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The Ultimate Guide to Inflation

lynalden.com

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Re: The Ultimate Guide to Inflation

#231

Post by OscarCunningham »

vmception wrote: post #48
neffy wrote: post #30

Earlier quoted context omitted.

If the comparison is with 2008, the answer is that the "money" was created on different sides of the balance sheet for different purposes. (We all remember that banks are effectively statistically multiplexing asset cash against liability deposits, nu?) 2008 the Fed printed $2 trillion asset cash(M0) and used it to buy bad debt off the banks books, and put the debt in a runoff fund. No discernible impact on M2. (well…

For people that want to understand this better: “Print” is a misnomer, as only the US Mint prints paper currency and mints metal coins which is a very tiny sliver of the M0 money supply. So to rephrase what actually happens: “in 2008, the Federal Reserve decided to buy a notional amount of $2 trillion in bonds and debt securities, every time it bought some it created the same amount of new US dollars at the time of t…

> “Print” is a misnomer, as only the US Mint prints paper currency and mints metal coins which is a very tiny sliver of the M0 money supply.

If you're going to be pedantic, the Mint only does coins. The Bureau of Engraving and Printing prints the paper money.

Re: The Ultimate Guide to Inflation

#232

Post by grenoire »

midjji wrote: post #229

Has anyone seen any study or discussion of inflation arbitrage? Not in the trivial sense of if you predict inflation borrow and invest, but in the case of viewing a country as multiple separate markets and there being inflation differences between them, which in turn means there is opportunity for arbitrage? It seems to me like a failure to accept that adjacent markets sharing a currency can have different rates of i…

Usually eaten up by the Fisher effect [1] to the extent that it's hard to execute.

[1] https://en.wikipedia.org/wiki/International_Fisher_effect

Re: The Ultimate Guide to Inflation

#233

Post by iptrans »

jeffreygoesto wrote: post #225
aisengard wrote: post #146

Earlier quoted context omitted.

But the surge in revenue from doubling subscribers would (way) more than cover any costs in infrastructure spending. This would not drive any increase in subscription cost, which is purely governed by the competition and content acquisition costs, paired with whatever magic number the major investors/board decides is an acceptable profit margin.

You have never tried to dig a new or more cables under the sidewalk or into the ocean, do you? What you kids think is "free" is in fact heavily subsidized by other people's money.

Very few fiber optic systems are run at capacity.

Upgrading bandwidth is therefore a matter of new optics and router cards, not new cables.

Furthermore new subsea cables bring down the unit cost of bandwidth.

Far more subsea cables have been decommissioned due to them not being cost effective anymore rather than not working.

Re: The Ultimate Guide to Inflation

#234

Post by Cthulhu_ »

cerved wrote: post #213
anm89 wrote: post #16

So awesome to see Lyn Alden at the top of Hacker News. She is an absolute genius! If you aren't familiar with her work and thinking I think a good introduction interview is: https://www.youtube.com/watch?v=f_JmGLMjIOk&t=35s Fun fact: She is an electrical / industrial engineer by trade, not an economist.

If she's not an economist, what is it that lends credence to her writing about economics and monetary policy?

I was waiting for the first gatekeeping comment, and there it is.

Re: The Ultimate Guide to Inflation

#235

Post by sideshowb »

paulpauper wrote: post #110
Negitivefrags wrote: post #103

Earlier quoted context omitted.

To quote a recent Scott Alexander blog post: The post-WWII-but-pre-1970 economic world - the world of “embedded liberalism” - was a pleasant place. There were corporations, but they didn't do anything garish like compete with each other. Executive pay was taxed so heavily that nobody had much incentive to try to increase their profit margin; workforces were so heavily unionized that companies were nervous about any c…

was it really so pleasant? inflation was very high, medical treatments were not so great, entertainment was expensive, most jobs still did not pay much, hours were long. Someone with a tech job probably earns more money on an inflation-adjusted basis and has a much nicer standard of living compared to someone living in the 60s

If you're discussing tech jobs you're already looking at the top 10 percent or so though

Re: The Ultimate Guide to Inflation

#236

Post by dlp211 »

refurb wrote: post #226
dlp211 wrote: post #11

Earlier quoted context omitted.

It's not created money. We didn't just print this money. The money is printed on collateral, that is private industry traded assets for US dollars. This graph also completely ignores that the US dollar is the de facto reserve currency of the world, so dividing dollars by US population is fairly meaningless in 2021.

The fed is creating money. They buy treasuries with money that doesn’t exist as a way of increasing the money supply.

You mean they are buying assets and thus the money is simply providing liquidity and has tangential value. They aren't just printing it and giving it away, this subtle but significant difference is one of the reasons that money supply and inflation have very little if anything to do with one another.

Re: The Ultimate Guide to Inflation

#237

Post by jameslk »

ItsMonkk wrote: post #86

I've been researching this topic independently over the last year and about 70% of what I've researched is presented beautifully within this article. What a great post. The only thing I would try to add that she left off was just the Fed's power[0] over this entire topic. It's mentioned slightly with interest rates dropping, but they play such a pivotal role, together with the yield curve, that it needs to be mention…

This sounds awfully similar to the Austrian business cycle theory:

https://en.m.wikipedia.org/wiki/Austrian_business_cycle_theo...

Re: The Ultimate Guide to Inflation

#238

Post by midjji »

grenoire wrote: post #232
midjji wrote: post #229

Has anyone seen any study or discussion of inflation arbitrage? Not in the trivial sense of if you predict inflation borrow and invest, but in the case of viewing a country as multiple separate markets and there being inflation differences between them, which in turn means there is opportunity for arbitrage? It seems to me like a failure to accept that adjacent markets sharing a currency can have different rates of i…

Usually eaten up by the Fisher effect [1] to the extent that it's hard to execute. [1] https://en.wikipedia.org/wiki/International_Fisher_effect

Single internal market inflation would be accounted for up to global inflation by this to some extent, but it does nothing for internal market differences. Even if tolls were entirely removed you would buy your rice at the local market, probably at 40x the international price.

Re: The Ultimate Guide to Inflation

#239

Post by modo_mario »

syshum wrote: post #147
sologoub wrote: post #114

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less…

>>Most other developed nations put a stop to this a long time ago… hmm I wonder if there might be a connection there... as other nation implement price controls a larger part of the R&D and the costs associated with that are born by the US Further Medicare / medicaid price controls to keep the cost of the entitlement program from going bankrupt has transferred the cost to patients not on those programs Third leg of t…

> "most other developed" nations where waiting months for a specialist is accepted as normal

Which are these developed nations? Because to give my annecdotal perspective it isn't the case in Belgium or others that i know of (With minor exceptions like recently where orthodontists couldn't handle anyone but the most urgent due to covid measures and now have a backlog of patients.)

>and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions.

Every bedroom in every hospital i've been to has been double or single though i have no experience on that front in surrounding countries. Most are double with the single ones being for special cases or people willing to dish out or with great insurance.

Re: The Ultimate Guide to Inflation

#240

Post by nl »

nostromo wrote: post #177
nl wrote: post #155

Earlier quoted context omitted.

> However, rates can’t rise much more, or the UD gov’t will be unable to service its debt. Treasury rates are less than 2%. Prior to 2019 they have never in history been lower[1], except for one month during 2016. I don't think the market is worried in any way about the ability of the US to service a 2% rate. [1] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...

Interest rates aren’t fixed at 2%. If they rise even to historically low standards, the federal government could have trouble servicing its debt.

Of course they aren't fixed! That's the point!!

They are dramatically lower than historical averages. Claiming that makes it hard to service seems counter intuitive!

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