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

72% of the dollar's purchasing power was destroyed in just four episodes

eco3min.fr

Post reply on HN
Print view View original

221–230 of 277 posts

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#221

Post by underlipton »

twoodfin wrote: post #188
abetusk wrote: post #136

Earlier quoted context omitted.

I think this graph shows the "apples to apples" comparison: https://www.officialdata.org/us/inflation/1800?amount=1 Doing a spot check, this means $1 in in 1913 is equivalent to roughly $32.83 today.

That’s ~3.17% compounded annually. Modest, stable inflation is good. It encourages investment & discourages deferring consumption for indirect monetary reasons. “Stable” is the hard part.

This is dogma, but I'm not sure it's possible or even ideal. Booms and busts seem endemic to any economy that targets inflation, and of course most entities (that don't understand the balance) want to encourage booms and limit busts. Meanwhile, there's another way to think of inflation (and also deflation):

Inflation obfuscates the value of money and therefore of goods, services, etc. In an environment where value is volatile, it makes sense to keep moving, keep trading, because you might come into possession of something that was undervalued before you owned it, or that you'll need in a future when it would otherwise be too expensive. The people who skim off the top of all of this activity love this environment.

Deflation, on the other hand, makes value readily and immediately apparent. What was speculative and risky goes to zero and people hold onto things with intrinsic value. Those who skim profit off of economic activity hate the slowdown, obviously, but maybe you need periods of this to reset when valuations becomes too far removed from reality.

Is it a bad thing for people to buy what they need, when they need it, instead of being forced by inflation to anticipate their needs further and further out?

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#222

Post by mrguyorama »

CamperBob2 wrote: post #144
gruez wrote: post #99

Earlier quoted context omitted.

I didn't realize that such causes like 90+% income taxes, lower income inequality, single earner households, and high unionization rates are "conservative" too.

No one actually paid 90% income taxes. I wish that myth would go away.

So nobody would mind going back to that reality right? Companies would totally pay less in taxes than they do now, right?

Oh, they fight that actually.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#223

Post by tracker1 »

- Shift back to exchange based taxes away from income taxes.

- Spin down the federal reserve, establish a US bank and adjust the self-loans against the future into a solid repayment plan at a minimal interest rate.

- Reestablished precious metal backing to core currencies (gold, silver, etc.)

- Establish constitutional amendment establishing non-living entities and restricting speech rights as such. If a CEO wants to donate personal funds, cool, no corporate backing to political organizations full-stop.

- Strong protections and some spending in favor of domestic security and production.

- Drop subsidy spending for GMO commodity foods and byproducts. Eliminate GRAS protections against any "food" that didn't exist in the US food supply before 1880. FDA acknowledgement when more than one region considers an engineered food product as unsafe, minimally processed animal and plant products excluded.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#224

Post by BadBadJellyBean »

roncesvalles wrote: post #102
znnajdla wrote: post #13

This supports my hunch that the current Iran war creates a lethal trifecta that could potentially cause a dollar collapse. 1. Massive military overspend. 2. Petrodollar squeeze (Strait of Hormuz). 3. Allies pulling out: Europe and the Gulf diversifying both their investments and defense purchases. #1 creates oversupply of dollars and #2 and #3 lower demand. This study supports the idea that wars can indeed destroy pu…

#1: US military war spending concerns are largely overblown. It's expending what it already has. The spending is mostly on its own internal industry i.e. the US economy (with due respect to broken window fallacy). It arguably makes it all back from the increase in oil prices. It's a very different thing to fire a $5m missile that you imported vs one that you made domestically with all-domestic components and labor.

I'd say firing a missile into another country is technically firing finite or hard to acquire resources into another country. All the resources for the new rockets have to be sourced from somewhere and it's not really important where they came from. They are a real cost not some circular funding. It's more or less blowing up big piles of cash that can not easily be replaced.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#225

Post by guzfip »

devsda wrote: post #148
cheema33 wrote: post #95

Earlier quoted context omitted.

> One of the goals of the Heritage Foundation is a weak dollar. They believe they can bring manufacturing back to the US this way. Only cheap labor can bring manufacturing back to the US. Are Americans willing to work in factories for the same wages as the Chinese and Indians? I don't see it happening.

What if the "same wage" as Chinese/Indians nets you close to the same basic necessities and purchasing power as those countries.

