5 ms·

Don't forget soaring stock prices too. Sure all feels like inflation to me.

by randerson 6y ago

lottin 6y ago
Sure, but inflation is not a feeling. It needs to be estimated using a statistical methodology.
- dominotw 6y ago
  It is a feeling to ppl who want to start a family, buy a house. Official Inflation doesn't count for those. What else is the word that we can use here?
  - lottin 6y ago
    In my opinion it's a perceived increase in prices, which may or may not real, and may or may not have to do with inflation.
    - dominotw 6y ago
      Not quite sure what you mean by 'may not real'. Its not possible for most ordinary ppl to even think about buying a house right now. Why isn't this a concern for policy makers.
      - lottin 6y ago
        I mean that the prices need to be measured objectively, because people aren't very good a tracking prices. They may think prices have risen when they have not.
  - asdff 6y ago
    Cost of living.
    - dominotw 6y ago
      rents are falling though. so not the same.
      - asdff 6y ago
        Rents are falling slightly in dense urban areas that were already inflated from a decades long surge (65% in LA, 30% nationally [1]), but are actually increasing in suburban areas [2]. In those areas, the increases are affecting all sectors of the market: "Overall, CoStar data show the largest rent increases have come in higher-end properties, where average rent for a vacant unit in the Inland Empire has grown 9.3% over the last year, compared with the previous four-year average of 3.8%. In older, more rundown properties where lower-income households are likely to live, rent is up 3.4%, compared with the previous four-year average of 4.9%." 1. https://www.latimes.com/business/real-estate/story/2019-12-27/l-a-rent-rose-65-percent-over-the-last-decade-study-shows https://www.latimes.com/business/real-estate/story/2019-12-2... 2. https://www.latimes.com/business/story/2020-11-23/rent-falling-los-angeles-rising-suburbs-inland-empire https://www.latimes.com/business/story/2020-11-23/rent-falli...
- reedjosh 6y ago
  Sure, but inflation should be viewed as individual vectors. Each vector corresponding to a delta of price and time in a generalized location for a specific good. Something like the CPI cannot be a hard science as it refuses to acknowledge that each and every person will experience inflation based on the inflationary vectors of goods and services multiplied by a persons relative use of said goods and services. Every person experiences a unique inflation rate, and to try and average that in something as wholly simplistic as a basket of goods is pure chicanery aimed at making this topic intractable.
  - lottin 6y ago
    That would be the cost of living for a particular person. Inflation is not that. It's literally a change in the price level of an economy, and what they are trying to measure is exactly that.
    - reedjosh 6y ago
      Yes, the average of the above for the entire economy. I agree, but the methodology of CPI does not at all match anything grounded in the averaging of the above logic. A proper measure of inflation should start from the individual level and reason from there. So if on average 1 loaf of bread is bought by a US consumer and a loaf of bread's rate of inflation is increasing(or even decreasing) by %x, and that's %y of the average consumer's expenditure, then that should contribute %x*%y of the overall inflation rate experienced by the average American consumer. Clearly this is a complex line of reasoning, but it should be the basis of thought on measuring inflation. Yet, housing and medical expenditure are not even considered in CPI. CPI is a terrible measure that I believe was designed to obfuscate.
      - lottin 6y ago
        Housing and health expenditure are listed as components of the CPI [0], so it's almost certain that they're included in its calculation. Again, inflation means an increase in the general price level. An increase in the price of bread is not inflation, because the price of bread is not the price level. It can be used as a data point to try to estimate a change in the price level, but by itself it doesn't tell us anything about the inflation rate (unless of course bread is the only good being produced in the economy). [0] https://www.bls.gov/cpi/tables/relative-importance/2020.htm https://www.bls.gov/cpi/tables/relative-importance/2020.htm
dominotw 6y ago
Talking about inflation seems to have turned into some sort of political issue. I know I can feel the prices rising everywhere. But ppl counter it immediately by saying 'fed has tools like increasing interest rates if it really becomes a problem, they know better than you'
- reedjosh 6y ago
  > Talking about inflation seems to have turned into some sort of political issue. It is political. The method in which inflation is created benefits bankers via interest. Further, higher inflation widens the divide between the asset class and the rest of us. However, the mainline (I would say propaganda) is that `...they know better than you` where `they` are unelected technocrats.

