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The consumer price index shows it isn't inflation. This is 20 years of data and you can click each basket to see it on the graph. "ALL" is up 1% YoY. https://w

by soared 6y ago

The consumer price index shows it isn't inflation. This is 20 years of data and you can click each basket to see it on the graph. "ALL" is up 1% YoY. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm https://www.bls.gov/charts/consumer-price-index/consumer-pri... The only item baskets I found with recent increases are food, new vehicles, and medical care.

CyberRabbi 6y ago
The immediate price of goods isn’t the only measure of inflation. The fact is that the supply of the dollar has exploded. https://www.cnbc.com/2020/12/31/forex-markets-dollar.html https://www.cnbc.com/2020/12/31/forex-markets-dollar.html
- SpicyLemonZest 6y ago
  Inflation is by definition an increase in prices. The amount of money in the economy is called the "money supply". Some economists do argue that the money supply is the primary factor in determining inflation, but that's very different than saying that increases in the money supply are inflation, because the need for money in the economy (usually expressed in terms of the "velocity of money") can vary.
  - CyberRabbi 6y ago
    Prices of goods have different dynamics than the prices of assets. If you don’t understand how money supply relates to inflation I simply don’t know how to engage with you on this topic.
    - SpicyLemonZest 6y ago
      Respectfully, I'm not sure there's much point in proposing an uncommon heterodox theory if you can't engage with people who have a conventional understanding of the topic.
      - CyberRabbi 6y ago
        There is nothing heterodox about the concept of supply-side inflation
    - brazzy 6y ago
      Consumer price inflation is a different thing than asset price inflation. The point you seem to be missing is that when you only say "inflation", it's by very widely dominant convention assumed to be consumer price inflation.
  - KingMachiavelli 6y ago
    > Inflation is by definition an increase in prices. Sure, I think everyone agrees on that but the CPI only measures a vary narrow range of goods and weights them such that it ends up ignoring some very obvious trends. Most of the inflation could simply by accounted for by the drastic rise in stock prices, real estate values, etc. Even though the CPI/Fed doesn't care about those segments with regards to inflation does not mean it is not inflation.
    - harryh 6y ago
      CPI only measures a vary narrow range of goods The basket of goods used to calculate CPI includes thousands of items covering all categories of consumption by US consumers. It includes housing, energy, education, health care, consumer staples, durable goods, etc.
      - fakedang 6y ago
        CPI is such a bullshit measure precisely because of its definition. A lot of items have had their prices go down significantly due to globalization, efficiency in production, Chinese production, regulation or just by going obsolete and inconvenient. At the same time, the measures that matter - Healthcare, education, housing, have all gone up. Not to mention CPI does not account for wage stagnation.
        harryh 6y ago
        At the same time, the measures that matter - Healthcare, education, housing, have all gone up. I literally listed those three categories in my comment as components in the CPI calculation.
        fakedang 6y ago
        And you listed a lot of other components which pull down the overall CPI drastically, thus averaging out the increases in these categories, making the whole exercise pointless. For instance, consumer goods, or electronic products, or automobiles, or gasoline, or literally n other products that have suffered from lower or stagnant prices.
  - ianai 6y ago
    Seems like a weaker dollar was previously called for in response to currency manipulation from foreign countries.
turbinerneiter 6y ago
The consumer price index is a joke. House prices doubled and the consumer price index shows low inflation for the same period. I don't care about the price of a smartphone or whether spaghetti became 10 cents more expensive. I care about whether or not I will be able to afford a house through a lifetime of work. And it's looking bad at that front. I'd literally have to pay back debt for longer than I still have to work before retirement.
- SpicyLemonZest 6y ago
  The consumer price index is an average over an economy with a bunch of heterogenous goods, and a bunch of people who care different amounts about different subsets of them. I tend to agree that cheap housing is more important than cheap spaghetti or cheap iPhones, but that doesn't mean the CPI is wrong; it's just measuring something different than the details of what an optimal household budget ought to look like.
- harryh 6y ago
  If you believe that inflation is actually much higher than is generally believed by the public/markets you shouldn't care so much about mortgage payments > 10 years from now on a loan with fixed payments. The huge inflation you expect will mean the real cost of these payments dwindle in size so they will matter very little to you.
  - paganel 6y ago
    The issue is of course that the salaries/wages don't get raised as much as the other costs mentioned by the OP (housing, among others, I'd add education), they haven't done so for quite a long time now. In order to be able to have "real cost of payments" going down because of inflation you'll still need some down-payment or some basic proof that you'll be able to pay back the loan you're about to get, and those stagnating wages often times are not enough for that.
    - harryh 6y ago
      When a subset of goods are rising in price at a faster rate than other goods you aren't really talking about inflation anymore. You're talking about something else. It's pretty important to recognize the distinction.
ericd 6y ago
There are multiple types of inflation. Asset inflation is what your parent is talking about, which is not well reflected in the CPI. Any product/service with domestic labor as a primary input (healthcare, education, childcare, construction, professional services) has seen much higher inflation.

