4 ms·

An inflation rate of ~2% doesn't really harm anyone, especially not the lower end of the socio-economic spectrum. I think the problem is rather the fact that m

by lottin 5y ago

An inflation rate of ~2% doesn't really harm anyone, especially not the lower end of the socio-economic spectrum. I think the problem is rather the fact that many people have unrealistic expectations. If the economy is growing at a rate of 1% annually, meaning the entire wealth produced in the country during a whole year grows by 1%, why do people think that their personal wealth should grow by 10%, 20%, 30% or more? It's not gonna happen.

lend000 5y ago
SPX grows 8% a year (6% when adjusted for GDP growth), US real estate increases 3.8%, and bank interest rates pay FAR less than even "reported" CPI, which is a joke of a metric almost entirely weighted by oil prices, which are not determined by a free market [0]. And that's before the insane levels of money printing and spending we've seen this year, which show no signs of being undone, even as the country opens back up. Inflation isn't 2%. People like you lose a lot of relative wealth to the "smart money" by thinking that's true, and it isn't fair to have a system that exponentially benefits financially smarter investors (an inflationary environment). Barring an improbable windfall or significant income growth, a responsible, hardworking person can't meaningfully improve their financial situation by saving all their money in the bank, which is a sad reality. Asset inflation benefits the wealthy, while bear markets improve wealth inequality, and printing money and QE reduces the corrective measure to wealth inequality to instead reduce the short term pain [1]. Consumer inflation is a tossup. [0] https://www.usinflationcalculator.com/gasoline-prices-adjusted-for-inflation/ https://www.usinflationcalculator.com/gasoline-prices-adjust... [1] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:1989.3,2020.4;quarter:125;series:Net%20worth;demographic:networth;population:1;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
- lottin 5y ago
  > Inflation isn't 2% Okay, then what is it? Obviously you have taken the trouble to measure inflation because you know it's not 2%. So tell us, what is the inflation rate? And show us your calculations please.
  - lend000 5y ago
    Here's a good approximation [0]. Didn't mean to insult your intelligence. That's just consumer inflation, by the way. Asset inflation is a different beast that is better measured in terms of wealth inequality. I'd recommend you digest the links in my original post if you're interested in the topic. [0] https://www.lynalden.com/inflation/ https://www.lynalden.com/inflation/

by lottin 5y ago

lend000 5y ago

SPX grows 8% a year (6% when adjusted for GDP growth), US real estate increases 3.8%, and bank interest rates pay FAR less than even "reported" CPI, which is a joke of a metric almost entirely weighted by oil prices, which are not determined by a free market [0]. And that's before the insane levels of money printing and spending we've seen this year, which show no signs of being undone, even as the country opens back up. Inflation isn't 2%. People like you lose a lot of relative wealth to the "smart money" by thinking that's true, and it isn't fair to have a system that exponentially benefits financially smarter investors (an inflationary environment). Barring an improbable windfall or significant income growth, a responsible, hardworking person can't meaningfully improve their financial situation by saving all their money in the bank, which is a sad reality. Asset inflation benefits the wealthy, while bear markets improve wealth inequality, and printing money and QE reduces the corrective measure to wealth inequality to instead reduce the short term pain [1]. Consumer inflation is a tossup. [0] https://www.usinflationcalculator.com/gasoline-prices-adjusted-for-inflation/ https://www.usinflationcalculator.com/gasoline-prices-adjust... [1] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:1989.3,2020.4;quarter:125;series:Net%20worth;demographic:networth;population:1;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

lottin 5y ago
> Inflation isn't 2% Okay, then what is it? Obviously you have taken the trouble to measure inflation because you know it's not 2%. So tell us, what is the inflation rate? And show us your calculations please.
- lend000 5y ago
  Here's a good approximation [0]. Didn't mean to insult your intelligence. That's just consumer inflation, by the way. Asset inflation is a different beast that is better measured in terms of wealth inequality. I'd recommend you digest the links in my original post if you're interested in the topic. [0] https://www.lynalden.com/inflation/ https://www.lynalden.com/inflation/