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"If the real value" The word "real" has no meaning in this sentence unless you've first developed a concept of consumer inflation that is separate from asset v

"If the real value" The word "real" has no meaning in this sentence unless you've first developed a concept of consumer inflation that is separate from asset values increasing. If you say that asset "inflation" should be a component of the consumer inflation that the government measures, and therefore consumer inflation includes the increase in the value of homes, then the word "real" has no meaning. You cannot say "Houses went up 5% but inflation also went up 5%" if the 5% increase in homes is already counted in the 5% inflation. You are mushing these concepts together and creating a conceptual mess.

notch656a 5y ago
>If you say that asset [price] "inflation" should be a component of the consumer inflation First of all I never said that, because by definition they are two separate things. Asset price inflation refers to a fixed quantity of currency buying less and less real assets. Consumer inflation refers to a fixed quantity of currency buying less and less of the basket of consumer goods and services. You keep confusing yourself by sometimes mushing the concepts inflation, asset price inflation, and consumer inflation and then getting upset when one doesn't fit neatly into the other. You are mushing these concepts together and creating a conceptual mess. You can play this disingenuous game all day where you mix the 3 concepts around, and yet at the end of the day asset price inflation will still be real.
- lkrubner 5y ago
  "buying less and less real assets" What is a real asset? If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. If by "real" you mean "an object with a clear category and a clear value" then I'm curious how you would derive the clear category and the clear value? If one person says "I hate that house, I would only pay $300k for it" and another person says of the same house "I love that house, I would pay $600k for it" then who is correct? If you want to have a sane conversation about this, I would suggest that you stop using the word "real." Use "inflation adjusted" if you mean that, and then use "actual" or "countable" when you mean those things. About this: "You keep confusing yourself by sometimes mushing the concepts inflation, asset price inflation, and consumer inflation and then getting upset when one doesn't fit neatly into the other." I am not upset with you, nor did I say anything to suggest that I was upset with you. I'm simply pointing out that you don't seem to understand the words that you are using. Also, I've avoided bringing politics into this, but it might be worth thinking of some of the notorious incidents of hyper-inflation, the political effects it had, and how such effects are simply not rational or possible or connected to increasing nominal prices for assets. I wrote about the late Soviet era hyper-inflation here: https://demodexio.substack.com/p/the-struggle-to-save-the-soviet-economy-167 https://demodexio.substack.com/p/the-struggle-to-save-the-so...
  - notch656a 5y ago
    There are different classes of assets but when I refer to real asset inflation it refers to real assets. I use real assets here since we are talking about houses. So to your question: > If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. If by "real" you mean "an object with a clear category and a clear value" then I'm curious how you would derive the clear category and the clear value? I don't precisely mean either in regards to "real assets", see below. >What is a real asset? "Real assets are physical or tangible assets, such as infrastructure, real estate, natural resources and precious metals, whose value is based on their physical properties or utility." [0][1][2] If I said "actual" or "countable" assets it would most definitely not have the same meaning. IOUs friend bill or a dollar bill are both actual and countable assets but not real assets. >I would suggest that you stop using the word "real." OK but to do so I'm going to need to see lkrubner's personal dictionary, since we are dispensing with the terms used in the financial industry. >I hate that house, I would only pay $300k for it" and another person says of the same house "I love that house, I would pay $600k for it" then who is correct? You can argue who is correct but when a house is for sale the title is generally transferred to the highest bidder, all else equal. It really doesn't mean dick if I walk up to a house for sale and tell the owner I think it's worth $1000 bucks, nor does it mean anything if I think it's worth $1M and never pony up the money. When on a macro level we see the executed transaction for similar houses trend towards a price, it's safe to say the market roughly values houses similar to that house near that price. >If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. Today I own one drill press as a capital for my manufacturing business. Tomorrow the .gov prints 1 quadrillion dollars. Tomorrow drill presses aren't any harder to come by nor harder to make nor any more or less useful for industry or for me or anyone else. The price inflation still rises. You can single, double, or triple or even fractionally count your idea of inflation in whatever made-up definition soup you want to conjure up, but the price inflation from more magic dollars entering circulation will still be there. >https://demodexio.substack.com/p/the-struggle-to-save-the-so https://demodexio.substack.com/p/the-struggle-to-save-the-so... Interesting read. My take based on your writing is we should remove the money supply from the government, and instead decentralize as best we can to minimize the bad acts of a few actors. Widespread adoption of commodity money and privately issued notes (both fiat and asset backed) are a couple ways to reduce the influence of a single powerful government from having full control of the money supply. [0] https://en.wikipedia.org/wiki/Real_assets https://en.wikipedia.org/wiki/Real_assets [1] https://www.dws.com/en-us/strategies/asset-classes/real-assets/ https://www.dws.com/en-us/strategies/asset-classes/real-asse... [2] https://www.investopedia.com/terms/r/realasset.asp#:~:text=Real%20assets%20are%20physical%20assets,%2C%20equipment%2C%20and%20natural%20resources https://www.investopedia.com/terms/r/realasset.asp#:~:text=R....

