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I question the accuracy. In 2010 I could buy a McDonald's double cheeseburger for $1. Now they're like $3 and they took off a slice of cheese.
In the last 12-24 months the price of fast food in particular has risen at a higher rate than inflation has hit other types of food and goods. Fast food makes no economic sense anymore. And you're right, the food has gotten worse as well.
In the year 2000, there were just less products and services then there are now. And the products that did exist were generally more durable and repairable than today. And in many cases, products that exist now but didn’t back then have reasonable substitutes (like renting or buying movies, since you don’t have Netflix).
I would even take it one step further and say that the ways you had to interact with those substitutes were healthier and more social than what we have now.
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In the last 12-24 months the price of fast food in particular has risen at a higher rate than inflation has hit other types of food and goods. Fast food makes no economic sense anymore. And you're right, the food has gotten worse as well.
What economic sense does fast food ever make? You're paying a premium for a convenience.
Paying for convenience does make sense if you value the convenience.
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> No more cheap borrowing, no more low interest rates, hello constant high inflation. Do you mean that we’ll have high inflation because we’ll keep running massive deficits? Because many countries that don’t have the reserve currency also have low inflation.
It means high inflation because if we're not the reserve currency, global markets sell their dollars, which leaves more dollars unused, which makes them plentiful, which makes them less valuable. This has a knock-on effect; it makes import goods more expensive, it makes government borrowing more expensive (which raises costs for citizens), and loss of petrodollar (the main reason for us being the reserve currency) ma…
So why don't Japan and Germany have high inflation, since those country's currencies aren't the reserve currency either?
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Perpetual trade deficit is modern system of tribute.
> Perpetual trade deficit is modern system of tribute Probably not. Equatorial Guinea, Palau and Kyrgyzstan run the largest current-account deficits as fractions of GDP [1]. (Current account counts goods and services.) [1] https://en.wikipedia.org/wiki/List_of_countries_by_current_a...
Edit: Palau is the exception, it's main industry is tourism. Wealthy westerners come and consume and leave. Palau doesn't produce anything so all that consumption must be imported.
US current accounts deficit ~1 trillion annually, greater than your counterexamples' total combined economies. This should be a clue it's not the same mechanism of action.
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What economic sense does fast food ever make? You're paying a premium for a convenience.
It made sense to pay less money for lower quality prepared food. Now the price is comparable to better food. Paying for convenience does make sense if you value the convenience.
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It means high inflation because if we're not the reserve currency, global markets sell their dollars, which leaves more dollars unused, which makes them plentiful, which makes them less valuable. This has a knock-on effect; it makes import goods more expensive, it makes government borrowing more expensive (which raises costs for citizens), and loss of petrodollar (the main reason for us being the reserve currency) ma…
> It means high inflation because if we're not the reserve currency, global markets sell their dollars, which leaves more dollars unused, which makes them plentiful, which makes them less valuable. So why don't Japan and Germany have high inflation, since those country's currencies aren't the reserve currency either?
Japan may implode if the US dollar collapses, due to the weird USDYen cyclical debt scheme (yen carry trade) propping them up. If the world switches to the Yen to price oil this might not be so bad. They also just started moving away from negative interest rates and ZIRP, and BoJ may reach 1% interest at the end of this month. This is good for Japan, bad for US.
Germany is not doing great but they do/did have a strong manufacturing sector.
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The best example I heard recently was anesthesia. Costs less than $5 to make. Worth a lot more if you have surgery coming up.
The cost of anesthesia is surely concentrated in the labor involved more so than the cost of the chemicals, no?
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The cost of anesthesia is surely concentrated in the labor involved more so than the cost of the chemicals, no?
The example is supposed to illuminate the limits of ppp or gdp adjustment. Anesthesia contributes almost nothing to gdp, but it matters more than almost anything to you if you need surgery.
... Yes, but that's like exemplifying the value of an actual slice of bread vs bitcoin to someone who is hungry.
Macroeconomic numbers may have an impact on the local - as in the individual scale - but that's neither the topic nor the thread.
I question the accuracy. In 2010 I could buy a McDonald's double cheeseburger for $1. Now they're like $3 and they took off a slice of cheese.
Of course this is comparing to one data point that is an outlier. If people are choosing to pay $3 in today's dollars for it, that means that in 2010 McDonald's was underpricing that item relative to its market value. Presumably deliberately as a promotion. Compare across everything you buy and compare like-to-like if you want to judge its accuracy.