by soared 6y ago

CyberRabbi 6y ago

The immediate price of goods isn’t the only measure of inflation. The fact is that the supply of the dollar has exploded. https://www.cnbc.com/2020/12/31/forex-markets-dollar.html https://www.cnbc.com/2020/12/31/forex-markets-dollar.html

SpicyLemonZest 6y ago
Inflation is by definition an increase in prices. The amount of money in the economy is called the "money supply". Some economists do argue that the money supply is the primary factor in determining inflation, but that's very different than saying that increases in the money supply are inflation, because the need for money in the economy (usually expressed in terms of the "velocity of money") can vary.
- CyberRabbi 6y ago
  Prices of goods have different dynamics than the prices of assets. If you don’t understand how money supply relates to inflation I simply don’t know how to engage with you on this topic.
  - SpicyLemonZest 6y ago
    Respectfully, I'm not sure there's much point in proposing an uncommon heterodox theory if you can't engage with people who have a conventional understanding of the topic.
    - CyberRabbi 6y ago
      There is nothing heterodox about the concept of supply-side inflation
  - brazzy 6y ago
    Consumer price inflation is a different thing than asset price inflation. The point you seem to be missing is that when you only say "inflation", it's by very widely dominant convention assumed to be consumer price inflation.
- KingMachiavelli 6y ago
  > Inflation is by definition an increase in prices. Sure, I think everyone agrees on that but the CPI only measures a vary narrow range of goods and weights them such that it ends up ignoring some very obvious trends. Most of the inflation could simply by accounted for by the drastic rise in stock prices, real estate values, etc. Even though the CPI/Fed doesn't care about those segments with regards to inflation does not mean it is not inflation.
  - harryh 6y ago
    CPI only measures a vary narrow range of goods The basket of goods used to calculate CPI includes thousands of items covering all categories of consumption by US consumers. It includes housing, energy, education, health care, consumer staples, durable goods, etc.
    - fakedang 6y ago
      CPI is such a bullshit measure precisely because of its definition. A lot of items have had their prices go down significantly due to globalization, efficiency in production, Chinese production, regulation or just by going obsolete and inconvenient. At the same time, the measures that matter - Healthcare, education, housing, have all gone up. Not to mention CPI does not account for wage stagnation.
      - harryh 6y ago
        At the same time, the measures that matter - Healthcare, education, housing, have all gone up. I literally listed those three categories in my comment as components in the CPI calculation.
        fakedang 6y ago
        And you listed a lot of other components which pull down the overall CPI drastically, thus averaging out the increases in these categories, making the whole exercise pointless. For instance, consumer goods, or electronic products, or automobiles, or gasoline, or literally n other products that have suffered from lower or stagnant prices.
- ianai 6y ago
  Seems like a weaker dollar was previously called for in response to currency manipulation from foreign countries.

turbinerneiter 6y ago

The consumer price index is a joke. House prices doubled and the consumer price index shows low inflation for the same period. I don't care about the price of a smartphone or whether spaghetti became 10 cents more expensive. I care about whether or not I will be able to afford a house through a lifetime of work. And it's looking bad at that front. I'd literally have to pay back debt for longer than I still have to work before retirement.

SpicyLemonZest 6y ago
The consumer price index is an average over an economy with a bunch of heterogenous goods, and a bunch of people who care different amounts about different subsets of them. I tend to agree that cheap housing is more important than cheap spaghetti or cheap iPhones, but that doesn't mean the CPI is wrong; it's just measuring something different than the details of what an optimal household budget ought to look like.
harryh 6y ago
If you believe that inflation is actually much higher than is generally believed by the public/markets you shouldn't care so much about mortgage payments > 10 years from now on a loan with fixed payments. The huge inflation you expect will mean the real cost of these payments dwindle in size so they will matter very little to you.
- paganel 6y ago
  The issue is of course that the salaries/wages don't get raised as much as the other costs mentioned by the OP (housing, among others, I'd add education), they haven't done so for quite a long time now. In order to be able to have "real cost of payments" going down because of inflation you'll still need some down-payment or some basic proof that you'll be able to pay back the loan you're about to get, and those stagnating wages often times are not enough for that.
  - harryh 6y ago
    When a subset of goods are rising in price at a faster rate than other goods you aren't really talking about inflation anymore. You're talking about something else. It's pretty important to recognize the distinction.

ericd 6y ago

There are multiple types of inflation. Asset inflation is what your parent is talking about, which is not well reflected in the CPI. Any product/service with domestic labor as a primary input (healthcare, education, childcare, construction, professional services) has seen much higher inflation.