8 ms·

Inflation surges to its highest since 1990

62 points by kull 5y ago

yeslibertarian 5y ago
All those deficits and free-money have effects, you know. But don't worry, they would solve it printing more money. Inflation is high not even considering that the FED under-reports inflation with all their tricks - if inflation was calculated as it was in times of Margaret Thatcher, the number wouldn't be 6%, but more like 15%. See http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts Welcome to Argentina-like politics. Oh, dear Argentina: a country that had the highest GDP per capita some 100 years ago.
jstx1 5y ago
It's helpful to have a look at the graph in the article and to remind yourself that the numbers are reported year-on-year. Inflation spiked up in the first half of 2021 and the comparison is between the current month and the same month last year so prices could stay the same and you would still report high inflation for a while (until the back end of the comparison window catches up to the moment in time when inflation went up). I think it's important to clear this up because people say things like "high inflation of over 5-6% for months now" which is kind of misleading. Prices can go up 6% just once and then stay the same and you'll still report 6% inflation every month throughout the following year. This isn't to say that things are great and high inflation isn't happening. The month-to-month increase is 0.9% which is very high (see the graph).
- jacquesm 5y ago
  Also note that due to the compound nature of inflation 2% or 4% is an entirely different ball game in the longer term.
- pfortuny 5y ago
  Totally right in your assessment. But notice that, following your indication, monthly increase is a steady >0.2% and mostly >0.4% since May 2020, way above average. So, yes: high inflation has been going on for at least a year.
vbg 5y ago
Inflation is complete bullshit because it’s careful to measure a subset of prices and exclude a large range of other prices. Meaningless crap, designed to support government narrative that everything is great, nothing to see here. To have any credibility at all, inflation MUST include rent/mortgage payments and house prices.
- edmcnulty101 5y ago
  Doesn't the CPI include housing? (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services) Question 10. https://www.bls.gov/cpi/questions-and-answers.htm https://www.bls.gov/cpi/questions-and-answers.htm
  - d_t_w 5y ago
    I'm not quite sure what 'housing' means in that quote because CPI specifically excludes most housing costs. RPI takes into account housing costs such as mortgage interest payments, building insurance etc. I'm not sure what USA measure, but the UK shifted to CPI in 2003 to harmonise with EU. So no, UK/EU/CPI inflation measures basically don't include housing related costs. Certainly not the price of houses, which might be the thrust of OPs point.
    - edmcnulty101 5y ago
      I have no clue haha. I mean if it DOESN'T include housing doesn't that just mean that since housing costs are skyrocketing that this reported number is actually a lowball for inflation?
  - Steko 5y ago
    The Consumer Price Index (CPI), for example, measures the prices of a basket of household goods and services that households regularly consume, with weights assigned to each item in the basket based on their average shares of total expenditures. Among these is a shelter component that includes both rental costs and the consumption value of owner-occupied housing, in addition to other forms of lodging such as hotels. Shelter makes up nearly a third of the basket for CPI inflation, and 40 percent of the basket for core CPI that excludes the volatile food and energy components. https://www.whitehouse.gov/cea/blog/2021/09/09/housing-prices-and-inflation/ https://www.whitehouse.gov/cea/blog/2021/09/09/housing-price... You can bet every HN thread about inflation will be full of bad info from cranks.
ur-whale 5y ago
Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.
- jstx1 5y ago
  Taxation is deliberate and easily measured. Inflation is much more difficult to measure and it results from many parts of a complex system interacting with each other. The only thing in common is that people end up with less money.
  - edmcnulty101 5y ago
    Poor people and the middle class who deal in cash day to day to pay bills, seem to end up with less money. The rich seem to be asset heavy so are buffeted against inflation.
    - noduerme 5y ago
      This is a foreign concept, but Americans have caught on just fine: When the currency is inflating, people buy hard physical goods or whatever they can get their hands on now before the price goes up. Cars, white goods, remodels, houses, jewelry. It's funny to watch the whole universe of punditry wring its hands over the supply chain crisis when in fact what we're seeing is Americans attempting to cash out of the dollar (wittingly or by brute instinct), and China narrowing the umbilical by which those dollars can be redeemed for goods.
      - edmcnulty101 5y ago
        > in fact what we're seeing is Americans attempting to cash out of the dollar Interesting! Did not look at it like that. I've had that subconscious instinct as well to purchase important things I need now because tomorrow feels so unstable.
foota 5y ago
Were bad things happening in 1990? Iirc it was the start of one of the most prosperous periods in recent American history.
- fauigerzigerk 5y ago
  The 1990 oil price shock occurred in response to the Iraqi invasion of Kuwait on August 2, 1990 https://en.wikipedia.org/wiki/1990_oil_price_shock https://en.wikipedia.org/wiki/1990_oil_price_shock
- deleted 5y ago
  [deleted]
- m4rtink 5y ago
  Soviet block and its client states disintegrating.
- piva00 5y ago
  USSR disintegrating after 91 and the opening up of markets around the world from the wave of neoliberalism helped a fucking lot, movements such as Latin America slowly dropping its market-protection practices, former Soviet states adopting free market ideologies and so on created quite a high demand, it was the start of globalisation as we are used to nowadays. Most of the most prosperous periods in American history are following large shifts in the world order, WW1 and 2, collapse of the USSR, starting the Age of Information, etc.
deleted 5y ago
[deleted]
merricksb 5y ago
Already discussed in the past 24 hours: https://news.ycombinator.com/item?id=29175110 https://news.ycombinator.com/item?id=29175110 https://news.ycombinator.com/item?id=29174804 https://news.ycombinator.com/item?id=29174804 https://news.ycombinator.com/item?id=29182768 https://news.ycombinator.com/item?id=29182768
- deleted 5y ago
  [deleted]

