the price of money doesn't change.

Re: Financial anxiety: The alarming side effect of inflation

#44

Post by [deleted] »

PheonixPharts wrote: post #26
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 invest…

[deleted]

Re: Financial anxiety: The alarming side effect of inflation

#45

Post by [deleted] »

amjnsx wrote: post #21
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.

[deleted]

Re: Financial anxiety: The alarming side effect of inflation

#46

Post by lesuorac »

sokoloff wrote: post #29
lesuorac wrote: post #8

Earlier quoted context omitted.

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 show…

> Do not repeat the nonsense that "not only has your [real] income decreased, but inflation has made things more expensive".

Non-Sequiter. That isn't a quote of something I wrote.

The thing I actually wrote is "so not only do you get less for your money you also have less money!". Which is accurate. Shrinkflation means when you go out to buy detergent you only get 15.5 oz instead of 16oz so you're getting less for your money. Real income decreasing by 2.3% means you have less money. "so not only do you get less for your money you also have less money!"

People really aren't going to care that their income is up 5% if the rent is up 8% ... The real value is noticed.

Re: Financial anxiety: The alarming side effect of inflation

#47

Post by darkclouds »

makomk wrote: post #37
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…

The BBC is a British institution though, and the British media has treated the effects of inflation here very differently to how the American media did, with endless front-page coverage of every last detail and prediction and problem whereas the American media downplayed the issue and how badly people were doing in day-to-day terms and instead told readers that inflation was some partisan Republican narrative.

[dead]

Re: Financial anxiety: The alarming side effect of inflation

#48

Post by eatsyourtacos »

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.

>Not one mention that inflation is caused by the government and central banks expanding the money supply.

The recent inflation is more because of unfettered capitalism. Supply chain issues? Ok let's just keep on raising prices as much as we can. Things back under control? Ok, well we are still going to claim we have issues and just keep on raising prices.

Workers want more money? Ok instead of us shareholders taking the hit, we are going to pass on every bit of that (and more) to the consumer because "we can".

Want to go to a football game? A concert? Disney world? Cool- we are just going to keep increasing prices like crazy because there is a large enough people in the top 10% that will pay because that increase doesn't really matter.

Prices are being driven the fuck up because of greed and income divide.

Re: Financial anxiety: The alarming side effect of inflation

#49

Post by sokoloff »

lesuorac wrote: post #46
sokoloff wrote: post #29

Earlier quoted context omitted.

> 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 show…

> Do not repeat the nonsense that "not only has your [real] income decreased, but inflation has made things more expensive". Non-Sequiter. That isn't a quote of something I wrote. The thing I actually wrote is "so not only do you get less for your money you also have less money!". Which is accurate. Shrinkflation means when you go out to buy detergent you only get 15.5 oz instead of 16oz so you're getting less for yo…

> Real income decreasing by 2.3% means you have less money.

You still appear to not understand.

You have MORE money in your paycheck (if you were a median income earner in both 2021 and 2022). That money just has less purchasing power by a greater amount than the increase in money.

More money (nominal income is up), but less purchasing power (real income is down).

Re: Financial anxiety: The alarming side effect of inflation

#50

Post by loeg »

dingnuts wrote: post #35
gjsman-1000 wrote: post #11

Earlier quoted context omitted.

I also can't stand, when it comes to inflation, that the media talks about a low-inflation quarter as though it is "relief for consumers." What about it is relieving? Prices haven't gone down, prices aren't going down, we're supposed to feel relieved that prices are still going up, just slower ? I honestly dare the bankers on the Federal Reserve, and frankly, all of Congress, to live on a 20th percentile income. They…

The measures the government needs to take to end inflation aren't politically popular. For instance, student loan forgiveness and the pause on interest payments are almost certainly a major driver of inflation. Would you say canceling forgiveness and resuming payments for all borrowers in order to cull inflation is a position that will win elections?

The number of voters benefiting from student loan debt pauses is relatively small and they are also mostly not swing voters. I agree we should resume student loan debt payments, for a variety of reasons.
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