4 ms·

I mean, to some degree I'm not sure how much it matters. If there's some delayed response to the asset inflation then it'll be concerning, but why are inflated

by foota 6y ago

I mean, to some degree I'm not sure how much it matters. If there's some delayed response to the asset inflation then it'll be concerning, but why are inflated asset prices an issues in and of themselves?

toomuchtodo 6y ago
Inflated asset prices means most folks are never going to be able to purchase a home, and equities (which generates wealth with no further effort besides the capital invested, for the most part) will continue to be owned by the wealthiest. Inequality worsens when asset prices increase faster than wages.
- foota 6y ago
  This doesn't check out to me (well, the home part does, but I'm not sure we've seen significantly above normal growth there compared to historical norms, outside of hot coastal markets), but for other assets the price doesn't matter, as you can just get a fraction of them or they're split.
  - deleted 6y ago
    [deleted]
  - grey-area 6y ago
    The wealthy own a lot more assets than the poor, therefore asset inflation increases inequality.
  - dnautics 6y ago
    > well, the home part does, but I'm not sure Hey, this checks out with the very thing that the younger generation complains about, correlates with social injustice in the grandest scale (homelessness), that is one influencing factor in major social unrest in the country (racial disparity in access to real estate). But let's ignore that. Have you considered that the deflection in the economy caused by the inflation happened to manifest itself unevenly across various market segments, and the primary direction that the deflection moved into is the very one you're ignoring?
chrischattin 6y ago
Food, shelter and transportation aren't included in the CPI. Yet those things are essential for quality of life. Inflation is the reason you can't own a house and support a family on a single income anymore. There are a couple other indexes out there that track total cost of living that are pushing ~10% per year inflation right now.
- nickles 6y ago
  > Food, shelter and transportation aren't included in the CPI. This is wrong. Food, shelter, and transportation are all included in the basket used to compute CPI. [0] > The CPI represents all goods and services purchased for consumption by the reference population (U or W). BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services). [0] https://www.bls.gov/cpi/questions-and-answers.htm https://www.bls.gov/cpi/questions-and-answers.htm
  - speeder 6y ago
    I think he refers to the fact that those categories have their inflation higher than CPI. CPI weights changed in 1980, and seemly when using old weights the CPI is 10% instead. I've read (I didn't checked with all details, I don't live in US so it is not that relevant to me) that a major change is that the cost of having a shelter had its weights greatly reduced. (I don't mean the "housing" category in general)
  - hedora 6y ago
    From your [0]: > 9. Is the CPI a cost-of-living index? ... > Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this role to also take into account changes in other governmental or environmental factors that affect consumers' well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime, that would constitute a complete cost-of-living framework. Since the CPI does not attempt to quantify all the factors that affect the cost-of-living, it is sometimes termed a conditional cost-of-living index. Public services are being gutted in the US. I think this explains why cost of living indexes can be north of 10% while the CPI is < 2%. It doesn’t explain how groceries, rent, medical care and education costs have all skyrocketed without raising the CPI. My guess is that people are spending less than they used to on things like recreation and apparel, due to lack of money.
btilly 6y ago
It means that if you don't already own those assets, then you have no hope of ever owning said assets.
- blackflame7000 6y ago
  No you just need to be ingenuitive and solve a problem the world needs solving. Look at Jeff Bezos 30 years ago.
  - triceratops 6y ago
    To buy a house, just start one of the largest companies in history. Easy-peasy.
    - blackflame7000 6y ago
      You can literally buy a house by making a YouTube video now a days. It kinda is easy-peasy. Go look at all those TikTok stars. Your ancestors lived in caves be thankful you can even live in a house. It would be much harder to do that without Banks like the FED. The problem is that you think you need to solve a grand problem instead of inventing something simple like a post-it note or a makeup tutorial. You seem to somehow believe that incumbents ALWAYS win. That is not true. Ingenuity with a superior product is what upends the market, shifts and creates new wealth.
      - nitrogen 6y ago
        The people who are working in the post-it note and makeup factories want houses too, you know.
        blackflame7000 6y ago
        The argument wasn't that they had to invent something to buy a house, it was that it's not a hopeless situation where there is no class mobility. Someone substituted ASSETS for HOUSES for some reason but its not the same thing. ASSETS are what allow some people to have an advantage over others in business. So many babies on these forums whine about their inadequacies instead of bettering themselves. Making my imaginary number go down does change the fact that YOU AND ONLY YOU have the most power to change your life not some "system". If you can't afford to buy a house, get a better job. Sorry that's harsh. Who said life was easy?

