M2/Population https://twitter.com/SMT_Solvers/status/1391506520488153091/p... That is an unprecedented hockey stick.
That's a recent spike, not a hockey stick.
A hockey stick requires far more than just a 30% lift in an anomalous year.
The Ultimate Guide to Inflation
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Re: The Ultimate Guide to Inflation
#52Didn’t see healthcare. My dads carefully planned retirement was ruined because he never imagined how expensive it would get. I pay 1400 a month for a family. Still doesn’t cover a lot.
And even if you are insured there is a good chance that a serious illness will eat up your retirement savings.
Re: The Ultimate Guide to Inflation
#53I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…
We still have to pay for food, shelter, transportation, clothing, and other physical things.
Our inner world is richer, and we consume non-decreasing goods. But everything is tied to something in the physical world, even if it's the hardware and energy running it.
Re: The Ultimate Guide to Inflation
#54This a gem:
> John Williams’ Shadow Stats, for example, calculates that annual price inflation has been around 5-10% for the past decade if it was calculated as it used to be. Interestingly, he has not raised his subscription price for his data at all since at least 2008.
Of course, it's bit of an unfair jab because he might be growing his subscriber base, or isn't getting paying customers but doesn't care.
Re: The Ultimate Guide to Inflation
#55Earlier quoted context omitted.
I wonder if the Court of Claims would cover trading losses from the Fed’s actions I should look up the judges to get a feel for their predilections I wanted to see S&P 12,000 for a moment
How would the Fed fulfilling its mandate give anyone a case for recovering their trading losses?
A different part of the Federal government has a mandate of paying people harmed by the Federal Governments actions.
Just make the argument and see.
Google Scholar has all of that court’s cases online in plain text.
Re: The Ultimate Guide to Inflation
#56inflation 150 years is not enough history. inflation is part of game theory.
You should use 150 years across multiple countries i.e. 150 years * N countries. In-sample annual probability of Weimar is well under 0.5% so it is still a tricky topic to reason about even if you have a bigger sample.
Don't make it more complicated than it actually is, or you'll end up like Erasmus Montanus. The causality of hyper-inflation is a pretty simple principle to understand. And the effects are visible. I was there, in pre-war Yugoslavia, when my mother cashed in 1000 NOK for what to my 12 year old eyes looked like Scrooge McDuck amounts of Yugo Dinars. We had to get extra bags to carry it all. Meanwhile everywhere we turned, people were in despair because all value was evaporating. And what was left over, was heavily rationed.
Re: The Ultimate Guide to Inflation
#57Earlier quoted context omitted.
That hockey stick is neutralized by reverse hokey stick. Velocity of M2 Money Stock/Population https://fred.stlouisfed.org/graph/fredgraph.png?g=DPfD
I have no idea why so many people quote velocity but it is an output, not an input. Saying that velocity is falling when supply isn't interesting or relevant. The question is whether supply is growing in excess of demand (as ever).
Because money which isn't spent doesn't contribute to inflation. It might contribute to inflation, but prices don't increase in reaction to possible buyers, only actual buyers (or the expectation of actual buyers, but that's a short term effect since if the customer doesn't materialize you've still got bills to pay).
Re: The Ultimate Guide to Inflation
#58I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…
We still have to pay for food, shelter, transportation, clothing, and other physical things. Our inner world is richer, and we consume non-decreasing goods. But everything is tied to something in the physical world, even if it's the hardware and energy running it.
Right, which is why the "100% digital" world was just a thought experiment.... we don't live in that world, but we do live in a world where an increasing percentage of our money is spent on non-exclusionary goods.... that has to have an effect on inflation.
Re: The Ultimate Guide to Inflation
#59Downsides aside, won't inflation help exports and keep USD-denominated trade attractive? It's not like we're the only economy suffering. We might be doing the best of the whole lot.
Well, the ECB is also printing, and the overseas cooperation is pretty good. But it's still visible on the currency charts that something is going on. Just go to Trading View and have a look. Also compare when money printing started after the "Rony Crash" in March 2020, and when a lot of stocks, commodities, and not least Bitcoin started mooning like crazy soon after. What you're witnessing is a giant transfer of wealth.
Re: The Ultimate Guide to Inflation
#60Downsides aside, won't inflation help exports and keep USD-denominated trade attractive? It's not like we're the only economy suffering. We might be doing the best of the whole lot.
Inflation only improves the balance of trade if we inflate faster than our trading partners. Lately many countries have been engaged in a competitive currency devaluation race to the bottom.