notch656a 5y ago

>If you say that asset [price] "inflation" should be a component of the consumer inflation First of all I never said that, because by definition they are two separate things. Asset price inflation refers to a fixed quantity of currency buying less and less real assets. Consumer inflation refers to a fixed quantity of currency buying less and less of the basket of consumer goods and services. You keep confusing yourself by sometimes mushing the concepts inflation, asset price inflation, and consumer inflation and then getting upset when one doesn't fit neatly into the other. You are mushing these concepts together and creating a conceptual mess. You can play this disingenuous game all day where you mix the 3 concepts around, and yet at the end of the day asset price inflation will still be real.

lkrubner 5y ago
"buying less and less real assets" What is a real asset? If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. If by "real" you mean "an object with a clear category and a clear value" then I'm curious how you would derive the clear category and the clear value? If one person says "I hate that house, I would only pay $300k for it" and another person says of the same house "I love that house, I would pay $600k for it" then who is correct? If you want to have a sane conversation about this, I would suggest that you stop using the word "real." Use "inflation adjusted" if you mean that, and then use "actual" or "countable" when you mean those things. About this: "You keep confusing yourself by sometimes mushing the concepts inflation, asset price inflation, and consumer inflation and then getting upset when one doesn't fit neatly into the other." I am not upset with you, nor did I say anything to suggest that I was upset with you. I'm simply pointing out that you don't seem to understand the words that you are using. Also, I've avoided bringing politics into this, but it might be worth thinking of some of the notorious incidents of hyper-inflation, the political effects it had, and how such effects are simply not rational or possible or connected to increasing nominal prices for assets. I wrote about the late Soviet era hyper-inflation here: https://demodexio.substack.com/p/the-struggle-to-save-the-soviet-economy-167 https://demodexio.substack.com/p/the-struggle-to-save-the-so...
- notch656a 5y ago
  There are different classes of assets but when I refer to real asset inflation it refers to real assets. I use real assets here since we are talking about houses. So to your question: > If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. If by "real" you mean "an object with a clear category and a clear value" then I'm curious how you would derive the clear category and the clear value? I don't precisely mean either in regards to "real assets", see below. >What is a real asset? "Real assets are physical or tangible assets, such as infrastructure, real estate, natural resources and precious metals, whose value is based on their physical properties or utility." [0][1][2] If I said "actual" or "countable" assets it would most definitely not have the same meaning. IOUs friend bill or a dollar bill are both actual and countable assets but not real assets. >I would suggest that you stop using the word "real." OK but to do so I'm going to need to see lkrubner's personal dictionary, since we are dispensing with the terms used in the financial industry. >I hate that house, I would only pay $300k for it" and another person says of the same house "I love that house, I would pay $600k for it" then who is correct? You can argue who is correct but when a house is for sale the title is generally transferred to the highest bidder, all else equal. It really doesn't mean dick if I walk up to a house for sale and tell the owner I think it's worth $1000 bucks, nor does it mean anything if I think it's worth $1M and never pony up the money. When on a macro level we see the executed transaction for similar houses trend towards a price, it's safe to say the market roughly values houses similar to that house near that price. >If by "real" you mean "adjusted for inflation" then, again, you are double counting the inflation. Today I own one drill press as a capital for my manufacturing business. Tomorrow the .gov prints 1 quadrillion dollars. Tomorrow drill presses aren't any harder to come by nor harder to make nor any more or less useful for industry or for me or anyone else. The price inflation still rises. You can single, double, or triple or even fractionally count your idea of inflation in whatever made-up definition soup you want to conjure up, but the price inflation from more magic dollars entering circulation will still be there. >https://demodexio.substack.com/p/the-struggle-to-save-the-so https://demodexio.substack.com/p/the-struggle-to-save-the-so... Interesting read. My take based on your writing is we should remove the money supply from the government, and instead decentralize as best we can to minimize the bad acts of a few actors. Widespread adoption of commodity money and privately issued notes (both fiat and asset backed) are a couple ways to reduce the influence of a single powerful government from having full control of the money supply. [0] https://en.wikipedia.org/wiki/Real_assets https://en.wikipedia.org/wiki/Real_assets [1] https://www.dws.com/en-us/strategies/asset-classes/real-assets/ https://www.dws.com/en-us/strategies/asset-classes/real-asse... [2] https://www.investopedia.com/terms/r/realasset.asp#:~:text=Real%20assets%20are%20physical%20assets,%2C%20equipment%2C%20and%20natural%20resources https://www.investopedia.com/terms/r/realasset.asp#:~:text=R....