You won’t get it unless you also work the 996 slave shift. At which point who gives a fuck about my purchasing power if there’s no time to enjoy it.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#226

Post by RealityVoid »

elzbardico wrote: post #168
znnajdla wrote: post #13

This supports my hunch that the current Iran war creates a lethal trifecta that could potentially cause a dollar collapse. 1. Massive military overspend. 2. Petrodollar squeeze (Strait of Hormuz). 3. Allies pulling out: Europe and the Gulf diversifying both their investments and defense purchases. #1 creates oversupply of dollars and #2 and #3 lower demand. This study supports the idea that wars can indeed destroy pu…

In my worst cynical days, I think that's exactly the plan. Erase US government debt via hyper-inflation, and let the people that will still have liquidity buy all remaining assets the middle class will be desperate to sell at pennies on the dollar.

This kills the golden goose.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#227

Post by hintymad »

fakedang wrote: post #142
hintymad wrote: post #138

Earlier quoted context omitted.

And a strong currency usually means weak manufacturing. And I don't know how a country can be strong without a solid manufacturing sector. Like, when we a war breaks out, we ask our enemies to sell us components and medical key ingredients?

Didn't know Switzerland was a "weak" manufacturer (currently one of the strongest currencies there is, also in wide use).

Yeah, I'm sure there can be exceptions. When the US was super strong in manufacturing back in the 50s, the US dollar was also strong, or at least relatively speaking? That said, the US over the years outsourced their manufacturing, closing their domestic factories. A strong US dollar seemed have played a big role in such outsourcing.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#228

Post by mrguyorama »

fwipsy wrote: post #98
preommr wrote: post #77

Earlier quoted context omitted.

> Europe and the Gulf diversifying both their investments and defense purchases. With what? The euro, yuan? Or weapons from france? I hate to admit it, but it's much less that the US is great because it's the reserve currency, and much more that the world reserve currency is the dollar because the US is what it is. Weapons are expensive, and it only makes sense to buy them from a country that specializes in them. And…

I'm having trouble reconciling this comment with reports that US stockpiles are already being depleted by the Iran war. At this point the US weapons production seems relatively specialized and inefficient, not "huge scale." Someone more informed care to weigh in?

Raytheon is about half the size of Pepsico, with about the same profit margin.

The supposed "Military Industrial Complex" that Ike warned about died years later, and the end of the Cold War buried what little remained. The F-35 is basically the only big military construction project we've had in a very long time, and it comes at a few hundred airframes per year.

In WW2, we were producing 10k+ rather advanced airframes every single year. In each category.

The company that designed and built the M1 Abrams Tank doesn't really exist anymore for example. We, like Russia, might not really have a capability of building 4000 hulls in a short timeframe, which is table stakes if we are actually concerned about a war with China. We were able to do these things back in WW2 because we, through central planning (not a free market), reorganized like 1/20th of the economy into building war assets. FDR decreed that we build 120k Shermans. We eventually managed 50k.

A lot of the supposed "graft" and pork of the defense industry is about giving it a lot of leeway just to stick around. Once you lose domain knowledge it's gone forever, you have to expend considerable resources to rebuild and recollect it. No, documentation doesn't count. Reading all of our notes hasn't fixed the fact that Russia and China can't build the exceptional jet engines we can.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#229

Post by casey2 »

onlyrealcuzzo wrote: post #184
vessenes wrote: post #150

Earlier quoted context omitted.

Yes, a log chart would be better. That said, apples cannot be compared in this case; probably very few of us would choose to go back to 1914. A Tesla model Y would cost $1,680 in 1901 dollars, but would have been worth millions of those same 1901 dollars. Or nothing, depending on how much charging tech you could fit in the frunk. Many quality of life items are not covered by PPP (or money supply or other measures) ad…

Why would anyone pay millions of dollars - that would be the equivalent to a billionaire's entire fortune - for a Tesla Model Y in 1901? You'd have nowhere to charge it. Electricity would be more expensive than gas even if you did. You'd benefit almost nothing from the technology. There's no internet. Not much of it would work. And it wouldn't really help move you forward technologically, as it's just too advanced.

There was little reasons for anybody to buy a Model T either. The reason they did is that the government picked winners, let people drive cars through city roads. Commute times have only gotten longer, GDP growth has been more than offset by cost of roads and road deaths.

Re: 72% of the dollar's purchasing power was destroyed in just four episodes

#230

Post by senderista »

runako wrote: post #197
senderista wrote: post #76

Earlier quoted context omitted.

Mods, can we please remove this and other obviously AI-generated comments from this account?

This reads like every founder-posted comment from a YC company going back 10 years. "obviously AI-generated" is a stretch.

I think the AI tells are pretty obvious.
Post reply on HN