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I've mentioned before [1] but these prices still don't seem that serious. Most prices have still not beat their highs made in 2008-2014 (crude oil, global energ

I've mentioned before [1] but these prices still don't seem that serious. Most prices have still not beat their highs made in 2008-2014 (crude oil, global energy price, eggs, milk, sugar, rice, chicken, pork chops). Ground beef is an outlier, however. And US price per kwh is back at its peak, though it declined in these October numbers to be below... 2014 numbers again. [2] So while the climb up is bad, the prices themselves aren't even unprecedented. In lieu of an extraordinary global supply chain crisis, these numbers actually seem impressively low. We cocked up everything for a year and prices finally shot back to... prices from 7 years ago? If fed policy has any effect at all, I think we owe them one for being so cool-headed and non-drastic these past two years. They're doing much better than politicians or the media, at least. [1] I have some commentary here, and more in a reply to user `anm89` https://news.ycombinator.com/item?id=29114086 https://news.ycombinator.com/item?id=29114086 [2] https://fred.stlouisfed.org/series/APU000072610 https://fred.stlouisfed.org/series/APU000072610

ashtonkem 5y ago
There have been some supply shocks in the past year, but I'm increasingly convinced that the disaster rhetoric around inflation is more of a political argument more than an economic one. Personally I suspect it has more to do with justifying austerity in order to curb labor's demand for more money than anything else.
- rsj_hn 5y ago
  > I suspect it has more to do with justifying austerity in order to curb labor's demand for more money The problem with blowing off inflation because you think it empowers workers is that the latest round of inflation more than erased all the wage increases that were provided. In real terms, workers have been falling behind. So perhaps to make those labor demands more real, it might be a good idea if the government wasn't competing with the private sector for goods and services.
  - ashtonkem 5y ago
    To be clear, I think that all of the price movement we're seeing today is a result of supply chain shock and pent up demand. Arguing about inflation while the ports are still clogged seems extremely short sighted to me; of course prices rise when supply is stuck in a container in LA! Once the supply chains clear up, then we can decide what, if any level of inflation we're seeing. Until that point in time, I will view any doomer narrative about inflation and the proposed solutions for it with extreme skepticism, especially when the proposed solution is convenient for capital and hard on labor.
readme 5y ago
the problem with this line of reasoning is that the Fed has tools to control inflation which they are not using because of it (namely, rate hike) while simultaneously the working and middle classes are feeling the worst effects since they own the fewest equities, least property, and have the most shoestring budgets meanwhile if you're rich you prob got richer perhaps we need to rethink how healthy inflation really is
u320 5y ago
I'm not sure where you are getting your numbers. Food prices are 30% above where they were in 2010 in the CPI for example.
- mywittyname 5y ago
  2010 was the bottom that came after a rather devastating recession. Everything was abnormally cheap in 2010.
  - u320 5y ago
    That doesn't really change much, it's a rounding error in the calculation. The actual number if you compare to the pre-recession peak is 29.7%.
crisdux 5y ago
I see significant errors in your thesis. You are using global commodity prices to make claims about US consumer prices and consumer inflation. We have comprehensive data from national food retail that shows strong price inflation. Your insistence in using global commodity prices to disprove consumer inflation concerns is incorrect.
- simonsarris 5y ago
  No, I have used only US commodity prices, except crude and a global energy figure, which is why I also added US kwh prices. All food prices mentioned are US-only figures.
  - bko 5y ago
    I would note that prices are markovian. So if something doubles over night it means something happened to affect that price. All the information about the thing and its history is represented in the current price. Having that price double overnight conveys information that something is happening. It doesn't matter that the thing cost even more 10 years ago. You have to look at prices on the margin.
  - crisdux 5y ago
    The link you provided in your previous post is about global prices and uses global commodity data. They are certainly not US-only figures. Correcting this error would likely show you that inflation is real.
    - simonsarris 5y ago
      That article is about world food prices, every single link I give in my comments contain US-only food prices: https://news.ycombinator.com/item?id=29114501 https://news.ycombinator.com/item?id=29114501 I have never said that inflation is not real, only that this price inflation has merely returned prices to 2011-2014 levels (excepting beef, which is actually at a new high).
      - 5y ago
MeinBlutIstBlau 5y ago
Cereal I could buy for $3 and granola bars I could buy for $2 now cost $4.30 and $3.29 respectively. Detergent that was $5 is now $7.50. McDonald's cheeseburgers are $2 on their own. That is the largest jump of inflation I've ever experienced in such a short time.
- m0llusk 5y ago
  That is not a lot of information, though. Processed food has been harder hit than real food and areas that are entirely dependent on trucking because of a lack of ports or rail also have seen much greater impacts.
  - mywittyname 5y ago
    Processed food manufactures also have a bunch of tricks up their sleeve to manage price fluctuations, since that is one of the most critical aspects of their success. Tracking price per ounce is a much more accurate measure, since most manufactures want to fix a price-point for a product. However, what even that misses is coupons and sales.
