3 ms·

You’re ignoring asset price inflation. China is not experiencing the same rate of inflation.

vkou 4y ago
Asset price inflation was happening for over a decade, yet never made it's way into the cost of butter, until wages for butterchurners and milkmaids and the price of gas started growing.
- lumost 4y ago
  Alternately, asset price inflation didn’t matter until it priced everyone out of housing, commercial real estate, retirement, and any other asset accumulation. This inflation episode coincides with millennials nearing the end of the typical income growth phase of their careers without substantial asset buying power. Eventually people will simply drop out of the race, or demand vastly higher wages to compensate.
  - vkou 4y ago
    > retirement, and any other asset accumulation. Asset inflation doesn't matter in that, as long as the assets don't later deflate. > or demand vastly higher wages to compensate. People can demand all they want, but won't get them until there's a labour shortage. Which is what actually caused wages to grow.
    - lumost 4y ago
      > Asset inflation doesn't matter in that, as long as the assets don't later deflate. For most productive assets (including housing) there is a a limit to the degree of fractional ownership one can reasonably have. While I could buy into REITs, it only closes my short position on housing to own. It's in my interest to own an appreciating/inflating asset that I'm short on - particularly when I will go bust otherwise. If Rent captures all of my purchasing power, I may no longer be able to reasonably close this short position in a reasonable time frame.
      - vkou 4y ago
        Rents in most of the country didn't inflate like assets, though. (Because the asset growth was mostly funded through magical borrowed money, while rent is paid by real wages received by real people. No wage growth = limited rent growth. Except in places like SF, where it is paid by stock grants, which grow thanks to magical borrowed money.)
  - alangibson 4y ago
    > This inflation episode coincides with millennials nearing the end of the typical income growth phase of their careers without substantial asset buying power. Interesting. Do you have any links that quantify this? > Eventually people will simply drop out of the race, or demand vastly higher wages to compensate Maybe in some places. But this doesn't line up with what we know about American nature. Their frustration will most likely be expressed via violent outburst, blaming other groups, believing in conspiracies, and who knows what other exciting new antisocial behaviors they'll cook up on the internet.

vkou 4y ago

Asset price inflation was happening for over a decade, yet never made it's way into the cost of butter, until wages for butterchurners and milkmaids and the price of gas started growing.

lumost 4y ago
Alternately, asset price inflation didn’t matter until it priced everyone out of housing, commercial real estate, retirement, and any other asset accumulation. This inflation episode coincides with millennials nearing the end of the typical income growth phase of their careers without substantial asset buying power. Eventually people will simply drop out of the race, or demand vastly higher wages to compensate.
- vkou 4y ago
  > retirement, and any other asset accumulation. Asset inflation doesn't matter in that, as long as the assets don't later deflate. > or demand vastly higher wages to compensate. People can demand all they want, but won't get them until there's a labour shortage. Which is what actually caused wages to grow.
  - lumost 4y ago
    > Asset inflation doesn't matter in that, as long as the assets don't later deflate. For most productive assets (including housing) there is a a limit to the degree of fractional ownership one can reasonably have. While I could buy into REITs, it only closes my short position on housing to own. It's in my interest to own an appreciating/inflating asset that I'm short on - particularly when I will go bust otherwise. If Rent captures all of my purchasing power, I may no longer be able to reasonably close this short position in a reasonable time frame.
    - vkou 4y ago
      Rents in most of the country didn't inflate like assets, though. (Because the asset growth was mostly funded through magical borrowed money, while rent is paid by real wages received by real people. No wage growth = limited rent growth. Except in places like SF, where it is paid by stock grants, which grow thanks to magical borrowed money.)
- alangibson 4y ago
  > This inflation episode coincides with millennials nearing the end of the typical income growth phase of their careers without substantial asset buying power. Interesting. Do you have any links that quantify this? > Eventually people will simply drop out of the race, or demand vastly higher wages to compensate Maybe in some places. But this doesn't line up with what we know about American nature. Their frustration will most likely be expressed via violent outburst, blaming other groups, believing in conspiracies, and who knows what other exciting new antisocial behaviors they'll cook up on the internet.