5 ms·

The dopes that are saving in USD will pay a huge inflation tax. Same for the bond holders (aka bag holders) too.

lkrubner 7y ago
Inflation is extremely low by historical standards: http://www.smashcompany.com/business/nflation-in-the-usa-has-been-low-the-increase-in-asset-prices-is-not-a-form-of–inflation-because-you-dont-lose-the-money-you-spend http://www.smashcompany.com/business/nflation-in-the-usa-has...
- lotsofpulp 7y ago
  Inflation measured across the whole US is not a useful metric when the gaps in economic potential are so wide. Most of the US is not experiencing economic growth, and is probably actually experiencing deflation due to decreasing economic potential and population. I don’t see the purpose of lumping in data from those places with the urban areas that most people want to live in and are able to find work and economic growth. The inflation in rent and real estate is very real because more and more people want to (and need to) live in a smaller and smaller area, which also causes everything else to increase. You can even see it in the stock market. Fewer and fewer companies are capturing most of the gains, and their equity values show it.
  - TheAdamAndChe 7y ago
    The implication here being that people in non-urban areas of the country shouldn't experience any reasonable amount of growth.
    - lotsofpulp 7y ago
      I didn’t imply that. I wrote that trying to measure inflation with one metric in what is essentially two different economies (or countries if you will) is useless.
      - Retric 7y ago
        People move around the US, so their debt or savings is not market specific. Amazon also charges the same amount for a PlayStation or whatever across the US. So, saying it’s useless seems misleading.
        lotsofpulp 7y ago
        People aren't impacted by the cost of Playstations, they're impacted by costs of shelter (housing), education (future income potential), and healthcare. All the data shows an increasing share of the economic growth concentrating into fewer hands. If you are young, and you want to lay the most secure foundations of your family's future, what are your best options? No one with options is advised to move to West Virginia or Oklahoma or upstate NY if they want to achieve security for their family.
        Retric 7y ago
        Moving to a low cost area like West Virginia can be a great way for a specific person to improve their economic situation. A video game streamer for example get's paid in USD, but has minimal benefits from living in say Manhattan. They can still invest in the same stock market, it's only a subset of things that get more or less expensive in various markets. Further, those delta's are fairly consistent over time at least compared with exponential growth from inflation.
        lotsofpulp 7y ago
        But it won't be a great way for them to set their children up. Their schooling, their circle of friends, etc are very material for their future: https://www.abcactionnews.com/news/national/map-income-race-inequality-opportunity-atlas https://www.abcactionnews.com/news/national/map-income-race-... That is why so many people are willing to forego the low cost of living areas and gamble on making it in high cost of living areas even though they may have a lower quality of life.
        7y ago
  - mrep 7y ago
    > Most of the US is not experiencing economic growth, and is probably actually experiencing deflation due to decreasing economic potential and population. Literally every single US state is experiencing growth [0]. > I don’t see the purpose of lumping in data from those places with the urban areas that most people want to live in and are able to find work and economic growth. Most people aren't software engineers and for those that are, there are still plenty of job opportunities outside the bay area. Pretty much every fortune 500 company needs some software engineers and they are