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This shows why some things must start grass root. A move from the top would trigger all kinds of political people. Let's enjoy the 10% inflation! (Of course,

This shows why some things must start grass root. A move from the top would trigger all kinds of political people. Let's enjoy the 10% inflation! (Of course, most currencies debased in lockstep this pandemic, so a basket of currencies would have been equally bad. But it would have been a good indicator!)

acdha 5y ago
Inflation doesn’t always have the same cause. If you look past the clickbait, the inflation we’re seeing is dominated by just 3 sectors (cars, oil, meat) and it has nothing to do with monetary policy but rather things like the pandemic you may recall is raging at record highs.
- BuyMyBitcoins 5y ago
  Anecdotes aren’t supposed to be evidence, but just about everything is starting to cost more. While I don’t have the wherewithal to create my own inflation index, I suspect the CPI is a victim of Cunningham’s Law and the “true” amount of inflation is substantially higher than it lets on. I’m also in disbelief whenever pundits try to reassure me inflation isn’t that bad because it is either “transitory” or due to pandemic supply issues.
  - acdha 5y ago
    Yes, that’s the danger of relying on anecdotes. You see that price go up and it’s easy to react emotionally and think it’ll be like that forever, but you probably won’t have anywhere near as strong a reaction when prices recover as they have in many cases over the last year. When professionals study this and release their analysis of the causes, it doesn’t have the same impact as that sticker shock did, either, because it's generally dry material. Here’s a non-anecdotal source: https://theovershoot.co/p/understanding-covid-flation https://theovershoot.co/p/understanding-covid-flation
    - xunn0026 5y ago
      So monetary policy does everything except cause inflation? The article is paid. But I see it excludes energy which is pretty relevant, especially during winter.
      - acdha 5y ago
        > So monetary policy does everything except cause inflation? No, inflation can have more than one causes. That's why care is needed to identify which factors contributed to a particular incident, just as you might have a different solution to a headache based on whether, say, you also have symptoms of a cold or were drinking heavily the night before.
        xunn0026 5y ago
        But how odd when after a night of heavily drinking it turns out to be a cold?
    - BuyMyBitcoins 5y ago
      I don’t foresee prices recovering in a significant way. My apartment complex wanted an additional $300/mo rent for a yearly renewal and no matter how strong of a recovery there may be on the horizon, I sense higher prices are mostly here to stay. From a business standpoint, a perception of high inflation is the perfect cover for raising prices, especially if it seems like everyone else is doing it. Plus, assuming costs do go down again, you can pocket the difference rather than lowering prices just to need to raise them again for inflation later.
      - acdha 5y ago
        I think it's more complicated than that because that trend has been going on for a long time with no connection to inflation or even supply chain snafus. Fixing it is going to require changing a thorny mess of policies constricting adequate housing construction, density, redevelopment, etc. and private investors piling into housing as a revenue stream. Housing really looks a lot like what you'd expect where there simply isn't enough supply for market forces to keep prices in check.
- fleddr 5y ago
  Nice. I'll then try to work around the problem by only buying things that don't rely on oil.
- scottiebarnes 5y ago
  Have a look at housing prices and stock prices
  - acdha 5y ago
    Stocks are not something people need to buy. Housing is, but again, there are multiple factors driving those prices up. This is coming up in the context of a cryptocurrency so there's clearly a financial conflict of interest causing people who hold cryptocurrencies to attribute the problem to monetary policy with the solution being to buy their tokens but that ignores the other factors like changes in demand due to the pandemic, well-known problems related to supply issues & zoning running back decades, increased competition from investment funds buying properties, changes in consumer buying habits, etc.
    - scottiebarnes 5y ago
      Stocks is where people park their money when bonds yield nothing and future expected value of money is decreasing. When the fed keeps a near zero interest rate, people have lower monthly mortgage payments, and can thus take on more debt. When they have the ability to take on more debt, they can bid higher on housing prices. When the fed injects trillions of dollars into the economy in the form of stimulus and quantitative easing, there is a surplus of money that makes it way throughout the economy, and this attributes to inflation. It's called a debt crisis leading to hyperinflation and economic collapse. It may not be happening now, and maybe not even in our lifetime, but it is inevitable based on the current model of monetary policy. And when the USD/US economy collapses, it will be the biggest one in history.
      - acdha 5y ago
        I am familiar with the cryptocurrency marketing pitch but remember that people are trying to use fear to sell tokens. It’s never good to get advice from someone with that large a conflict of interest. We’re nowhere near what economists consider hyperinflation and the 7% we’re seeing is more convincingly explained by the well-known issues caused by a global pandemic which will not run forever.

acdha 5y ago

Inflation doesn’t always have the same cause. If you look past the clickbait, the inflation we’re seeing is dominated by just 3 sectors (cars, oil, meat) and it has nothing to do with monetary policy but rather things like the pandemic you may recall is raging at record highs.