by foota 6y ago

toomuchtodo 6y ago

Inflated asset prices means most folks are never going to be able to purchase a home, and equities (which generates wealth with no further effort besides the capital invested, for the most part) will continue to be owned by the wealthiest. Inequality worsens when asset prices increase faster than wages.

foota 6y ago
This doesn't check out to me (well, the home part does, but I'm not sure we've seen significantly above normal growth there compared to historical norms, outside of hot coastal markets), but for other assets the price doesn't matter, as you can just get a fraction of them or they're split.
- deleted 6y ago
  [deleted]
- grey-area 6y ago
  The wealthy own a lot more assets than the poor, therefore asset inflation increases inequality.
- dnautics 6y ago
  > well, the home part does, but I'm not sure Hey, this checks out with the very thing that the younger generation complains about, correlates with social injustice in the grandest scale (homelessness), that is one influencing factor in major social unrest in the country (racial disparity in access to real estate). But let's ignore that. Have you considered that the deflection in the economy caused by the inflation happened to manifest itself unevenly across various market segments, and the primary direction that the deflection moved into is the very one you're ignoring?

chrischattin 6y ago

Food, shelter and transportation aren't included in the CPI. Yet those things are essential for quality of life. Inflation is the reason you can't own a house and support a family on a single income anymore. There are a couple other indexes out there that track total cost of living that are pushing ~10% per year inflation right now.

nickles 6y ago
> Food, shelter and transportation aren't included in the CPI. This is wrong. Food, shelter, and transportation are all included in the basket used to compute CPI. [0] > The CPI represents all goods and services purchased for consumption by the reference population (U or W). BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services). [0] https://www.bls.gov/cpi/questions-and-answers.htm https://www.bls.gov/cpi/questions-and-answers.htm
- speeder 6y ago
  I think he refers to the fact that those categories have their inflation higher than CPI. CPI weights changed in 1980, and seemly when using old weights the CPI is 10% instead. I've read (I didn't checked with all details, I don't live in US so it is not that relevant to me) that a major change is that the cost of having a shelter had its weights greatly reduced. (I don't mean the "housing" category in general)
- hedora 6y ago
  From your [0]: > 9. Is the CPI a cost-of-living index? ... > Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this role to also take into account changes in other governmental or environmental factors that affect consumers' well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime, that would constitute a complete cost-of-living framework. Since the CPI does not attempt to quantify all the factors that affect the cost-of-living, it is sometimes termed a conditional cost-of-living index. Public services are being gutted in the US. I think this explains why cost of living indexes can be north of 10% while the CPI is < 2%. It doesn’t explain how groceries, rent, medical care and education costs have all skyrocketed without raising the CPI. My guess is that people are spending less than they used to on things like recreation and apparel, due to lack of money.

btilly 6y ago

It means that if you don't already own those assets, then you have no hope of ever owning said assets.

blackflame7000 6y ago
No you just need to be ingenuitive and solve a problem the world needs solving. Look at Jeff Bezos 30 years ago.
- triceratops 6y ago
  To buy a house, just start one of the largest companies in history. Easy-peasy.
  - blackflame7000 6y ago
    You can literally buy a house by making a YouTube video now a days. It kinda is easy-peasy. Go look at all those TikTok stars. Your ancestors lived in caves be thankful you can even live in a house. It would be much harder to do that without Banks like the FED. The problem is that you think you need to solve a grand problem instead of inventing something simple like a post-it note or a makeup tutorial. You seem to somehow believe that incumbents ALWAYS win. That is not true. Ingenuity with a superior product is what upends the market, shifts and creates new wealth.
    - nitrogen 6y ago
      The people who are working in the post-it note and makeup factories want houses too, you know.
      - blackflame7000 6y ago
        The argument wasn't that they had to invent something to buy a house, it was that it's not a hopeless situation where there is no class mobility. Someone substituted ASSETS for HOUSES for some reason but its not the same thing. ASSETS are what allow some people to have an advantage over others in business. So many babies on these forums whine about their inadequacies instead of bettering themselves. Making my imaginary number go down does change the fact that YOU AND ONLY YOU have the most power to change your life not some "system". If you can't afford to buy a house, get a better job. Sorry that's harsh. Who said life was easy?