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Estonia clocks fastest inflation in the Eurozone at 20.1 percent

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Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#321

Post by anm89 »

yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

Just a funny observation. If you want to get 100 replies to something on HN, just start your post in good faith with: "I don't understand".

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#322

Post by TMWNN »

puranjay wrote: post #181
yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

A lot of it had to do with the really weird demand patterns that developed over the last two years. We went from 100 demand to 20 as lockdowns happened, then 200 demand as economies opened, then back to 20 again as a new wave of lockdowns took hold. If you were a manufacturer, you had no real way to deal with this unpredictability. Do you add capacity to cater to the post-lockdown 200 demand? If you do, you might end…

>If you were a manufacturer, you had no real way to deal with this unpredictability. Do you add capacity to cater to the post-lockdown 200 demand? If you do, you might end up with too much inventory as demand goes back to the usual 100.

Retailers, too. Both Target and Walmart have reported having far too much inventory. It's one thing when one store has a fire sale on a product it bought too much of, but multiple stores finding that they did so across the board? That's very unusual.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#323

Post by panick21_ »

pessimizer wrote: post #177
panick21_ wrote: post #108

Earlier quoted context omitted.

That might work for some measures of inflation, but it doesn't work for the 'GDP Deflator' for example. That is a different way to measure inflation (and a more exact one) and it not so easy to fake. And even if we go with CPI stuff, the agencies that do these things try to stay consistent. At least in western countries they don't just do whatever they want. The idea that all departments of all western governments ar…

No, the idea that administrations game the numbers to support their previous actions and future proposals is a given. Diagnosing people as mentally ill because they understand this is scary. The real problem is this class of claim: There are secret statistics that support my reaction, which would without those statistics be obviously irrational. I do not have access to these statistics, because their existence is bei…

A basket of goods is only relevant if you can compare it to historical data, otherwise its pointless. And if you start now you can't select your basket of goods and project it back.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#324

Post by panick21_ »

tejohnso wrote: post #149
panick21_ wrote: post #108

Earlier quoted context omitted.

That might work for some measures of inflation, but it doesn't work for the 'GDP Deflator' for example. That is a different way to measure inflation (and a more exact one) and it not so easy to fake. And even if we go with CPI stuff, the agencies that do these things try to stay consistent. At least in western countries they don't just do whatever they want. The idea that all departments of all western governments ar…

> The idea that all departments of all western governments are secretly changing the data I don't think they have to do it secretly. They do it in the open, otherwise there wouldn't be an Investopedia article on CPI controversy that clearly indicates a few problems. There's no internal whistle blowing going on. It's in the open. > And even if we go with CPI stuff, the agencies that do these things try to stay consist…

> They do it in the open

Then please point me at the methodological changes done by these government in the last 1-2 years that were specifically designed to hide higher inflation.

> "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI."

Can this pattern be shown to always lower CPI and can they show that all western governments have enacted the same changes?

And such a methodology would maybe work over a long time-span, it could not be used to hide 1 years high inflation.

CPI is just a dumb and useless measure all together. It really should have no relevance to economic discussion. For macro economic analysis of any kind, the GDP deflator is to be preferred.

> People want a way to quantify how much harder it is to establish a good life with their earnings.

That is a wrong way of thinking about any inflation measure.

> And I don't think the government is being honest about that. Maybe it's too much to ask.

Not sure what honest means here. I don't think the government states anywhere that CPI is some magical measure of 'how easy it is to establishing a good life'.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#325

Post by seanmcdirmid »

zeroonetwothree wrote: post #251
seanmcdirmid wrote: post #150

Earlier quoted context omitted.

Inflation is an increase in money supply over an increase in the value of things to buy with money (or we could say the size of the economy). Money supply could increase, but if it is balanced with a growth in good supply, inflation doesn’t occur. This is why it can’t be computed directly.

That is not true, inflation is exactly when the money supply increases. It doesn’t matter what happens to “good supply”. In fact the supply of goods increases in response to a price increase. That’s why most people think a low level of inflation is healthy.

Let's say your money supply is based on gold, which is relatively fixed. However, your economy and population keep growing. So a loaf of bread cost 1 gram of gold one your country only had 1 million people, but now you have 100 million people and the same amount of gold you are using for money. How much does a loaf of bred cost (bread production has gone up 100 times to match population increase)? (simple estimate: .01 gram of gold). So deflation has occurred. If your gold supply increased 100 times, the prices wouldn't have changed.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#326

Post by ssk169 »

vogre wrote: post #299
ssk169 wrote: post #282

Earlier quoted context omitted.

Let me complete that sentence for you.... after Finland refused to pay in rubels because the signed gas import-export contract specified other currencies.

That changes nothing. Finland refused to pay. Most of the European companies adopted the new scheme within their current contracts, so it was a technical thing. Russia just needed to be paid in currency that can not be stolen by some lunatic government.

It was not just a technical thing... it was unilateral change of a legal contract and blackmail by Russian regime that yet again demonstrated clearly that contracts and treaties mean nothing to it.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#327

Post by ssk169 »

capdeck wrote: post #314
ssk169 wrote: post #282

Earlier quoted context omitted.

Let me complete that sentence for you.... after Finland refused to pay in rubels because the signed gas import-export contract specified other currencies.

Didn't EU freeze all Russian dollar accounts? That basically means Russia never gets those dollar payments. Why would it keep delivering gas for free? Does that "contract" even mean anything then? By switching to rubles Russia actually helped EU nations with a legal way to keep paying for gas.

No, EU has not sanctiond _all_ Russian banks. IIRC the reason was that some counties in the EU still needed to keep paying for gas.

If you fuck up and get your bank account frozen that does not mean that you don’t have to pay your morgage or that you can pay it with monopoly money.

Also there is a big difference between freezing access to a bank account and taking ownership of the funds.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#328

Post by spurgu »

spurgu wrote: post #317
yobbo wrote: post #300

Earlier quoted context omitted.

Read somewhere that a litre of milk in northern Europe costs around a kW/h in energy to produce. Whatever the exact number, it should open your eyes to the importance of energy prices on all other prices. It's not "just" transports.

Money = energy (while credit being a promise on future energy). Cheap energy is how we've created our society. The (huge) problem we're facing is that our economy is based on the (incorrect) assessment that we will have an ever-increasing supply of energy. Barring some miracle invention/discovery (like fission, or a cheap way to produce hydrogen) it's rather the opposite, at least in terms of EROEI. The difference be…

*fusion obv.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#329

Post by nathias »

cs702 wrote: post #252
arguru wrote: post #64

Estonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-act…

I've personally experienced inflation of greater magnitude -- in a developing country in the 1980's. It affected behavior in ways that in hindsight were very counter-productive to economic stability: Every adult person and every business simultaneously tried to spend less, earn more, and hoard more -- which is impossible in the aggregate, because every expense by one person or business is income for another person or…

Same, but hyperinflation. Some people could take credits, bought houses or whole towns and repaid them with pennies.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#330

Post by Jolter »

heavenlyblue wrote: post #137
rawbot wrote: post #35

Doesnt' every country calculate their inflation separately? Because living in Germany, that 7% is laughable. Nothing has risen by that little of an amount. Not food, rent, petrol, etc. Well, I do know of something that has risen to less than 7%: salaries.

Bummer: all prices are included in the calculation, including salaries, so if products have increased 14% and salaries increased 0% then given that markets are relatively same, inflation is only 7%. From the perspective of a consumer though…

I don’t think this is true at all.
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