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inflation distorts these numbers pretty massively. Especially when you consider something like "quantitative easing" to actually be causing massive inflation, b

by throwaway2048 9y ago

inflation distorts these numbers pretty massively. Especially when you consider something like "quantitative easing" to actually be causing massive inflation, but not visible to consumers in anything except housing, health care and education (all three are not tracked by typical inflation indicators either). The reason that traditional indicators are not being touched is that money is being sucked out of peoples pockets by the aforementioned three factors faster than printed money can inflate them.

meric 9y ago
Most of the money printed is also after 1990.
pjc50 9y ago
> actually be causing massive inflation, but not visible to consumers This is like the "dark matter" theory of the universe, but without any evidence. (The conventional explanation for health and education cost increases is "Baumol cost disease" due to non-automation.)
- throwaway2048 9y ago
  Its tough to explain why housing costs are exploding all over the country, year upon year, almost everywhere (NOT just popular to move to cities like SF and NY), double digit numbers without asking where all the money is coming from. I wont deny that cost disease likely has a role in the rising costs of education and healthcare, but I don't think its a controversial statement that rising real estate costs play a role in that too.
- roenxi 9y ago
  Unlike dark matter, we can measure the money. Take the M2 monetary aggregate ( https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 ). Unless the US has doubled the amount of resources since the financial crisis, the value of the dollars should be reducing vs goods or assets, as the supply of dollars is increasing rapidly.
  - pjc50 9y ago
    Yes, and we can also measure the inflation rate, which is pretty flat: https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi So why don't these two line up? I submit two candidate explanations: a) inflation is actually more an exchange-rate phenomenon, especially vs the dollar, so printing dollars or virtual M2 dollars makes remarkably little difference; b) CPI does a poor job of capturing cost-of-living due to housing.

meric 9y ago

Most of the money printed is also after 1990.

pjc50 9y ago

> actually be causing massive inflation, but not visible to consumers This is like the "dark matter" theory of the universe, but without any evidence. (The conventional explanation for health and education cost increases is "Baumol cost disease" due to non-automation.)

throwaway2048 9y ago
Its tough to explain why housing costs are exploding all over the country, year upon year, almost everywhere (NOT just popular to move to cities like SF and NY), double digit numbers without asking where all the money is coming from. I wont deny that cost disease likely has a role in the rising costs of education and healthcare, but I don't think its a controversial statement that rising real estate costs play a role in that too.
roenxi 9y ago
Unlike dark matter, we can measure the money. Take the M2 monetary aggregate ( https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 ). Unless the US has doubled the amount of resources since the financial crisis, the value of the dollars should be reducing vs goods or assets, as the supply of dollars is increasing rapidly.
- pjc50 9y ago
  Yes, and we can also measure the inflation rate, which is pretty flat: https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi So why don't these two line up? I submit two candidate explanations: a) inflation is actually more an exchange-rate phenomenon, especially vs the dollar, so printing dollars or virtual M2 dollars makes remarkably little difference; b) CPI does a poor job of capturing cost-of-living due to housing.