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If you really think inflation has been double digits annually since the last recession, you have no idea what you are talking about, sorry. Let's take the most

If you really think inflation has been double digits annually since the last recession, you have no idea what you are talking about, sorry. Let's take the most charitable interpretation of what you said and assume it was 10% since the last recession. (Do the math with something like 15% or 20% if you want to laugh.) 10% annually would be a price increase of about 3.5x since 2008, so if bananas cost $0.63/lb now they would cost $2.20/lb, or if an average home cost $205k it would now cost $718k. What actually happened was that time, basic goods generally got cheaper or stayed fairly similar to their 2008 prices. Bananas are actually around 10% cheaper. Bread is 1.19x its 2008 price. The median new home is $300k versus $205k, or 1.46x - one of the largest increases! That's around 3% annually. The median new car is 1.08x more expensive (and far superior to its 2008 competition.) No, sorry, there is absolutely no way whatsoever that inflation was double digits for the last decade.

dleslie 5y ago
> if an average home cost $205k it would now cost $718k. That's completely within the realm of reason in many places across Canada. I'm not being pithy, it really is.
- owenversteeg 5y ago
  [edit: OP edited their comment to remove some things, so now this comment looks strange] 315k to 800k is 2.53x, not 3.5x. That would represent a 7.1% annual increase in 13 years. If housing is 33% of the average person's budget, and all other costs increased by 3% annually, that'd be 4.3% annual inflation. Nowhere near double digits. (That's of course assuming a very large home price increase like you see in a few Canadian metro areas, which is way out of line with the vast majority of the US)
  - dleslie 5y ago
    4.3% is still a shocking number; it's roughly double the number the BoC declares.
    - owenversteeg 5y ago
      4.3%, like I said is making two huge overestimates: one, that home prices increased nationwide by far more than what they actually did, and two, that all other things inflated by an average of 3%. Plenty of things even saw negative year over year changes. TVs have gotten incredibly cheap. Software is basically free (whether you pay for it with your privacy or go with FOSS.) Furniture, clothes, lights, toys have gotten far cheaper than they were even a few decades ago.
  - throw0101a 5y ago
    Shelter is 27% of Statcan's CPI, with Owned accommodation being 17%: * https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc... However what you're talking about is asset prices, which has nothing to do with inflation. There's a term for rising asset pricing: * https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble Going to US numbers, inflation-adjusted monthly mortgage payments are the lowest they've been in quite a while: * https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri... Purchase price would effect downtime amounts though.
    - owenversteeg 5y ago
      Right, I agree with you entirely - higher home prices over a decade are not an indicator of "record inflation". I was just making that point in a somewhat different way to someone who does not understand the math behind inflation.
    - bingbong70 5y ago
      >However what you're talking about is asset prices, which has nothing to do with inflation. There's a term for rising asset pricing: asset bubble. I would agree with your view if the bubble was isolated but when most/all scarce assets bubble simultaneously, it is the first sign that your explanation is inadequate..
bingbong70 5y ago
I guess median numbers are a terrible metric to use since house prices on the east/west coast have ~2-3x'd since 2008. Michael Saylor says there is now at least a 15-20% annual inflation hurdle that he has to overcome (~2019-2021). He uses 10 year treasury bond yields, house prices, healthcare, education and a few other metrics to come to his number. My calculations (~20-25%) roughly line up with his. All things considered, I trust his calculation method more than plebs that have little real exposure to markets, very few assets under management, and no shareholders to answer to. How Michael Saylor Defines Inflation, Risk Premiums and Hurdle Rates - https://youtube.com/watch?v=sw3kVeE1Pxg https://youtube.com/watch?v=sw3kVeE1Pxg

dleslie 5y ago

> if an average home cost $205k it would now cost $718k. That's completely within the realm of reason in many places across Canada. I'm not being pithy, it really is.

owenversteeg 5y ago
[edit: OP edited their comment to remove some things, so now this comment looks strange] 315k to 800k is 2.53x, not 3.5x. That would represent a 7.1% annual increase in 13 years. If housing is 33% of the average person's budget, and all other costs increased by 3% annually, that'd be 4.3% annual inflation. Nowhere near double digits. (That's of course assuming a very large home price increase like you see in a few Canadian metro areas, which is way out of line with the vast majority of the US)
- dleslie 5y ago
  4.3% is still a shocking number; it's roughly double the number the BoC declares.
  - owenversteeg 5y ago
    4.3%, like I said is making two huge overestimates: one, that home prices increased nationwide by far more than what they actually did, and two, that all other things inflated by an average of 3%. Plenty of things even saw negative year over year changes. TVs have gotten incredibly cheap. Software is basically free (whether you pay for it with your privacy or go with FOSS.) Furniture, clothes, lights, toys have gotten far cheaper than they were even a few decades ago.
- throw0101a 5y ago
  Shelter is 27% of Statcan's CPI, with Owned accommodation being 17%: * https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc... However what you're talking about is asset prices, which has nothing to do with inflation. There's a term for rising asset pricing: * https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble Going to US numbers, inflation-adjusted monthly mortgage payments are the lowest they've been in quite a while: * https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri... Purchase price would effect downtime amounts though.
  - owenversteeg 5y ago
    Right, I agree with you entirely - higher home prices over a decade are not an indicator of "record inflation". I was just making that point in a somewhat different way to someone who does not understand the math behind inflation.
  - bingbong70 5y ago
    >However what you're talking about is asset prices, which has nothing to do with inflation. There's a term for rising asset pricing: asset bubble. I would agree with your view if the bubble was isolated but when most/all scarce assets bubble simultaneously, it is the first sign that your explanation is inadequate..

bingbong70 5y ago

I guess median numbers are a terrible metric to use since house prices on the east/west coast have ~2-3x'd since 2008. Michael Saylor says there is now at least a 15-20% annual inflation hurdle that he has to overcome (~2019-2021). He uses 10 year treasury bond yields, house prices, healthcare, education and a few other metrics to come to his number. My calculations (~20-25%) roughly line up with his. All things considered, I trust his calculation method more than plebs that have little real exposure to markets, very few assets under management, and no shareholders to answer to. How Michael Saylor Defines Inflation, Risk Premiums and Hurdle Rates - https://youtube.com/watch?v=sw3kVeE1Pxg https://youtube.com/watch?v=sw3kVeE1Pxg