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Current Inflation Has Different Effects on Different Age Groups

macroaffairs.com

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Re: Current Inflation Has Different Effects on Different Age Groups

#101

Post by A2017U1 »

refurb wrote: post #47
ojbyrne wrote: post #17

"Over the past five years" - I feel that in order to formulate "a historical price index per generation" you need to look at inflation over the entire life of the generation. Baby boomers went through the seventies, when inflation was significantly higher than now.

I was coming here to say that. Inflation rates in the double digits is something millennials have never gone through.

My parents "suffered" through 14% interest rates, wages were rising at breakneck speeds and their mortgage was largely inflated away before they even paid any of it off.

By historical standards it was actually a great time, a single wage family could afford their own house. Such similar circumstances is impossible today in the same city.

Re: Current Inflation Has Different Effects on Different Age Groups

#102

Post by throwaway2048 »

mhuffman wrote: post #97
throwaway2048 wrote: post #86

Earlier quoted context omitted.

there are few jobs or opportunities in cheap places, its not like everyone lives in large cities because they are unwilling to entertain alternatives.

I call bullshit! More than 50% of companies have positions that could telecommute and 24%+ of people telecommute fully or partly now.[2] People do want to live in large cities because of all the cool shit there to do, and that convenience costs money. You can afford a two-bedroom house in the south-eastern part of the US on $15/hour, which wouldn't even cover the costs of being homeless in SF or NYC. I understand peo…

having positions that could telecommute does precious little if the company isnt interested in enabling it. Not sure how this is the worker's fault.

Re: Current Inflation Has Different Effects on Different Age Groups

#103

Post by wtvanhest »

user5994461 wrote: post #69
wtvanhest wrote: post #53

Earlier quoted context omitted.

> Housing is largely a problem to do with interest rates and mortgages inflating the land. Interest rates and debt impact the value of a property, but do not impact the willingness to pay (i.e. the rental market). If rates were 10%, people would still be willing to pay $3k/month for a 1 bed in san francisco. The only difference is that buyers would have to adjust their offering prices due to the additional interest e…

If rates were 10%, the mortgage would be 10 years instead of 25 and that would change everything.

It is more likely that people would extend to 40+ years.

Re: Current Inflation Has Different Effects on Different Age Groups

#104

Post by uiri »

fanzhang wrote: post #100
uiri wrote: post #99

Earlier quoted context omitted.

"Rent" in the colloquial sense of payments pursuant to a residential lease is a different meaning from "rent" in the economics sense of the word. The use of this word falls into the trap of many words with differing colloquial and technical meanings. I don't see how abandoning a word's technical definition because of a competing colloquial definition helps anyone.

The problem is that rent seeking, in the colloquial sense, is an attempt to paint a normal activity, like getting paid rent for housing, with the same brush as bribery type behavior. It's very similar to say, how Trump co-opted fake news to just mean any news he disagreed with. Original creators of the term fake news are rightfully mad because technically it should refer to news that is clearly factually untrue, like…

I've never seen "rent seeking" used with the colloquial rather than technical meaning of the word "rent".

Can you point to an example of this usage?

Re: Current Inflation Has Different Effects on Different Age Groups

#105

Post by refurb »

A2017U1 wrote: post #101
refurb wrote: post #47

Earlier quoted context omitted.

I was coming here to say that. Inflation rates in the double digits is something millennials have never gone through.

My parents "suffered" through 14% interest rates, wages were rising at breakneck speeds and their mortgage was largely inflated away before they even paid any of it off. By historical standards it was actually a great time, a single wage family could afford their own house. Such similar circumstances is impossible today in the same city.

There is a reason they called it stagflation. It wasn’t a good time at all in the US.

Re: Current Inflation Has Different Effects on Different Age Groups

#106

Post by asfasgasg »

uiri wrote: post #104
fanzhang wrote: post #100

Earlier quoted context omitted.

The problem is that rent seeking, in the colloquial sense, is an attempt to paint a normal activity, like getting paid rent for housing, with the same brush as bribery type behavior. It's very similar to say, how Trump co-opted fake news to just mean any news he disagreed with. Original creators of the term fake news are rightfully mad because technically it should refer to news that is clearly factually untrue, like…

I've never seen "rent seeking" used with the colloquial rather than technical meaning of the word "rent". Can you point to an example of this usage?

https://news.ycombinator.com/item?id=17269230

Re: Current Inflation Has Different Effects on Different Age Groups

#107

Post by user5994461 »

wtvanhest wrote: post #103
user5994461 wrote: post #69

Earlier quoted context omitted.

If rates were 10%, the mortgage would be 10 years instead of 25 and that would change everything.

It is more likely that people would extend to 40+ years.

You don't understand how mortgages work.

The duration decreases when the rates increases. It's not possible to reimburse a 30+ years mortgage at 10%.

Re: Current Inflation Has Different Effects on Different Age Groups

#108

Post by wtvanhest »

user5994461 wrote: post #107
wtvanhest wrote: post #103

Earlier quoted context omitted.

It is more likely that people would extend to 40+ years.

You don't understand how mortgages work. The duration decreases when the rates increases. It's not possible to reimburse a 30+ years mortgage at 10%.

Please feel free to look up my bio in my profile. Then go play around with a basic mortgage calculator online. You will find that as you extend the length of the mortgage, the payments will approach the interest only payment level.

Also, in the late 80s, early 90s, interest rates were 15%. 10% is just slightly above historic norms.

It is 100% possible to reimburse a mortgage at 10%. Millions of people have done it.

Re: Current Inflation Has Different Effects on Different Age Groups

#109

Post by user5994461 »

wtvanhest wrote: post #108
user5994461 wrote: post #107

Earlier quoted context omitted.

You don't understand how mortgages work. The duration decreases when the rates increases. It's not possible to reimburse a 30+ years mortgage at 10%.

Please feel free to look up my bio in my profile. Then go play around with a basic mortgage calculator online. You will find that as you extend the length of the mortgage, the payments will approach the interest only payment level. Also, in the late 80s, early 90s, interest rates were 15%. 10% is just slightly above historic norms. It is 100% possible to reimburse a mortgage at 10%. Millions of people have done it.

Well, we have a lot in common then.

Any basic mortgage calculator would show you that the mortgage is not viable, the interest would accrue faster than it can be paid back. The duration or the rate must go down.

In the 80s, the interest rate was higher and the duration was lower. People didn't make a 30 or 40 years mortgage to buy a flat.

Re: Current Inflation Has Different Effects on Different Age Groups

#110

Post by wtvanhest »

user5994461 wrote: post #109
wtvanhest wrote: post #108

Earlier quoted context omitted.

Please feel free to look up my bio in my profile. Then go play around with a basic mortgage calculator online. You will find that as you extend the length of the mortgage, the payments will approach the interest only payment level. Also, in the late 80s, early 90s, interest rates were 15%. 10% is just slightly above historic norms. It is 100% possible to reimburse a mortgage at 10%. Millions of people have done it.

Well, we have a lot in common then. Any basic mortgage calculator would show you that the mortgage is not viable, the interest would accrue faster than it can be paid back. The duration or the rate must go down. In the 80s, the interest rate was higher and the duration was lower. People didn't make a 30 or 40 years mortgage to buy a flat.

Its viable. But you cant pay as much which is why prices come down when rates go up...
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