5 ms·

Here it comes. Cost of running money printer too hard.

by cyberpsybin 6y ago

aww_dang 6y ago
If only they could print productivity to match.
- chii 6y ago
  That's what automation is - it's one of the leading causes of increased productivity in the last half century.
  - jeofken 6y ago
    Money printing became decoupled from anything real in 1971. See here what happened to the correlation between productivity and labour income after this https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
    - faet 6y ago
      Purchasing power has been consistent. https://i.redd.it/7qqhlk5i48l61.png https://i.redd.it/7qqhlk5i48l61.png The graph uses average hourly wages which does not include overtime, bonuses, shift premiums, and employer benefits. It also doesn't account for all workers. https://files.stlouisfed.org/files/htdocs/publications/es/07/ES0707.pdf https://files.stlouisfed.org/files/htdocs/publications/es/07... total compensation tracks pretty well.
      - jeofken 6y ago
        Thanks for the interesting data point regarding purchasing power. I think we would agree that you’d expect purchasing power to increase when efficiency increases, rather than staying constant. And as efficiency (as measured by value i.e. usefulness/efficiency of capital) has continued to increase while purchasing power stayed mostly stagnant since 1971, those earning their income from labour are drawing the short stick, while those earning their income from capital gains (ie efficiency of productive stuff) are doing much better. If I misinterpreted your comment (I think we agree), I welcome your explanation of why purchasing power stays the same when efficiency increases since 1971.
        chii 6y ago
        > why purchasing power stays the same when efficiency increases since 1971. i would expect that purchasing power remains consistent for people doing the same work. It's true that capital gains is captured by those who own the capital - but those who do own such capital had to take capital risk to obtain such gains. Labour income (aka, wage income) increased if the labour changed to be more efficient without said use of capital - for example, programmers' income is very high. But for someone whose labour output hasn't changed from the 70's, is it expected that their purchasing power somehow increases (compared to someone else's)?
        jeofken 6y ago
        I appreciate your argument that most labour have not increased in value - I guess this metric would be called “labour productivity”. If you have the graph you linked with a longer timeline - it starts just before 1970s - thatd be interesting. I still see graphs as these https://wtfhappenedin1971home.files.wordpress.com/2020/06/img_0540-1_arrow.jpg https://wtfhappenedin1971home.files.wordpress.com/2020/06/im... as clearly saying labour compensation correlated with advances in technology until 1971, when there was a dramatic shift, and that this is also the time when supply of $ was put in the hands of central bankers rather than any real and external asset.
  - aww_dang 6y ago
    https://www.latimes.com/food/dailydish/la-dd-philippes-45cent-coffee-20150430-story.html https://www.latimes.com/food/dailydish/la-dd-philippes-45cen... >Frank Martin, bought the restaurant from Philippe Mathieu in 1927, and then the coffee was priced at a nickel.
jopsen 6y ago
Having we been giving much printed money to people who need more food? Most people in the western world aren't likely to buy more food, just because they have more money. Not saying, we won't see inflation, who knows, but I doubt we'll see it in household items.
- imtringued 6y ago
  Yeah exactly, cyberpsybin's comment reads as "now that people have enough money to buy food they ate all of it". No, the problem is that there isn't enough food in the first place. The rising price rewards farmers who produce additional food. You just need to run a stimulus program for farmers so that they can expand and mechanize their farms to increase yields. I wish people would look at physical reality first and then look where physical reality takes the market rather than looking at the market and ignoring what physical reality looks like.
- herbst 6y ago
  For about a year now i buy food in bulk. Mostly because its really nice to have everything at home. However i likely buy more food now too as i never experience the 'nothing nice to eat better go to sleep' situations any more.
- voisin 6y ago
  Maybe not buy food directly for personal consumption but buying commodities is a possibility that becomes a self-fulfilling prophecy (like GameStop!). When all financial assets increase to all time highs and commodities don’t then speculators push them up to eliminate cross asset price disparities.
- thaumasiotes 6y ago
  > Most people in the western world aren't likely to buy more food, just because they have more money. If you have more money and you use it to buy more food, that's not inflation. Inflation is when you have more money and you use it to buy the same amount of food. Give people more money, and you will see the price of everything rise without seeing the amount of stuff they buy go up.
gher-shyu3i 6y ago
The sooner we move to a non-artificially inflationary currency that can be devalued by the whims of the government, the better.
PragmaticPulp 6y ago
The article is about developing countries like Indonesia. They mention US inflation down below: > In the U.S., prices rose close to 3% in the year ending Jan. 2, according to NielsenIQ, roughly double the overall rate of inflation. Money printing isn’t the only or even the main driver of inflation. Increased demands for goods during lockdown has put upward pressure on shipping costs, which is reflected in food prices.

