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Interesting point, but then as per the methods inflation has been ~10% since 2001, except for the a dip because of the great recession. The inflation, even by

by N1H1L 6y ago

Interesting point, but then as per the methods inflation has been ~10% since 2001, except for the a dip because of the great recession. The inflation, even by this measure, has then been immune to fiscal stimulus.

wyldfire 6y ago
Metrics for inflation are costs and wages, right? If mean wages stay the same but the median wage goes down, how does inflation change? If the buying power of wages goes down in terms of goods/services that can be purchased, how does inflation change? Seems like the huge QE hasn't caused interest rates to increase. But is that independent of wages/cost of necessities?
- BelenusMordred 6y ago
  It's a weighted basket of goods and services. In Australia we removed housing purchase costs from the inflation basket in 1998. To no ones surprise 20 years later it has ballooned wildly out of control over that timeframe. If you remove something from the basket, you make every person who wants to buy that item/service non-existent in the eyes of a central bank. Yet many seem to defend how inflation is decided and changed on a whim. Combine that with the magic number of 2-3% inflation being good, with any other number being bad, and it's clear that the current paradigm which was created in a very different world 60 years ago is a complete fucking mess.
  - cryptonector 6y ago
    That happened in the U.S. as well. If asset prices had stayed in the CPI then presumably interest rates would have to have stayed higher to keep those prices from getting out of control.
- atq2119 6y ago
  Did you mix up inflation and interest rates in your last paragraph? The whole point of QE is to ensure interest rates stay low.
PragmaticPulp 6y ago
10% inflation for 20 years would mean that 2021 prices are 6.7X higher than 2001 prices. The author doesn’t show their calculations, but the claims don’t add up.
- cryptonector 6y ago
  In 1980 the CPI included asset prices, did it not?
amznthrwaway 6y ago
If this was approximately true, then a family making $50k in 2001 would be roughly equivalent to a family making $400k today. If the government stats are approximately true, then a family making $50k in 2001 is roughly equivalent to a family making $75k today. The theory doesn’t pass even cursory inspection.

by N1H1L 6y ago

wyldfire 6y ago

Metrics for inflation are costs and wages, right? If mean wages stay the same but the median wage goes down, how does inflation change? If the buying power of wages goes down in terms of goods/services that can be purchased, how does inflation change? Seems like the huge QE hasn't caused interest rates to increase. But is that independent of wages/cost of necessities?

BelenusMordred 6y ago
It's a weighted basket of goods and services. In Australia we removed housing purchase costs from the inflation basket in 1998. To no ones surprise 20 years later it has ballooned wildly out of control over that timeframe. If you remove something from the basket, you make every person who wants to buy that item/service non-existent in the eyes of a central bank. Yet many seem to defend how inflation is decided and changed on a whim. Combine that with the magic number of 2-3% inflation being good, with any other number being bad, and it's clear that the current paradigm which was created in a very different world 60 years ago is a complete fucking mess.
- cryptonector 6y ago
  That happened in the U.S. as well. If asset prices had stayed in the CPI then presumably interest rates would have to have stayed higher to keep those prices from getting out of control.
atq2119 6y ago
Did you mix up inflation and interest rates in your last paragraph? The whole point of QE is to ensure interest rates stay low.

PragmaticPulp 6y ago

10% inflation for 20 years would mean that 2021 prices are 6.7X higher than 2001 prices. The author doesn’t show their calculations, but the claims don’t add up.

cryptonector 6y ago
In 1980 the CPI included asset prices, did it not?

amznthrwaway 6y ago

If this was approximately true, then a family making $50k in 2001 would be roughly equivalent to a family making $400k today. If the government stats are approximately true, then a family making $50k in 2001 is roughly equivalent to a family making $75k today. The theory doesn’t pass even cursory inspection.