I invoice in USD and have expenses in a different currency, and while I've seen a few (~5) percent decline in the exchange rate since then, it's been nowhere near 18%.
What about gold and Bitcoin?
Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
181–190 of 461 posts
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#182I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…
> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only . We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more…
Most of what you have said starting with the definition is incorrect. I suggest you read BLS handbook on methodology.
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#183Earlier quoted context omitted.
What did a college education cost in 1960? I would gladly trade WFH to be the one person supporting a family of 6. (Me, partner, two kids, two grandparents.) The Internet's great and all (although sometimes it seems like it was a mistake), but we're so far from 1 very average person being able to support a middle class life style for 6 people. Median income in 1960 was $5,600, which is equivalent to $60,000 today, bu…
> Which isn't a lot in the FAANG world, but the point is that a very average not-very-smart person was able to provide for that many people back then They weren't. The average household income in the 1960s (i.e., from a single breadwinner) was supporting a household of 3-4 people not 6[1][2]. The claim that you could support a family of 6 on a single breadwinner's income in 1960 and achieve anything close to 2024's q…
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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#184I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…
The “one income household” model of the 50s worked for two reasons. 1) the rest of the world was in ruins, so for 50s-60s US was sole industrial power more or less. 2) artificial labor “scarcity” where POC and women were banned from many occupations. The remaining available labor (ie white men) had more leverage.
3) Lack of technology meant housework was so much more difficult that it actually required a full-time housewife or maid.
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#185Earlier quoted context omitted.
> what most people are looking for is simply cost of living measure You may have cracked the conundrum right there. People use inflation as a gauge of COL. That is incorrect, but understandable given the lack of a well-publicised national COL metric.
> People use inflation as a gauge of COL. Which is interesting as you'd think actually living, and incurring the costs that go along with it, would be a much more useful gauge. Probably goes along with my suspicion that most people, especially those not already accounting for business activities, don't keep any meaningful record of their transactions. Hard to calculate COL without data. But at the same time, there is…
> you'd think actually living, and incurring the costs that go along with it, would be a much more useful gauge
Not for a monetary authority. Given how much drama we have around even our Census Bureau, this gap makes sense. (Also, for every complaint about a given inflation gauge, one increases the parameter and thus bitchable space by orders of magnitude when it comes to COL.)
> there isn't much effort in publishing national COL metrics as it is presumed that people will already know their own situation
But political leaders won’t.
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#186[deleted]
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#187I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…
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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#188I don't really understand the argument at the heart of this article, which is "we should include interest rates in CPI". How do interest rates effect everyday people exactly, other than price inflation on goods and services (which is included separately in CPI)? The only way seems to be interest rates on personal loans and mortgages. So if anything, we should only include interest rates in proportion to how many peop…
> "The only way seems to be interest rates on personal loans and mortgages."
Yes, exactly.
As noted in the article and the underlying study, 80% of car purchases are done via a loan and financing is not part of the inflation measure. When you look at buying a home, most are also done via loans and still financing is not part of the measure. In both cases, interest rates are a factor in affordability and cost.
> Blindly stacking interest rates on top of CPI doesn't really make sense
Well then it's good that's not what they're doing.
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#189Earlier quoted context omitted.
> Right. I am referring to all those who want to know only this, along with everyone else . "along with everyone else" is incorrect, because you have no way of knowing what other people want (and worse, maybe no way to know that). And the only way you "know" what "all those who want to know only this" is because it is a tautology, it is necessarily true . Though, you have no way of knowing what percentage of the popu…
> No, "we" did not pick it, someone else picked it "on our behalf" With a gun to your back, eh? We can use whatever source of inflation we want. Nobody is selecting for us. But, as it happens, CPI is the one we've chosen as the default. If we change our minds, we don't have to default to it forevermore. It's up to us. > Are you blaming others for the way you think? I don't think. You do enough of that for all of us.…
> We can use whatever source of inflation we want. Nobody is selecting for us. But, as it happens, CPI is the one we've chosen as the default. If we change our minds, we don't have to default to it forevermore. It's up to us.
a) Who, specifically, is "we" in this context?
b) What is your information source for these facts?
> Beyond interest rates, it doesn't mean much to Average Joe.
What is your information source for the meaning contained within the minds of the average Joe? Please be specific, please at least try to speak truthfully.
Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula
#190I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…
There’s a number huge flaws in all that logic. Comparing Palo Alto circa 1960 to Palo Alto circa 2020 is frankly bizarre. But if we’re using that logic why stop at 1960? Coulda had that land for almost nothing in 1700, so there was infinite inflation from 1700 to 1960! Gasp! But what’s the result if we look at the price of a compute that a 1960 worker could buy vs a 2020 person? Let’s see a modern household has the e…
> so there was infinite inflation from 1700 to 1960
Infinite is exaggerating but the US dollar has lost >95.0% of its value since the 1700s. So that observation is technically wrong but intuitively is fairly reasonable. If you assumed infinite inflation since then you'd be accurate enough for casual conversation.