Don't forget soaring stock prices too. Sure all feels like inflation to me.

lottin 6y ago

Sure, but inflation is not a feeling. It needs to be estimated using a statistical methodology.

dominotw 6y ago
It is a feeling to ppl who want to start a family, buy a house. Official Inflation doesn't count for those. What else is the word that we can use here?
- lottin 6y ago
  In my opinion it's a perceived increase in prices, which may or may not real, and may or may not have to do with inflation.
  - dominotw 6y ago
    Not quite sure what you mean by 'may not real'. Its not possible for most ordinary ppl to even think about buying a house right now. Why isn't this a concern for policy makers.
    - lottin 6y ago
      I mean that the prices need to be measured objectively, because people aren't very good a tracking prices. They may think prices have risen when they have not.
- asdff 6y ago
  Cost of living.
  - dominotw 6y ago
    rents are falling though. so not the same.
    - asdff 6y ago
      Rents are falling slightly in dense urban areas that were already inflated from a decades long surge (65% in LA, 30% nationally [1]), but are actually increasing in suburban areas [2]. In those areas, the increases are affecting all sectors of the market: "Overall, CoStar data show the largest rent increases have come in higher-end properties, where average rent for a vacant unit in the Inland Empire has grown 9.3% over the last year, compared with the previous four-year average of 3.8%. In older, more rundown properties where lower-income households are likely to live, rent is up 3.4%, compared with the previous four-year average of 4.9%." 1. https://www.latimes.com/business/real-estate/story/2019-12-27/l-a-rent-rose-65-percent-over-the-last-decade-study-shows https://www.latimes.com/business/real-estate/story/2019-12-2... 2. https://www.latimes.com/business/story/2020-11-23/rent-falling-los-angeles-rising-suburbs-inland-empire https://www.latimes.com/business/story/2020-11-23/rent-falli...
reedjosh 6y ago
Sure, but inflation should be viewed as individual vectors. Each vector corresponding to a delta of price and time in a generalized location for a specific good. Something like the CPI cannot be a hard science as it refuses to acknowledge that each and every person will experience inflation based on the inflationary vectors of goods and services multiplied by a persons relative use of said goods and services. Every person experiences a unique inflation rate, and to try and average that in something as wholly simplistic as a basket of goods is pure chicanery aimed at making this topic intractable.
- lottin 6y ago
  That would be the cost of living for a particular person. Inflation is not that. It's literally a change in the price level of an economy, and what they are trying to measure is exactly that.
  - reedjosh 6y ago
    Yes, the average of the above for the entire economy. I agree, but the methodology of CPI does not at all match anything grounded in the averaging of the above logic. A proper measure of inflation should start from the individual level and reason from there. So if on average 1 loaf of bread is bought by a US consumer and a loaf of bread's rate of inflation is increasing(or even decreasing) by %x, and that's %y of the average consumer's expenditure, then that should contribute %x*%y of the overall inflation rate experienced by the average American consumer. Clearly this is a complex line of reasoning, but it should be the basis of thought on measuring inflation. Yet, housing and medical expenditure are not even considered in CPI. CPI is a terrible measure that I believe was designed to obfuscate.
    - lottin 6y ago
      Housing and health expenditure are listed as components of the CPI [0], so it's almost certain that they're included in its calculation. Again, inflation means an increase in the general price level. An increase in the price of bread is not inflation, because the price of bread is not the price level. It can be used as a data point to try to estimate a change in the price level, but by itself it doesn't tell us anything about the inflation rate (unless of course bread is the only good being produced in the economy). [0] https://www.bls.gov/cpi/tables/relative-importance/2020.htm https://www.bls.gov/cpi/tables/relative-importance/2020.htm

dominotw 6y ago

Talking about inflation seems to have turned into some sort of political issue. I know I can feel the prices rising everywhere. But ppl counter it immediately by saying 'fed has tools like increasing interest rates if it really becomes a problem, they know better than you'

reedjosh 6y ago
> Talking about inflation seems to have turned into some sort of political issue. It is political. The method in which inflation is created benefits bankers via interest. Further, higher inflation widens the divide between the asset class and the rest of us. However, the mainline (I would say propaganda) is that `...they know better than you` where `they` are unelected technocrats.