Inflation, in all theories, doesnt measure the change in quality of the product either. Planned obsolescence is a stealth and legal form of product destruction that the buyer doesnt know about until after they have purchased something which is why the saying exists "buyer beware".
The big lie is the cost of housing. I bet for many people rent / mortgage is as much as “the rest”.
Well the mortgage lenders aka banksters decide whether you can afford housing. A stealth form of birth control is high house prices unless those parents put their kids out to work....
I assume because hourly wage is easier to track and provides a more direct comparison. What difference would switching to total compensation make?
Because non-wage compensation has made up a bigger and big part of total compensation - healthcare, 401k match, fringe benefits, bonuses, etc. My dad worked as a teacher and got a super fat pension - that’s not included. Total compensation has risen much more than hourly wage.
There are tons of employers out there that don’t match 401k contributions, make employees pay their healthcare premiums out of their salary, and don’t give meaningful bonuses.
From my limited knowledge, I don’t believe hard money advocates would say there are never any crises, but instead that they are shorter lived and not as large.
> […] but instead that they are shorter lived and not as large. Which of course does not match the historical record: * https://www.theatlantic.com/business/archive/2012/08/why-the... * https://archive.ph/FWKcL
The Atlantic article mentioned the necessity to abandon gold standard temporarily in order to fund WW1, however the American people did not want to enter the war and were unwilling to fund it directly.
An alternate telling would be that abandoning the gold standard allowed the government to circumvent the will of the people and enter a war there was no appetite to get involved in.
Wow, this was the article I was looking for, it summarizes a number of thoughts about economics that I'd been having since the undergraduate days: - There's an authority about the field that really isn't deserved. The models are not made properly, and there's a lot of hand-waiving. I studied economics with a class of engineers and everyone pointed this out. - The pop-sci version of economics is a bunch of easy quips.…
The thing that has nagged at you as it has me, is the simple fact that not only was “economics” conjured and molded by and for the interests of the upper echelon of society, to control the language and thoughts about its terms; but that at the core of it, it’s nothing more than fraud, deception, con artistry. That’s all inflation is too, fraud that if you would commit it, e.g., you added filler to some product you de…
Also, note that mainstream monasteries are at Harvard, Yale, Princeton, Stanford, etc. That's where these secular priests 'corrupt'/preach the next generation of elites.
Wait.. how can that be true? If a dollar last year is worth .5 dollars today, and a Euro last year is worth .8 Euros today, then surely the value of the dollar against the Euro has declined to .5/.8 of what it was last year?
Exchange rates affect inflation for imports, but not for domestic goods. So varying exchange rates by 5% might only change inflation by 1-2% (depending which inflation metric you use). Like many things in macroeconomics, the exchange rate / inflation relationship should be true in equilibrium. But several things are out of equilibrium right now due to supply chain disruptions and a demand surge after the pandemic.
This is an interesting observation! If you follow that train of thought, it might be possible for there to be a situation where in the United States, you can trade one dollar for .8 Euros, and in Europe, you trade one Euro for .8 dollars. In that case there is no single number for exchange rate. This could be the case because in order to spend your US dollars from Europe, you would have to travel to the USA, buy something, and then import it back, and vica versa. So how do exchanges quote a single number for exchange rate?
In-the-matress savings are money that is not invested, such as cash stuffed in a matress. This is the opposite of soaking the rich. The well-off generally have a very large proportion of their wealth invested in productive economic activities, with returns well above inflation.
You haven't convinced me. After all... what about short-term bills? Are they considered savings or investment? What about FX accounts? What about operating capital? In other words... what is "not invested"? An axiomatic definition is imperative... not turtles all the way down. Savings and investment are largely synonymous so I stand by my initial statement. How can one expect to buy a house if they're precluded from…
Short term bills are serving a useful economic function and pay interest, because they are useful to people. When I was saving for a deposit on a house I kept the money in savings accounts and ISAs, again those serve a useful economic function and pay interest.
The basic fact is that money is a financial instrument created and managed by a government for their own purposes. They create it and therefore obviously they control the supply of it. It's value is therefore based on the degree to which people trust that government to manage it effectively, as with a bond or equity or any other financial instrument.
Yeah that decreasing price for silicon chips over the past decades has been a real disaster.
There's a difference between decreases in the price of specific goods that comes about due to technology, and deflation that comes about due to monetary policy. That I can think of, the obvious difference is that the second one almost definitionally means a steady decrease in nominal wages. This seems like a perverse incentive - if I sock away my first paycheck flipping burgers under my mattress and do nothing with i…
> if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today.
Thats still true with inflation too. No idea what your point is.
> f people want to exchange more, they need more coupons. thats a fallacy. nothing prevents you from exchanging more even if you had a fixed number of coupons. you would just have to consider that the value of each coupon becomes more, not less, over time, so you need to use subdivisions of coupons more. Inflation, even at low levels, is ultimately value destruction over time.
> the value of each coupon becomes more, not less, over time Deflation has historically been a bad thing every time it's happened.
Says every governement that promotes inflation. Funny hey?
There's a difference between decreases in the price of specific goods that comes about due to technology, and deflation that comes about due to monetary policy. That I can think of, the obvious difference is that the second one almost definitionally means a steady decrease in nominal wages. This seems like a perverse incentive - if I sock away my first paycheck flipping burgers under my mattress and do nothing with i…
> if I sock away my first paycheck flipping burgers under my mattress and do nothing with it for 50 years, a deflationary regime means I can take it back out and buy a lot more with it than someone with their first paycheck flipping burgers today. Thats still true with inflation too. No idea what your point is.
How is that true with inflation? Under the exact same scenario but with an inflationary monetary policy, any money you sock under your mattress dwindles down to a fraction of its purchasing power over the course of many decades if it is not invested into a vehicle that generates returns. That could be equities, bonds, housing, or even an interest-bearing savings account. The point is that an inflationary regime incentivizes investments as a means of wealth preservation.
What does tracking inflation as a vector mean? My memory of vectors was that they are a direction and a magnitude. But I don’t see how this relates to inflation.
a multi-dimensional vector i presume the OP meant - one value per item. you can still measure the distance between such a vector (even though you can't really visualize it). This distance is then the change in inflation, and can be compared across years.