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Yes, and no. If you are paying for a $400k house in 2005 dollars with a 2021 salary the inflation is all good (bring it on). All the squawking about inflation i

Yes, and no. If you are paying for a $400k house in 2005 dollars with a 2021 salary the inflation is all good (bring it on). All the squawking about inflation is annoying and often wrong (gentle inflation like we are seeing is good for the common person). If you are sitting on piles of cash from yesteryear you become less wealthy--not counting gains from interest income or stock price appreciation. Who doesn't like inflation? I love it when the market makes my existing debt cheaper.

deathanatos 5y ago
> Who doesn't like inflation? I love it when the market makes my existing debt cheaper. Those of us who want to purchase? …And understand that the housing market cannot outpace inflation indefinitely, and are queasy about what will happen when that day comes: do home prices eventually level off at some absurd level, or do interest rates rise, demand slackens, prices level off & then speculators jump ship for more lucrative investments and then prices crater, putting people underwater on their mortgage?
mlac 5y ago
Here are a few people who don’t like inflation: - People who aren’t leveraged with a lot of debt. - People who are seeing wage stagnation while the cost of living goes up. The majority of jobs that keep the economy running aren’t like the tech sector where one can job hop to keep wages up. - People who have a significant chunk of their savings in cash for a down payment, and they are seeing property values run away from them while the value of their money goes down. They are also seeing increasing costs, impacting their ability to save for a down payment. - The people who are trying to buy a house that was $400k in 2005, that is now valued at 1.2M and requires $240k for a down payment.
- PaulDavisThe1st 5y ago
  > People who have a significant chunk of their savings in cash for a down payment, and they are seeing property values run away from them while the value of their money goes down. This is a very important issue, but it's not really inflation in any normal sense.
  - cwkoss 5y ago
    Why is that 'not really inflation'?
    - PaulDavisThe1st 5y ago
      1) Housing costs are not part of a lot of measures of inflation. 2) Rental housing costs and owner-occupied housing costs are correlated but have a complex non-linear, non-monotonic relationship 3) Housing costs vary in absolute terms by substantial ratios in different areas 4) Housing costs vary in relative (CoL) terms in different areas 5) Changes in housing costs over a given time period can vary dramatically in different areas.
ivalm 5y ago
I am not saying inflation is bad. However we should separate decreased real cost of debt with employer provided wages. If prices on goods and services are increasing that extra money should proportionally drive wages. When people complain about how single income for blue collar employees no longer can support a family like in the times of yore it is exactly because the wages in these sectors didn’t keep up with inflation. As an aside, in terms of home ownership, Seattle housing prices are up 20% in 2021 (more than CPI) [0]. For many tech workers (skew younger) saving for housing is a significant cost and for them the effective increase in cost may be significantly more that CPI (thus their real wage cut is even greater!). [0] https://fred.stlouisfed.org/series/ATNHPIUS42644Q https://fred.stlouisfed.org/series/ATNHPIUS42644Q
david422 5y ago
It seems like it punishes those that are saving for the future. Like, why plan ahead when you can just go into huge amounts of debt. Seems pretty short sighted and yet these decisions are the ones that are rewarded.
- datavirtue 5y ago
  That is how everything is setup. We use debt for everything. "Saving" is only a savings if the saved money is growing (invested). If you put it under a mattress inflation always eats it. Hoarding money is always punished/disincentivized by any modern government. They want you under pressure to invest or spend.

deathanatos 5y ago

> Who doesn't like inflation? I love it when the market makes my existing debt cheaper. Those of us who want to purchase? …And understand that the housing market cannot outpace inflation indefinitely, and are queasy about what will happen when that day comes: do home prices eventually level off at some absurd level, or do interest rates rise, demand slackens, prices level off & then speculators jump ship for more lucrative investments and then prices crater, putting people underwater on their mortgage?

mlac 5y ago

Here are a few people who don’t like inflation: - People who aren’t leveraged with a lot of debt. - People who are seeing wage stagnation while the cost of living goes up. The majority of jobs that keep the economy running aren’t like the tech sector where one can job hop to keep wages up. - People who have a significant chunk of their savings in cash for a down payment, and they are seeing property values run away from them while the value of their money goes down. They are also seeing increasing costs, impacting their ability to save for a down payment. - The people who are trying to buy a house that was $400k in 2005, that is now valued at 1.2M and requires $240k for a down payment.

PaulDavisThe1st 5y ago
> People who have a significant chunk of their savings in cash for a down payment, and they are seeing property values run away from them while the value of their money goes down. This is a very important issue, but it's not really inflation in any normal sense.
- cwkoss 5y ago
  Why is that 'not really inflation'?
  - PaulDavisThe1st 5y ago
    1) Housing costs are not part of a lot of measures of inflation. 2) Rental housing costs and owner-occupied housing costs are correlated but have a complex non-linear, non-monotonic relationship 3) Housing costs vary in absolute terms by substantial ratios in different areas 4) Housing costs vary in relative (CoL) terms in different areas 5) Changes in housing costs over a given time period can vary dramatically in different areas.

ivalm 5y ago

I am not saying inflation is bad. However we should separate decreased real cost of debt with employer provided wages. If prices on goods and services are increasing that extra money should proportionally drive wages. When people complain about how single income for blue collar employees no longer can support a family like in the times of yore it is exactly because the wages in these sectors didn’t keep up with inflation. As an aside, in terms of home ownership, Seattle housing prices are up 20% in 2021 (more than CPI) [0]. For many tech workers (skew younger) saving for housing is a significant cost and for them the effective increase in cost may be significantly more that CPI (thus their real wage cut is even greater!). [0] https://fred.stlouisfed.org/series/ATNHPIUS42644Q https://fred.stlouisfed.org/series/ATNHPIUS42644Q

david422 5y ago

It seems like it punishes those that are saving for the future. Like, why plan ahead when you can just go into huge amounts of debt. Seems pretty short sighted and yet these decisions are the ones that are rewarded.

datavirtue 5y ago
That is how everything is setup. We use debt for everything. "Saving" is only a savings if the saved money is growing (invested). If you put it under a mattress inflation always eats it. Hoarding money is always punished/disincentivized by any modern government. They want you under pressure to invest or spend.