Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

U.S. Inflation Accelerates to 40-Year High

wsj.com

Post reply on HN
Print view View original

171–180 of 239 posts

Re: U.S. Inflation Accelerates to 40-Year High

#171

Post by pessimizer »

dominotw wrote: post #26
marricks wrote: post #14

Inflation is a good thing for people with a lot of debt but not a lot of money. Think of the millions of student debt borrowers. Even if student debt isn't cancelled, it may get effectively cancelled one way or another. Which just goes to show, if WSJ or Bloomberg say something is bad, it may not actually be bad for you. Let's just hope the pressure stays up so wages keep on increasing. EDIT: I'd like to add, wage gr…

sucks for people like me with no debts though.

With no debts and no job, definitely. You're living off savings that are becoming less valuable.

Re: U.S. Inflation Accelerates to 40-Year High

#172

Post by MichaelZuo »

djrogers wrote: post #58
eldavido wrote: post #27

Earlier quoted context omitted.

> a good reason to never let rates get this low in the first place My brother-in-law remarked that "the fed is overdue to raise rates". My reply: asset prices don't matter to ordinary people. You already know this, but the Fed's mandate is "price stability and full employment". Full employment is going great -- the job market is tight, low-end labor is seeing lots of wage growth, everyone who wants a job is getting o…

> What does matter is ... (rental affordability) Rental affordability is 100% correlated to asset pricing.

Considering your account age and your 14921 karma, the conviction with which you state a complete falsehood, without any hedging, on a topic that is regularly discussed on HN and in broader society doesn’t make me confident in the future of intelligent discussion online…

Re: U.S. Inflation Accelerates to 40-Year High

#173

Post by cjbgkagh »

Workaccount2 wrote: post #138
cjbgkagh wrote: post #82

Earlier quoted context omitted.

Wealthy people have access to lower interest rates, poorer people have to pay a risk premium. The advantage to the wealthy is exacerbated the closer risk free interest rates go to zero. Lower interest rates is hugely advantageous to the wealthy.

Never mind that when you reach a certain level of wealth, capital is your main source of more wealth. So capital becoming cheaper just goes straight to your bottom line.

I don't support low interest rates as I think it's a bad policy that hurts the low income earners and society at large. However, I did predict and intentionally benefit from low interest rate policies to the point that I can now be considered wealthy. This has led to their rather weird situation where my in online disagreements I'm arguing against my economic interests.

Re: U.S. Inflation Accelerates to 40-Year High

#174

Post by redisman »

jcadam wrote: post #157
Rebelgecko wrote: post #111

Earlier quoted context omitted.

If you still have a lot of time left on your mortgage it may be beneficial to refi

I got 2.75 on mine, which is ridiculously low. My parents paid something like 11-12% on their first house.

How much did they pay for that house though?

Re: U.S. Inflation Accelerates to 40-Year High

#175

Post by arcticbull »

toomuchtodo wrote: post #78
recursivedoubts wrote: post #59

Earlier quoted context omitted.

Right. I know they have to say that. But I think they are lying. many such cases

You are both right. The Fed has its public mandates (which it uses the coarse tool of interest rates to manage), but also protects US commercial banks through their refusal to issue narrow bank licenses and their refusal to issue a CBDC or FedAccounts without being shoved by the legislative and executive branches (just like they dragged their feet on FedNow until Congress lit a fire under them because Zelle, owned by…

We're not both right when parent is saying the "federal reserve is lying about its mandate" - which makes no sense, not least because the mandate is defined, by Congress, in the Federal Reserve Act. The Fed's job is to execute on it. You can argue about their efficacy or tactics (in spite of their pretty solid ~110 year track record), but that's not the same thing.

It's like saying you think the USPS is lying that they have the mandate to deliver letters.

Re: U.S. Inflation Accelerates to 40-Year High

#176

Post by toomuchtodo »

arcticbull wrote: post #175
toomuchtodo wrote: post #78

Earlier quoted context omitted.

You are both right. The Fed has its public mandates (which it uses the coarse tool of interest rates to manage), but also protects US commercial banks through their refusal to issue narrow bank licenses and their refusal to issue a CBDC or FedAccounts without being shoved by the legislative and executive branches (just like they dragged their feet on FedNow until Congress lit a fire under them because Zelle, owned by…

We're not both right when parent is saying the "federal reserve is lying about its mandate" - which makes no sense, not least because the mandate is defined, by Congress, in the Federal Reserve Act. The Fed's job is to execute on it. You can argue about their efficacy or tactics (in spite of their pretty solid ~110 year track record), but that's not the same thing. It's like saying you think the USPS is lying that th…

Getting thoughts to bits can be challenging. As the saying goes:

> Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.