  - coding123 5y ago
    I could go to the grocery store later today and catalog about 400 items for you that have jumped 2 or 3 dollars like that. I am telling you it's insane right now.
    - rsj_hn 5y ago
      You don't need to do that because we have a whole team of people whose jobs it is to measure this in a more systematic way - by checking prices all over the country and in a large number of different stores and for many different goods. They report that dood prices have climbed from 260 to 277 over the last year (all items). Within that group, the biggest climbers were meats, poultry, fish, and eggs (+12%). https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm
      - 5y ago
nightski 5y ago
It's not the prices people are necessarily scared with, it's the rate of increase. It's higher than was anticipated. What's also concerning is that the velocity of money is really low while M2 money supply is very high. If the velocity picks up we could be in a world of hurt.
- throwawaygh 5y ago
  This post and its parent hit the nail on the head. Levels aren't particularly worrisome. High, sure, not scary high. However, you should still be worried. Just not about current prices. It's various first and second derivatives + the amount of "potential energy" in the system that have (informed) people scared.
  - podgaj 5y ago
    But you’re mistaking inflation for the rate of inflation growth. The rate of inflation growth is horrible right now.
    - throwawaygh 5y ago
      > But you’re mistaking inflation for the rate of inflation growth. You mean... like... a first derivative? What am I mistaken about? I literally said literally exactly this: >> It's various first and second derivatives + the amount of "potential energy" in the system that have (informed) people scared. (and, in fact, it's not just the rate of inflation but also several other related rates of change and rates of rates of change and stocks of things that can fuel changes in those rates, but engaging in that nuance seems a bit fruitless given that you seem to be literally repeating my own point back to me while thinking you're disagreeing with me.) > The rate of inflation growth is horrible right now. yes thanks for repeating my point for me.
      - curryst 5y ago
        There's really not a need to be that hostile. They probably misread; I did too at first. I thought you were referring to financial derivatives.
coding123 5y ago
Not a single item I buy in the grocery store right now is less than 50% more expensive than it was 6 months ago.
- bluedino 5y ago
  I used to spend an average of $50 a trip and now it is $70
- bell-cot 5y ago
  Here (Michigan, US) there is not a single grocery item I buy that has gone up even 35%. Most items have not gone up at all. Might you tell us your approximate location?
  - JCharante 5y ago
    In Massachusetts I haven't noticed any prices going up, everything is the same as 3 years ago.
podgaj 5y ago
I live in disability. And I can tell you the inflation is serious.
nostrademons 5y ago
I feel like it's Feb 2020 and people are just hearing about this new virus called 2019-nCoV (or alternatively "China Flu"). There are maybe 100 cases in the whole U.S, your chance of getting it is literally 1 in a million, and nobody has died from it yet. Tech companies are shutting down left and right and the general public is like "What's the big deal?" The big deal is exponential growth, which both viral spread and inflation exhibit and which almost nobody has a good intuition for. 1.5% inflation over 10 years means that prices go up 16%; this is what most folks (outside of Silicon Valley) have experienced in recent memory. 5% inflation over 10 years means that prices go up 63%. Your Big Mac will cost $6.50 instead of $4. 20% inflation (like we've seen in housing, or ground beef) means that prices go up 6x. Your average house will be $2M rather than $300K. Folks who look at the numbers and say we're doomed are plugging the data into a mental model of inflation, government debt, and the money supply and realizing that the logical conclusion is that the dollar is going to go to zero soon. Folks who look at the numbers and say there's nothing to worry about are looking at the numbers today.
missinfo 5y ago
From the CEO of Square who access to real world data at scale: Hyperinflation is going to change everything. It’s happening. https://twitter.com/jack/status/1451733913961783299 https://twitter.com/jack/status/1451733913961783299
- boc 5y ago
  Jack is a crypto maximalist who is trying to sound the alarm over a very, very unlikely outcome. He's biased.
- mullingitover 5y ago
  CEO of Square, but also kind of a crank who's long on crypto, so he has a vested interest in convincing people to YOLO their savings into crypto so he can cash in. I take his statements with several blocks of salt.
  - Sammi 5y ago
    Just wow. So he's just a crank because he likes Bitcoin now? How easily you just brushed off the successful startup ceo of not one, but two huge tech startups (Twitter, Square). What do you think it takes to be able to do what he did? Oh no, he's just a crank because he likes Bitcoin now, let's just brush off everything he says from now on. It's not like he's someone who's actually proven himself capable and as someone worth listening to.
    - throwawaygh 5y ago
      > So he's just a crank because he likes Bitcoin now? Read it as "he's a crank and also likes bitcoin". Anyways. There's undeniably a massive PR campaign right now to get retail investors into crypto. Fucking football players and media personalities are taking paychecks in bitcoin and posting PR-drafted tweets about it. Even if I were still long crypto, I'd be sitting the next few months out. Way too reminiscent of dotcom -- folks who know nothing about finance, investing, or crypto are "investing" in highly volatile speculative vehicles. This only ends one way.