spread throughout the US. > The inflation in rent and real estate is very real because more and more people want to (and need to) live in a smaller and smaller area, which also causes everything else to increase. No, it't not [1]. You can sample this yourself by opening up zillow and putting a 250,000 dollar limit and you can find housing pretty much everywhere. Again, most people don't live in the bay area. [0]: https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_economic_growth_rate https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... [1]: https://fred.stlouisfed.org/series/CUUR0000SEHA https://fred.stlouisfed.org/series/CUUR0000SEHA
    - lotsofpulp 7y ago
      Cities and surrounding areas in each state may be experiencing growth, but not the whole state. And even between cities, it's a very uneven balance. It's a different game in the tier 1 cities/suburbs versus elsewhere, and the issue isn't that there are richer areas and poorer areas, the issue is that the gap between them is getting larger. https://www.redfin.com/blog/data-center/ https://www.redfin.com/blog/data-center/
      - mrep 7y ago
        Please define your "tier 1 cities/suburbs" and why they are "tier 1".
        lotsofpulp 7y ago
        Where many rich people compete with many other rich people to live, evidenced by higher than average home prices and higher than average increases in home prices. In the redfin link, the difference between national median sale price and cities such as SF/NYC/LA/BOS/DEN/etc is huge, and growing! There is clearly a migration of money and human resources from many areas into fewer regions of the nation. Cities like Indianpolis/Minneapolis/Nashville/etc are also growing, but I bet the areas around them are not, because people are migrating to the urban areas.
benj111 7y ago
What's the alternative? Stash it under the mattress so you don't make any gains that can be taxed? Save it in gold so you can be taxed as capital gains (unless you suffer a capital loss)? Save in stocks & shares so you can be taxed on your capital gains and dividends? Good luck if you need to fix your boiler in the middle of a down turn. Bitcoin? That has proven itself to be a rock stable currency and you still won't avoid losing your shirt / capital gains tax.
- zMiller 7y ago
  Technically you would've 'lost your shirt' in bitcoin if you had bought it during only 2 of the last 520+ months...
  - soVeryTired 7y ago
    But those two months happen to be the months where everyone was buying. That's what made the price rise so dramatically.
    - smileysteve 7y ago
      > happen to be the months where everyone was buying. So, in many ways the way any market distortion happens. If everybody else is buying, sell. If everybody else is selling, buy.
      - hpkuarg 7y ago
        > If everybody else is buying, sell. If everybody else is selling, buy. As always, the market can remain irrational longer than you can remain solvent.
  - rihegher 7y ago
    I'm pretty sure bitcoin is younger than 43 years
    - andirk 7y ago
dang 7y ago
Please don't post like this to HN. If you know more, share some of what you know so others can learn. Calling your inferiors "dopes" adds no information and breaks the site rule against name-calling. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- 0x8BADF00D 7y ago
  I didn't mean it as "you're a dope", therefore "you are inferior to me". I meant it as "you are a dope if you believe everything the government tells you, especially in regard to inflation figures". Subtle difference.
  - dang 7y ago
    I'm not sure I get the difference, but the more important point is that your comment didn't add much information. If you know more about something, you're in a position to teach the rest of us about it, and that would make a much better HN post. If you don't have time or don't want to, that's cool, but in that case it might be better not to post anything.

