The Ultimate Guide to Inflation • Hacker News Board

Re: The Ultimate Guide to Inflation

#361

Post by closeparen » Wed, May 12, 2021, 1:53 AM UTC

ClumsyPilot wrote: post #351

bananabreakfast wrote: post #344

Earlier quoted context omitted.

You can't say it never works because your definition of "works" is completely off base. The population is continuously growing. We must build housing as fast as it grows to just maintain parity, and even faster to reduce prices. Saying building new houses doesn't work to lower prices is like being in a boat taking on water and after throwing a couple buckets of water overboard saying "bailing out water doesn't work"…

There are loads and loads of places where houses are built faster than population is growing, or population is just falling, period. Prices. Keep. Going. Up. It has nothing to do with population, it has everything to do with interest rates and mortgate terms.

People can afford a higher price at a lower interest rate, but in aggregate they're getting just as much house for their money. Why is that bad? Perhaps because prices will collapse later when interest rates rise? It doesn't seem like an affordability problem exactly.

Re: The Ultimate Guide to Inflation

#362

Post by hnick » Wed, May 12, 2021, 7:34 AM UTC

cerved wrote: post #349

runeks wrote: post #218

Earlier quoted context omitted.

The fact that it’s possible to acquire knowledge outside of university.

Right, so what is it about this particular individual that lends credibility? If an economist was writing about computer science, everybody on HN would dismiss it.

Per her bio:

I have a bachelor’s degree in electrical engineering and a master’s degree in engineering management, with a focus on engineering economics and financial modeling. I oversee the finances and day-to-day operations of an engineering facility.

I’ve been performing investment research for over fifteen years in various public and private capacities.

So it is a mixture of education and practical experience. Whether that lends weight to her output is up to the reader.

Re: The Ultimate Guide to Inflation

#363

Post by prakhar897 » Thu, May 13, 2021, 10:02 PM UTC

>> More specifically, the top 1% of households in the United States have $39.4 trillion in assets and less than $0.8 trillion in debts, which gives them a net worth of $38.6 trillion. So, they have a debt/equity ratio of just 2%. Almost their their entire balance sheet consists of assets. Meanwhile, the bottom 50% of households have $7.6 trillion in assets and $5.1 trillion in debts, resulting in just $2.5 trillion in net worth. So, they have a debt/equity ratio of 200%. Their balance sheets have a lot of debt relative to equity, and almost as much in debt as in assets.

Isn't this statement misleading? I know Jeff Bezos personally doesn't hold any debts but Amazon does. So, if inflation happens, it will indirectly benifit bezos. Hence, Inflation is good for everyone ( Both poor and rich).... Am I missing something?

Re: The Ultimate Guide to Inflation

#364

Post by karagenit » Sun, May 16, 2021, 6:50 PM UTC

thebean11 wrote: post #318

karagenit wrote: post #162

Earlier quoted context omitted.

Are you sure that's correct? If I'm reading the article you linked correctly, they basically decided to count savings accounts as M1 instead of M2. But since M1 is included in M2... this shouldn't change the total value of M2? So all of the increases in M2 were actually due to printing of more money (among other things).

Wouldn't counting savings as M1 allow the bank to create additional M2 due to fractional reserve?

I don't think so. When the pandemic hit, the fed made the reserve ratio 0% for all accounts, so counting savings accounts as M1 wouldn't really change how much money banks could lend. However, even under normal circumstances (transactional accounts have a reserve ratio of 10%, other accounts have a reserve ratio of 0%) counting savings accounts as transactional (M1) would actually increase the reserve requirement for banks, decreasing the amount they could loan and therefore decreasing M2 overall.