ashtonkem 5y ago

There have been some supply shocks in the past year, but I'm increasingly convinced that the disaster rhetoric around inflation is more of a political argument more than an economic one. Personally I suspect it has more to do with justifying austerity in order to curb labor's demand for more money than anything else.

rsj_hn 5y ago
> I suspect it has more to do with justifying austerity in order to curb labor's demand for more money The problem with blowing off inflation because you think it empowers workers is that the latest round of inflation more than erased all the wage increases that were provided. In real terms, workers have been falling behind. So perhaps to make those labor demands more real, it might be a good idea if the government wasn't competing with the private sector for goods and services.
- ashtonkem 5y ago
  To be clear, I think that all of the price movement we're seeing today is a result of supply chain shock and pent up demand. Arguing about inflation while the ports are still clogged seems extremely short sighted to me; of course prices rise when supply is stuck in a container in LA! Once the supply chains clear up, then we can decide what, if any level of inflation we're seeing. Until that point in time, I will view any doomer narrative about inflation and the proposed solutions for it with extreme skepticism, especially when the proposed solution is convenient for capital and hard on labor.

readme 5y ago

the problem with this line of reasoning is that the Fed has tools to control inflation which they are not using because of it (namely, rate hike) while simultaneously the working and middle classes are feeling the worst effects since they own the fewest equities, least property, and have the most shoestring budgets meanwhile if you're rich you prob got richer perhaps we need to rethink how healthy inflation really is

u320 5y ago

I'm not sure where you are getting your numbers. Food prices are 30% above where they were in 2010 in the CPI for example.

mywittyname 5y ago
2010 was the bottom that came after a rather devastating recession. Everything was abnormally cheap in 2010.
- u320 5y ago
  That doesn't really change much, it's a rounding error in the calculation. The actual number if you compare to the pre-recession peak is 29.7%.

crisdux 5y ago

I see significant errors in your thesis. You are using global commodity prices to make claims about US consumer prices and consumer inflation. We have comprehensive data from national food retail that shows strong price inflation. Your insistence in using global commodity prices to disprove consumer inflation concerns is incorrect.

simonsarris 5y ago
No, I have used only US commodity prices, except crude and a global energy figure, which is why I also added US kwh prices. All food prices mentioned are US-only figures.
- bko 5y ago
  I would note that prices are markovian. So if something doubles over night it means something happened to affect that price. All the information about the thing and its history is represented in the current price. Having that price double overnight conveys information that something is happening. It doesn't matter that the thing cost even more 10 years ago. You have to look at prices on the margin.
- crisdux 5y ago
  The link you provided in your previous post is about global prices and uses global commodity data. They are certainly not US-only figures. Correcting this error would likely show you that inflation is real.
  - simonsarris 5y ago
    That article is about world food prices, every single link I give in my comments contain US-only food prices: https://news.ycombinator.com/item?id=29114501 https://news.ycombinator.com/item?id=29114501 I have never said that inflation is not real, only that this price inflation has merely returned prices to 2011-2014 levels (excepting beef, which is actually at a new high).
    - 5y ago

MeinBlutIstBlau 5y ago

Cereal I could buy for $3 and granola bars I could buy for $2 now cost $4.30 and $3.29 respectively. Detergent that was $5 is now $7.50. McDonald's cheeseburgers are $2 on their own. That is the largest jump of inflation I've ever experienced in such a short time.

m0llusk 5y ago
That is not a lot of information, though. Processed food has been harder hit than real food and areas that are entirely dependent on trucking because of a lack of ports or rail also have seen much greater impacts.
- mywittyname 5y ago
  Processed food manufactures also have a bunch of tricks up their sleeve to manage price fluctuations, since that is one of the most critical aspects of their success. Tracking price per ounce is a much more accurate measure, since most manufactures want to fix a price-point for a product. However, what even that misses is coupons and sales.
- coding123 5y ago
  I could go to the grocery store later today and catalog about 400 items for you that have jumped 2 or 3 dollars like that. I am telling you it's insane right now.
  - rsj_hn 5y ago
    You don't need to do that because we have a whole team of people whose jobs it is to measure this in a more systematic way - by checking prices all over the country and in a large number of different stores and for many different goods. They report that dood prices have climbed from 260 to 277 over the last year (all items). Within that group, the biggest climbers were meats, poultry, fish, and eggs (+12%). https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm
    - 5y ago

nightski 5y ago

It's not the prices people are necessarily scared with, it's the rate of increase. It's higher than was anticipated. What's also concerning is that the velocity of money is really low while M2 money supply is very high. If the velocity picks up we could be in a world of hurt.