62 points by kull 5y ago

All those deficits and free-money have effects, you know. But don't worry, they would solve it printing more money. Inflation is high not even considering that the FED under-reports inflation with all their tricks - if inflation was calculated as it was in times of Margaret Thatcher, the number wouldn't be 6%, but more like 15%. See http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts Welcome to Argentina-like politics. Oh, dear Argentina: a country that had the highest GDP per capita some 100 years ago.

jstx1 5y ago

It's helpful to have a look at the graph in the article and to remind yourself that the numbers are reported year-on-year. Inflation spiked up in the first half of 2021 and the comparison is between the current month and the same month last year so prices could stay the same and you would still report high inflation for a while (until the back end of the comparison window catches up to the moment in time when inflation went up). I think it's important to clear this up because people say things like "high inflation of over 5-6% for months now" which is kind of misleading. Prices can go up 6% just once and then stay the same and you'll still report 6% inflation every month throughout the following year. This isn't to say that things are great and high inflation isn't happening. The month-to-month increase is 0.9% which is very high (see the graph).

jacquesm 5y ago
Also note that due to the compound nature of inflation 2% or 4% is an entirely different ball game in the longer term.
pfortuny 5y ago
Totally right in your assessment. But notice that, following your indication, monthly increase is a steady >0.2% and mostly >0.4% since May 2020, way above average. So, yes: high inflation has been going on for at least a year.

vbg 5y ago

Inflation is complete bullshit because it’s careful to measure a subset of prices and exclude a large range of other prices. Meaningless crap, designed to support government narrative that everything is great, nothing to see here. To have any credibility at all, inflation MUST include rent/mortgage payments and house prices.