Inflation is extremely low by historical standards: http://www.smashcompany.com/business/nflation-in-the-usa-has-been-low-the-increase-in-asset-prices-is-not-a-form-of–inflation-because-you-dont-lose-the-money-you-spend http://www.smashcompany.com/business/nflation-in-the-usa-has...

lotsofpulp 7y ago
Inflation measured across the whole US is not a useful metric when the gaps in economic potential are so wide. Most of the US is not experiencing economic growth, and is probably actually experiencing deflation due to decreasing economic potential and population. I don’t see the purpose of lumping in data from those places with the urban areas that most people want to live in and are able to find work and economic growth. The inflation in rent and real estate is very real because more and more people want to (and need to) live in a smaller and smaller area, which also causes everything else to increase. You can even see it in the stock market. Fewer and fewer companies are capturing most of the gains, and their equity values show it.
- TheAdamAndChe 7y ago
  The implication here being that people in non-urban areas of the country shouldn't experience any reasonable amount of growth.
  - lotsofpulp 7y ago
    I didn’t imply that. I wrote that trying to measure inflation with one metric in what is essentially two different economies (or countries if you will) is useless.
    - Retric 7y ago
      People move around the US, so their debt or savings is not market specific. Amazon also charges the same amount for a PlayStation or whatever across the US. So, saying it’s useless seems misleading.
      - lotsofpulp 7y ago
        People aren't impacted by the cost of Playstations, they're impacted by costs of shelter (housing), education (future income potential), and healthcare. All the data shows an increasing share of the economic growth concentrating into fewer hands. If you are young, and you want to lay the most secure foundations of your family's future, what are your best options? No one with options is advised to move to West Virginia or Oklahoma or upstate NY if they want to achieve security for their family.
        Retric 7y ago
        Moving to a low cost area like West Virginia can be a great way for a specific person to improve their economic situation. A video game streamer for example get's paid in USD, but has minimal benefits from living in say Manhattan. They can still invest in the same stock market, it's only a subset of things that get more or less expensive in various markets. Further, those delta's are fairly consistent over time at least compared with exponential growth from inflation.
        lotsofpulp 7y ago
        But it won't be a great way for them to set their children up. Their schooling, their circle of friends, etc are very material for their future: https://www.abcactionnews.com/news/national/map-income-race-inequality-opportunity-atlas https://www.abcactionnews.com/news/national/map-income-race-... That is why so many people are willing to forego the low cost of living areas and gamble on making it in high cost of living areas even though they may have a lower quality of life.
        7y ago
- mrep 7y ago
  > Most of the US is not experiencing economic growth, and is probably actually experiencing deflation due to decreasing economic potential and population. Literally every single US state is experiencing growth [0]. > I don’t see the purpose of lumping in data from those places with the urban areas that most people want to live in and are able to find work and economic growth. Most people aren't software engineers and for those that are, there are still plenty of job opportunities outside the bay area. Pretty much every fortune 500 company needs some software engineers and they are spread throughout the US. > The inflation in rent and real estate is very real because more and more people want to (and need to) live in a smaller and smaller area, which also causes everything else to increase. No, it't not [1]. You can sample this yourself by opening up zillow and putting a 250,000 dollar limit and you can find housing pretty much everywhere. Again, most people don't live in the bay area. [0]: https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_economic_growth_rate https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... [1]: https://fred.stlouisfed.org/series/CUUR0000SEHA https://fred.stlouisfed.org/series/CUUR0000SEHA
  - lotsofpulp 7y ago
    Cities and surrounding areas in each state may be experiencing growth, but not the whole state. And even between cities, it's a very uneven balance. It's a different game in the tier 1 cities/suburbs versus elsewhere, and the issue isn't that there are richer areas and poorer areas, the issue is that the gap between them is getting larger. https://www.redfin.com/blog/data-center/ https://www.redfin.com/blog/data-center/
    - mrep 7y ago
      Please define your "tier 1 cities/suburbs" and why they are "tier 1".
      - lotsofpulp 7y ago
        Where many rich people compete with many other rich people to live, evidenced by higher than average home prices and higher than average increases in home prices. In the redfin link, the difference between national median sale price and cities such as SF/NYC/LA/BOS/DEN/etc is huge, and growing! There is clearly a migration of money and human resources from many areas into fewer regions of the nation. Cities like Indianpolis/Minneapolis/Nashville/etc are also growing, but I bet the areas around them are not, because people are migrating to the urban areas.

benj111 7y ago

What's the alternative? Stash it under the mattress so you don't make any gains that can be taxed? Save it in gold so you can be taxed as capital gains (unless you suffer a capital loss)? Save in stocks & shares so you can be taxed on your capital gains and dividends? Good luck if you need to fix your boiler in the middle of a down turn. Bitcoin? That has proven itself to be a rock stable currency and you still won't avoid losing your shirt / capital gains tax.

zMiller 7y ago
Technically you would've 'lost your shirt' in bitcoin if you had bought it during only 2 of the last 520+ months...
- soVeryTired 7y ago
  But those two months happen to be the months where everyone was buying. That's what made the price rise so dramatically.
  - smileysteve 7y ago
    > happen to be the months where everyone was buying. So, in many ways the way any market distortion happens. If everybody else is buying, sell. If everybody else is selling, buy.
    - hpkuarg 7y ago
      > If everybody else is buying, sell. If everybody else is selling, buy. As always, the market can remain irrational longer than you can remain solvent.
- rihegher 7y ago
  I'm pretty sure bitcoin is younger than 43 years
  - andirk 7y ago

dang 7y ago

Please don't post like this to HN. If you know more, share some of what you know so others can learn. Calling your inferiors "dopes" adds no information and breaks the site rule against name-calling. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

0x8BADF00D 7y ago
I didn't mean it as "you're a dope", therefore "you are inferior to me". I meant it as "you are a dope if you believe everything the government tells you, especially in regard to inflation figures". Subtle difference.
- dang 7y ago
  I'm not sure I get the difference, but the more important point is that your comment didn't add much information. If you know more about something, you're in a position to teach the rest of us about it, and that would make a much better HN post. If you don't have time or don't want to, that's cool, but in that case it might be better not to post anything.