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USD is not down. The dxy index has been going up all year. Inflation is a global phenomenon.

zaroth 4y ago
Comparing one pile of festering garbage against another and saying one smells better… you’re still standing in a pile of trash.
- deleted 4y ago
  [deleted]
nightski 4y ago
This inflation report directly contradicts your statement. It's clearly down quite a bit in purchasing power of assets, goods, and services.
- cannonpalms 4y ago
  This is not what is meant by the phrase, "X currency is down." A decrease in purchasing power of a currency is known as "inflation."
  - zaroth 4y ago
    Sorry if I’m using the wrong vernacular. The reason why market prices look so high is because it’s priced in US dollars, and US dollars aren’t worth what they used to be. The reason why markets go up when the Fed seems completely unconcerned or helpless to stop the worst inflation in decades, is because people are betting that this trend will continue. If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture.
    - mpalczewski 4y ago
      > If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture. If you price the dollar in terms of ounces of gold, then you would think that the dollar is worth more than it was in September of 2011, and you would think that the dollar is worth more now than it was in August of 2020. While gold is stable over the long term e.g. centuries, its price can be quite erratic over the short term. You can price it in barrels of oil, silver, copper, a collection of other currencies, bitcoin, median house price and get a different answer each time. > The reason why markets go up when the Fed seems completely unconcerned or helpless to stop the worst inflation in decades, is because people are betting that this trend will continue. It's a global phenomenon. We've got less production of goods and commodities because of covid and just as much if not more demand. So supply down, demand even or even up. What do you expect to happen? While the USD has problems, other currencies seem even worse at the moment. There is not some other fiat currency at the moment that is better than the USD. Things that people think are hedges BTC(Ponzi scheme), Gold(volatile) don't always work well. e.g. here is real(inflation adjusted) gold prices. https://blogger.googleusercontent.com/img/a/AVvXsEiyWSImAdvNFecozQ_q07f_Llg2m-h16DEKGQr_NurjY3NsCwIR1R2OI8_RA00NkeT4COe6IE-9xCzI2TALE7SF6SDV_B8CRvv8oyrIq_vJaUtCMjNNDiri7KTTkgTRvBTBjCyMykUw_-U5q45GUQv8VVfAaRgIABkF9p-i2oIsyy9m6OzBl_CDRQ2L=s2445 https://blogger.googleusercontent.com/img/a/AVvXsEiyWSImAdvN... it doesn't look all that cheap at the moment. > If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture. Like this? https://schrts.co/pAKzMCFc https://schrts.co/pAKzMCFc
      - zaroth 4y ago
        “Real price of gold” is an interesting concept, probably showing a statistical quirk of backtracing CPI than anything useful though? I’d have to study how it was calculated. Yes, your graph at the end showing SPY in gold falling below the 200 day MA is exactly what I was talking about. I absolutely agree gold is volatile in the short term and not some magical replacement for fiat currency nor an absolute indicator of the level of inflation in an economy. Sometimes however it’s important to figure out if the “platform” you’re taking your measurement from isn’t actually what’s moving, rather than the thing you’re trying to measure. If you’re going to step outside of the fiat viewpoint, gold is where I’d usually start. Maybe a VIX-adjusted price of gold or something like that could be useful to smooth it out.

Comparing one pile of festering garbage against another and saying one smells better… you’re still standing in a pile of trash.

deleted 4y ago
[deleted]

nightski 4y ago

This inflation report directly contradicts your statement. It's clearly down quite a bit in purchasing power of assets, goods, and services.

cannonpalms 4y ago
This is not what is meant by the phrase, "X currency is down." A decrease in purchasing power of a currency is known as "inflation."
- zaroth 4y ago
  Sorry if I’m using the wrong vernacular. The reason why market prices look so high is because it’s priced in US dollars, and US dollars aren’t worth what they used to be. The reason why markets go up when the Fed seems completely unconcerned or helpless to stop the worst inflation in decades, is because people are betting that this trend will continue. If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture.
  - mpalczewski 4y ago
    > If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture. If you price the dollar in terms of ounces of gold, then you would think that the dollar is worth more than it was in September of 2011, and you would think that the dollar is worth more now than it was in August of 2020. While gold is stable over the long term e.g. centuries, its price can be quite erratic over the short term. You can price it in barrels of oil, silver, copper, a collection of other currencies, bitcoin, median house price and get a different answer each time. > The reason why markets go up when the Fed seems completely unconcerned or helpless to stop the worst inflation in decades, is because people are betting that this trend will continue. It's a global phenomenon. We've got less production of goods and commodities because of covid and just as much if not more demand. So supply down, demand even or even up. What do you expect to happen? While the USD has problems, other currencies seem even worse at the moment. There is not some other fiat currency at the moment that is better than the USD. Things that people think are hedges BTC(Ponzi scheme), Gold(volatile) don't always work well. e.g. here is real(inflation adjusted) gold prices. https://blogger.googleusercontent.com/img/a/AVvXsEiyWSImAdvNFecozQ_q07f_Llg2m-h16DEKGQr_NurjY3NsCwIR1R2OI8_RA00NkeT4COe6IE-9xCzI2TALE7SF6SDV_B8CRvv8oyrIq_vJaUtCMjNNDiri7KTTkgTRvBTBjCyMykUw_-U5q45GUQv8VVfAaRgIABkF9p-i2oIsyy9m6OzBl_CDRQ2L=s2445 https://blogger.googleusercontent.com/img/a/AVvXsEiyWSImAdvN... it doesn't look all that cheap at the moment. > If you re-price the market in another unit of measure, like “ounces of gold”, you will get an entirely different picture. Like this? https://schrts.co/pAKzMCFc https://schrts.co/pAKzMCFc
    - zaroth 4y ago
      “Real price of gold” is an interesting concept, probably showing a statistical quirk of backtracing CPI than anything useful though? I’d have to study how it was calculated. Yes, your graph at the end showing SPY in gold falling below the 200 day MA is exactly what I was talking about. I absolutely agree gold is volatile in the short term and not some magical replacement for fiat currency nor an absolute indicator of the level of inflation in an economy. Sometimes however it’s important to figure out if the “platform” you’re taking your measurement from isn’t actually what’s moving, rather than the thing you’re trying to measure. If you’re going to step outside of the fiat viewpoint, gold is where I’d usually start. Maybe a VIX-adjusted price of gold or something like that could be useful to smooth it out.