edmcnulty101 5y ago
Doesn't the CPI include housing? (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services) Question 10. https://www.bls.gov/cpi/questions-and-answers.htm https://www.bls.gov/cpi/questions-and-answers.htm
- d_t_w 5y ago
  I'm not quite sure what 'housing' means in that quote because CPI specifically excludes most housing costs. RPI takes into account housing costs such as mortgage interest payments, building insurance etc. I'm not sure what USA measure, but the UK shifted to CPI in 2003 to harmonise with EU. So no, UK/EU/CPI inflation measures basically don't include housing related costs. Certainly not the price of houses, which might be the thrust of OPs point.
  - edmcnulty101 5y ago
    I have no clue haha. I mean if it DOESN'T include housing doesn't that just mean that since housing costs are skyrocketing that this reported number is actually a lowball for inflation?
- Steko 5y ago
  The Consumer Price Index (CPI), for example, measures the prices of a basket of household goods and services that households regularly consume, with weights assigned to each item in the basket based on their average shares of total expenditures. Among these is a shelter component that includes both rental costs and the consumption value of owner-occupied housing, in addition to other forms of lodging such as hotels. Shelter makes up nearly a third of the basket for CPI inflation, and 40 percent of the basket for core CPI that excludes the volatile food and energy components. https://www.whitehouse.gov/cea/blog/2021/09/09/housing-prices-and-inflation/ https://www.whitehouse.gov/cea/blog/2021/09/09/housing-price... You can bet every HN thread about inflation will be full of bad info from cranks.

ur-whale 5y ago

Inflation is boiled frog style taxation. Unfortunately, it's taxation that makes the weakest suffer the most. Oh, and the govt would like you to believe they have a way to control it. Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen. Let's see how that empty promise actually turns out.

jstx1 5y ago
Taxation is deliberate and easily measured. Inflation is much more difficult to measure and it results from many parts of a complex system interacting with each other. The only thing in common is that people end up with less money.
- edmcnulty101 5y ago
  Poor people and the middle class who deal in cash day to day to pay bills, seem to end up with less money. The rich seem to be asset heavy so are buffeted against inflation.
  - noduerme 5y ago
    This is a foreign concept, but Americans have caught on just fine: When the currency is inflating, people buy hard physical goods or whatever they can get their hands on now before the price goes up. Cars, white goods, remodels, houses, jewelry. It's funny to watch the whole universe of punditry wring its hands over the supply chain crisis when in fact what we're seeing is Americans attempting to cash out of the dollar (wittingly or by brute instinct), and China narrowing the umbilical by which those dollars can be redeemed for goods.
    - edmcnulty101 5y ago
      > in fact what we're seeing is Americans attempting to cash out of the dollar Interesting! Did not look at it like that. I've had that subconscious instinct as well to purchase important things I need now because tomorrow feels so unstable.

foota 5y ago

Were bad things happening in 1990? Iirc it was the start of one of the most prosperous periods in recent American history.

fauigerzigerk 5y ago
The 1990 oil price shock occurred in response to the Iraqi invasion of Kuwait on August 2, 1990 https://en.wikipedia.org/wiki/1990_oil_price_shock https://en.wikipedia.org/wiki/1990_oil_price_shock
deleted 5y ago
[deleted]
m4rtink 5y ago
Soviet block and its client states disintegrating.
piva00 5y ago
USSR disintegrating after 91 and the opening up of markets around the world from the wave of neoliberalism helped a fucking lot, movements such as Latin America slowly dropping its market-protection practices, former Soviet states adopting free market ideologies and so on created quite a high demand, it was the start of globalisation as we are used to nowadays. Most of the most prosperous periods in American history are following large shifts in the world order, WW1 and 2, collapse of the USSR, starting the Age of Information, etc.

deleted 5y ago

[deleted]

merricksb 5y ago

Already discussed in the past 24 hours: https://news.ycombinator.com/item?id=29175110 https://news.ycombinator.com/item?id=29175110 https://news.ycombinator.com/item?id=29174804 https://news.ycombinator.com/item?id=29174804 https://news.ycombinator.com/item?id=29182768 https://news.ycombinator.com/item?id=29182768

deleted 5y ago
[deleted]