BuyMyBitcoins 5y ago
Anecdotes aren’t supposed to be evidence, but just about everything is starting to cost more. While I don’t have the wherewithal to create my own inflation index, I suspect the CPI is a victim of Cunningham’s Law and the “true” amount of inflation is substantially higher than it lets on. I’m also in disbelief whenever pundits try to reassure me inflation isn’t that bad because it is either “transitory” or due to pandemic supply issues.
- acdha 5y ago
  Yes, that’s the danger of relying on anecdotes. You see that price go up and it’s easy to react emotionally and think it’ll be like that forever, but you probably won’t have anywhere near as strong a reaction when prices recover as they have in many cases over the last year. When professionals study this and release their analysis of the causes, it doesn’t have the same impact as that sticker shock did, either, because it's generally dry material. Here’s a non-anecdotal source: https://theovershoot.co/p/understanding-covid-flation https://theovershoot.co/p/understanding-covid-flation
  - xunn0026 5y ago
    So monetary policy does everything except cause inflation? The article is paid. But I see it excludes energy which is pretty relevant, especially during winter.
    - acdha 5y ago
      > So monetary policy does everything except cause inflation? No, inflation can have more than one causes. That's why care is needed to identify which factors contributed to a particular incident, just as you might have a different solution to a headache based on whether, say, you also have symptoms of a cold or were drinking heavily the night before.
      - xunn0026 5y ago
        But how odd when after a night of heavily drinking it turns out to be a cold?
  - BuyMyBitcoins 5y ago
    I don’t foresee prices recovering in a significant way. My apartment complex wanted an additional $300/mo rent for a yearly renewal and no matter how strong of a recovery there may be on the horizon, I sense higher prices are mostly here to stay. From a business standpoint, a perception of high inflation is the perfect cover for raising prices, especially if it seems like everyone else is doing it. Plus, assuming costs do go down again, you can pocket the difference rather than lowering prices just to need to raise them again for inflation later.
    - acdha 5y ago
      I think it's more complicated than that because that trend has been going on for a long time with no connection to inflation or even supply chain snafus. Fixing it is going to require changing a thorny mess of policies constricting adequate housing construction, density, redevelopment, etc. and private investors piling into housing as a revenue stream. Housing really looks a lot like what you'd expect where there simply isn't enough supply for market forces to keep prices in check.
fleddr 5y ago
Nice. I'll then try to work around the problem by only buying things that don't rely on oil.
scottiebarnes 5y ago
Have a look at housing prices and stock prices
- acdha 5y ago
  Stocks are not something people need to buy. Housing is, but again, there are multiple factors driving those prices up. This is coming up in the context of a cryptocurrency so there's clearly a financial conflict of interest causing people who hold cryptocurrencies to attribute the problem to monetary policy with the solution being to buy their tokens but that ignores the other factors like changes in demand due to the pandemic, well-known problems related to supply issues & zoning running back decades, increased competition from investment funds buying properties, changes in consumer buying habits, etc.
  - scottiebarnes 5y ago
    Stocks is where people park their money when bonds yield nothing and future expected value of money is decreasing. When the fed keeps a near zero interest rate, people have lower monthly mortgage payments, and can thus take on more debt. When they have the ability to take on more debt, they can bid higher on housing prices. When the fed injects trillions of dollars into the economy in the form of stimulus and quantitative easing, there is a surplus of money that makes it way throughout the economy, and this attributes to inflation. It's called a debt crisis leading to hyperinflation and economic collapse. It may not be happening now, and maybe not even in our lifetime, but it is inevitable based on the current model of monetary policy. And when the USD/US economy collapses, it will be the biggest one in history.
    - acdha 5y ago
      I am familiar with the cryptocurrency marketing pitch but remember that people are trying to use fear to sell tokens. It’s never good to get advice from someone with that large a conflict of interest. We’re nowhere near what economists consider hyperinflation and the 7% we’re seeing is more convincingly explained by the well-known issues caused by a global pandemic which will not run forever.