Here it comes. Cost of running money printer too hard.

aww_dang 6y ago

If only they could print productivity to match.

chii 6y ago
That's what automation is - it's one of the leading causes of increased productivity in the last half century.
- jeofken 6y ago
  Money printing became decoupled from anything real in 1971. See here what happened to the correlation between productivity and labour income after this https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
  - faet 6y ago
    Purchasing power has been consistent. https://i.redd.it/7qqhlk5i48l61.png https://i.redd.it/7qqhlk5i48l61.png The graph uses average hourly wages which does not include overtime, bonuses, shift premiums, and employer benefits. It also doesn't account for all workers. https://files.stlouisfed.org/files/htdocs/publications/es/07/ES0707.pdf https://files.stlouisfed.org/files/htdocs/publications/es/07... total compensation tracks pretty well.
    - jeofken 6y ago
      Thanks for the interesting data point regarding purchasing power. I think we would agree that you’d expect purchasing power to increase when efficiency increases, rather than staying constant. And as efficiency (as measured by value i.e. usefulness/efficiency of capital) has continued to increase while purchasing power stayed mostly stagnant since 1971, those earning their income from labour are drawing the short stick, while those earning their income from capital gains (ie efficiency of productive stuff) are doing much better. If I misinterpreted your comment (I think we agree), I welcome your explanation of why purchasing power stays the same when efficiency increases since 1971.
      - chii 6y ago
        > why purchasing power stays the same when efficiency increases since 1971. i would expect that purchasing power remains consistent for people doing the same work. It's true that capital gains is captured by those who own the capital - but those who do own such capital had to take capital risk to obtain such gains. Labour income (aka, wage income) increased if the labour changed to be more efficient without said use of capital - for example, programmers' income is very high. But for someone whose labour output hasn't changed from the 70's, is it expected that their purchasing power somehow increases (compared to someone else's)?
        jeofken 6y ago
        I appreciate your argument that most labour have not increased in value - I guess this metric would be called “labour productivity”. If you have the graph you linked with a longer timeline - it starts just before 1970s - thatd be interesting. I still see graphs as these https://wtfhappenedin1971home.files.wordpress.com/2020/06/img_0540-1_arrow.jpg https://wtfhappenedin1971home.files.wordpress.com/2020/06/im... as clearly saying labour compensation correlated with advances in technology until 1971, when there was a dramatic shift, and that this is also the time when supply of $ was put in the hands of central bankers rather than any real and external asset.
- aww_dang 6y ago
  https://www.latimes.com/food/dailydish/la-dd-philippes-45cent-coffee-20150430-story.html https://www.latimes.com/food/dailydish/la-dd-philippes-45cen... >Frank Martin, bought the restaurant from Philippe Mathieu in 1927, and then the coffee was priced at a nickel.

jopsen 6y ago

Having we been giving much printed money to people who need more food? Most people in the western world aren't likely to buy more food, just because they have more money. Not saying, we won't see inflation, who knows, but I doubt we'll see it in household items.

imtringued 6y ago
Yeah exactly, cyberpsybin's comment reads as "now that people have enough money to buy food they ate all of it". No, the problem is that there isn't enough food in the first place. The rising price rewards farmers who produce additional food. You just need to run a stimulus program for farmers so that they can expand and mechanize their farms to increase yields. I wish people would look at physical reality first and then look where physical reality takes the market rather than looking at the market and ignoring what physical reality looks like.
herbst 6y ago
For about a year now i buy food in bulk. Mostly because its really nice to have everything at home. However i likely buy more food now too as i never experience the 'nothing nice to eat better go to sleep' situations any more.
voisin 6y ago
Maybe not buy food directly for personal consumption but buying commodities is a possibility that becomes a self-fulfilling prophecy (like GameStop!). When all financial assets increase to all time highs and commodities don’t then speculators push them up to eliminate cross asset price disparities.
thaumasiotes 6y ago
> Most people in the western world aren't likely to buy more food, just because they have more money. If you have more money and you use it to buy more food, that's not inflation. Inflation is when you have more money and you use it to buy the same amount of food. Give people more money, and you will see the price of everything rise without seeing the amount of stuff they buy go up.

gher-shyu3i 6y ago

The sooner we move to a non-artificially inflationary currency that can be devalued by the whims of the government, the better.

PragmaticPulp 6y ago

The article is about developing countries like Indonesia. They mention US inflation down below: > In the U.S., prices rose close to 3% in the year ending Jan. 2, according to NielsenIQ, roughly double the overall rate of inflation. Money printing isn’t the only or even the main driver of inflation. Increased demands for goods during lockdown has put upward pressure on shipping costs, which is reflected in food prices.