Inflation is at a 40 year high. What can history teach us?

Post by robertlagrant » Wed, Oct 05, 2022, 11:48 AM UTC

watersb wrote: post #431

saurik wrote: post #395

Earlier quoted context omitted.

Is that surprising? Alternatively, do you have a fix in mind? Having power means you can build more things that give you more power faster than someone with less power. You can't change this using inflation, as people will just hold something else instead of cash (and, in fact, inflation seems to most punish the people with the least power, as those people are spending a much much greater proportion of their income o…

Can't hold more than roughly $5000 of real assets and qualify for Medicaid (subsidized healthcare). Keeping that cash in the mattress is a very real option for many people with huge responsibilities (child care) and very little power. [citations needed] - I don't know what the savings limits are as of October 2022.

Post by andrekandre » Wed, Oct 05, 2022, 11:52 AM UTC

watersb wrote: post #425

diordiderot wrote: post #415

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> because it becomes impossible to service the debt Those companies should have made more responsible financial decisions.

When the money was free (near zero interest rates), borrowing money to invest in capital was imminently responsible.

  > borrowing money to invest in capital

Post by donkeyd » Wed, Oct 05, 2022, 11:53 AM UTC

yywwbbn wrote: post #403

dalbasal wrote: post #370

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Idk.. First, you can't get the old vehicle new for cheap. That option is no longer available. You do get an objectively better one, but value is fundamentally subjective. Marginal economics bridges this gap with consumer choice, but if no choice is available then I don't think you can assume consumers are better off. In any case, I think inflation is a backwards lens through which to examine vehicle prices. The prima…

Cars don’t break down as much and last much longer. A 20 year old car nowadays can still be perfectly usable. So in effectively they did get cheaper, just buy used (at least that was the case until 2020..)

Post by gitfan86 » Wed, Oct 05, 2022, 11:58 AM UTC

suoduandao2 wrote: post #440

gitfan86 wrote: post #411

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At this point the fed seems to be saying that those days are over, they will continue to increase rates until inflation hits 2%. Obviously this cannot go on forever because it becomes impossible to service the debt and you have to print money to pay it off. But it gives you more time and prevents hyper-inflation and we can hope that by then AI and other technological advances have made what we consider "economics" mo…

>we can hope that by then AI and other technological advances have made what we consider "economics" mostly irrelevant. Is there a serious hope that AGI will invent a replicator soon after coming online? It seems likeliest to me that if a greater-than-human intelligence comes online it won't have a circumvention for the laws of thermodynamics and there still won't be such a thing as a free lunch.

Post by tsimionescu » Wed, Oct 05, 2022, 12:09 PM UTC

JamesianP wrote: post #405

tsimionescu wrote: post #396

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Just because the stripper can no longer afford food doesn't mean that food sellers will be able to lower their price. Supply issues can't be solved by price changes. Taken to the extreme, people will die of starvation until the population adjusts, so still in the long run demand and supply will meet at the price point.

But the people who were pocketing those higher profits and salaries back when gas prices went down, now do have room to cut prices though and still make money. It can't go both ways. Anyway starving people still have labor to sell, which they will sell as cheaply as they have to, driving everyone's costs down and allowing them to cut prices after all.