throwawaygh 5y ago
This post and its parent hit the nail on the head. Levels aren't particularly worrisome. High, sure, not scary high. However, you should still be worried. Just not about current prices. It's various first and second derivatives + the amount of "potential energy" in the system that have (informed) people scared.
- podgaj 5y ago
  But you’re mistaking inflation for the rate of inflation growth. The rate of inflation growth is horrible right now.
  - throwawaygh 5y ago
    > But you’re mistaking inflation for the rate of inflation growth. You mean... like... a first derivative? What am I mistaken about? I literally said literally exactly this: >> It's various first and second derivatives + the amount of "potential energy" in the system that have (informed) people scared. (and, in fact, it's not just the rate of inflation but also several other related rates of change and rates of rates of change and stocks of things that can fuel changes in those rates, but engaging in that nuance seems a bit fruitless given that you seem to be literally repeating my own point back to me while thinking you're disagreeing with me.) > The rate of inflation growth is horrible right now. yes thanks for repeating my point for me.
    - curryst 5y ago
      There's really not a need to be that hostile. They probably misread; I did too at first. I thought you were referring to financial derivatives.

coding123 5y ago

Not a single item I buy in the grocery store right now is less than 50% more expensive than it was 6 months ago.

bluedino 5y ago
I used to spend an average of $50 a trip and now it is $70
bell-cot 5y ago
Here (Michigan, US) there is not a single grocery item I buy that has gone up even 35%. Most items have not gone up at all. Might you tell us your approximate location?
- JCharante 5y ago
  In Massachusetts I haven't noticed any prices going up, everything is the same as 3 years ago.

podgaj 5y ago

I live in disability. And I can tell you the inflation is serious.

nostrademons 5y ago

I feel like it's Feb 2020 and people are just hearing about this new virus called 2019-nCoV (or alternatively "China Flu"). There are maybe 100 cases in the whole U.S, your chance of getting it is literally 1 in a million, and nobody has died from it yet. Tech companies are shutting down left and right and the general public is like "What's the big deal?" The big deal is exponential growth, which both viral spread and inflation exhibit and which almost nobody has a good intuition for. 1.5% inflation over 10 years means that prices go up 16%; this is what most folks (outside of Silicon Valley) have experienced in recent memory. 5% inflation over 10 years means that prices go up 63%. Your Big Mac will cost $6.50 instead of $4. 20% inflation (like we've seen in housing, or ground beef) means that prices go up 6x. Your average house will be $2M rather than $300K. Folks who look at the numbers and say we're doomed are plugging the data into a mental model of inflation, government debt, and the money supply and realizing that the logical conclusion is that the dollar is going to go to zero soon. Folks who look at the numbers and say there's nothing to worry about are looking at the numbers today.

missinfo 5y ago

From the CEO of Square who access to real world data at scale: Hyperinflation is going to change everything. It’s happening. https://twitter.com/jack/status/1451733913961783299 https://twitter.com/jack/status/1451733913961783299

boc 5y ago
Jack is a crypto maximalist who is trying to sound the alarm over a very, very unlikely outcome. He's biased.
mullingitover 5y ago
CEO of Square, but also kind of a crank who's long on crypto, so he has a vested interest in convincing people to YOLO their savings into crypto so he can cash in. I take his statements with several blocks of salt.
- Sammi 5y ago
  Just wow. So he's just a crank because he likes Bitcoin now? How easily you just brushed off the successful startup ceo of not one, but two huge tech startups (Twitter, Square). What do you think it takes to be able to do what he did? Oh no, he's just a crank because he likes Bitcoin now, let's just brush off everything he says from now on. It's not like he's someone who's actually proven himself capable and as someone worth listening to.
  - throwawaygh 5y ago
    > So he's just a crank because he likes Bitcoin now? Read it as "he's a crank and also likes bitcoin". Anyways. There's undeniably a massive PR campaign right now to get retail investors into crypto. Fucking football players and media personalities are taking paychecks in bitcoin and posting PR-drafted tweets about it. Even if I were still long crypto, I'd be sitting the next few months out. Way too reminiscent of dotcom -- folks who know nothing about finance, investing, or crypto are "investing" in highly volatile speculative vehicles. This only ends one way.