Re: U.S. Inflation Accelerates to 40-Year High

#177

Post by sokoloff »

legitster wrote: post #142
sokoloff wrote: post #105

Earlier quoted context omitted.

The Treasury pays over $0.5Trillion in interest every year against a total tax base of around $3.75T. Doubling the interest rate would be directly harmful to the government’s financial position. (They could of course “print” more, but at some point that’s adding to the problem more than alleviating it.) https://www.treasurydirect.gov/govt/reports/ir/ir_expense.ht...

But this is exactly why the Federal Reserve is detached from the rest of the government. While they might coordinate with the executive branch, ultimately the Federal Reserve is supposed to follow their mandate and leave fiscal policy to Congress.

Yes, but it answers "who does [keeping rates this low] help?" with an answer of "all taxpayers, both now and in the near-future".

Re: U.S. Inflation Accelerates to 40-Year High

#178

Post by [deleted] »

toomuchtodo wrote: post #176
arcticbull wrote: post #175

Earlier quoted context omitted.

We're not both right when parent is saying the "federal reserve is lying about its mandate" - which makes no sense, not least because the mandate is defined, by Congress, in the Federal Reserve Act. The Fed's job is to execute on it. You can argue about their efficacy or tactics (in spite of their pretty solid ~110 year track record), but that's not the same thing. It's like saying you think the USPS is lying that th…

Getting thoughts to bits can be challenging. As the saying goes: > Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.

[deleted]

Re: U.S. Inflation Accelerates to 40-Year High

#179

Post by jtbayly »

teraflop wrote: post #49

As usual, take headlines about inflation with a grain of salt. Yes, the year-over-year inflation reached a new peak. But the month-over-month inflation rate has actually been declining since last October: https://www.bls.gov/news.release/cpi.nr0.htm So when organizations publish a new article every month saying inflation is "accelerating", they're being incredibly misleading.

You want me to take the headlines about inflation with a grain of salt? Fair enough. All headlines should be taken with a grain of salt.

But what do you want me to do about the actual inflation I'm experiencing in day-to-day life, that indicate to me the inflation numbers in the headlines aren't even telling the full story?

Re: U.S. Inflation Accelerates to 40-Year High

#180

Post by bko »

arcticbull wrote: post #153
bko wrote: post #16

This is clearly a result of the monetary base expanding at unprecedented levels due to covid (~40% in 2 years). Around $12 trillion was allocated for covid measures and around $10 trillion disbursed. About half was legislative (income support, state local funding, loans) and another half was Fed mostly benefiting banks (asset purchases and liquidity measures). So far we've seen crazy asset inflation (weird the market…

> This is clearly a result of the monetary base expanding at unprecedented levels due to covid (~40% in 2 years). Or, it's because supply chain disruptions have caused shortages, and there's more demand post-reopening chasing a smaller base of supply. Japan more than tripled its money supply since 1990 and CPI remained dead-ass flat for thirty years. It's not sufficient to say that an increase in the money supply nec…

> Or, it's because supply chain disruptions have caused shortages, and there's more demand post-reopening chasing a smaller base of supply.

Here's a thought. Supply chain shortages mean people are buying less and obviously some prices are sticky. For instance, I can't buy a new car regardless of price. The price takes a while to adjust wand when "supply chain" clears up, I'll just be able to buy my car at a higher price, further driving inflation. Repeating "supply chain" is not a counter argument.

> Japan more than tripled its money supply since 1990 and CPI remained dead-ass flat for thirty years. It's not sufficient to say that an increase in the money supply necessarily leads to an increase in prices. [1, 2]

While it is true that not every money supply increase has led to inflation, almost all high inflationary periods coincided with the money supply growing.

> The NASDAQ [5] and S&P 500 [6] P/E ratios are actually roughly in line with historical averages, give or take. Check again. There was a correction recently.

I think you need to check again. We're at 26 S&P. Last time it was this high was 2008. Time before then was briefly in 1890s (not a typo)

> Thanks to the COVID response, we very narrowly escaped another lost decade. [7] A few months of inflation means nothing in the long run.

It's not nothing to the pensioners that saw their wealth evaporate 7.5% in one year and likely more to come. Hopefully social security keeps up...

https://www.multpl.com/s-p-500-pe-ratio

Post reply on HN