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You left out all the new money The Fed pumped into the system during Covid. We all know it happened. I don't understand why anyone would expect a return to pre-

You left out all the new money The Fed pumped into the system during Covid. We all know it happened. I don't understand why anyone would expect a return to pre-Covid prices.

brewdad 3y ago
It's also 4 years later. Even if inflation had stuck to the 2% levels we had prior to COVID, we would expect prices to be almost 10% higher today just due to baseline inflation.
- chiefalchemist 3y ago
  Keep in mind the Consumer Price Index is manipulated in the sense different things are swapped in and out in order to get out the number they want. That is, for (random) example, consumers didn't switch from beef to pork because their tastes changed but because beef became too exoensive. But swap out beef for pork and POOF you've lowed inflation. Yeah. But you've also lowered the broader quality of the goods in the index. I don't think there is anyone I know who believes inflation is back down to 2%. Anecdotal? Sure. But perception is reality, especially in an election year.
  - seanmcdirmid 3y ago
    Inflation feels like it is about 2% here, but I think they’ve reached a ridiculous cap on things where I live. I can imagine different parts of the country (and world) getting hit differently depending on how badly they’ve already been hit.
vkou 3y ago
That's what is fueling the wage growth part of what I listed. All other things being equal, pumping money into the system doesn't cause tomato prices to rise by magic. It does so through higher wages.
- chiefalchemist 3y ago
  Well yes, it kinda does (happen by "magic"). Inflation is not about prices going up, it's about the value of your dollar going down. That is, what $10 used to buy can't buy that any more. Pump money into the system devalues what is presently in the system. Ok, maybe not magic, just Finance 101. Inflation, The Fed's 2% target type, is a systematic way of devaluing your buying power. Full stop. Do the math... in 35 yrs - half a lifetime - that cuts the value of your money *in half*. But 2% "inflation" sounds so sweet, easy and must be inevitable, doesn't it? btw, Inflation also helps increase income inequality. It helps move more to the top. Put another way, given the improvements in technology, productivity, efficiency, globalization, etc. why are prices going up at all? Who benefits from a system that runs complete counter to logic? I recently finished Lyn Alden's "Broken Money" and highly recommend it, especially the first four sections. https://www.lynalden.com/broken-money/ https://www.lynalden.com/broken-money/

You left out all the new money The Fed pumped into the system during Covid. We all know it happened. I don't understand why anyone would expect a return to pre-Covid prices.

brewdad 3y ago

It's also 4 years later. Even if inflation had stuck to the 2% levels we had prior to COVID, we would expect prices to be almost 10% higher today just due to baseline inflation.

chiefalchemist 3y ago
Keep in mind the Consumer Price Index is manipulated in the sense different things are swapped in and out in order to get out the number they want. That is, for (random) example, consumers didn't switch from beef to pork because their tastes changed but because beef became too exoensive. But swap out beef for pork and POOF you've lowed inflation. Yeah. But you've also lowered the broader quality of the goods in the index. I don't think there is anyone I know who believes inflation is back down to 2%. Anecdotal? Sure. But perception is reality, especially in an election year.
- seanmcdirmid 3y ago
  Inflation feels like it is about 2% here, but I think they’ve reached a ridiculous cap on things where I live. I can imagine different parts of the country (and world) getting hit differently depending on how badly they’ve already been hit.

vkou 3y ago

That's what is fueling the wage growth part of what I listed. All other things being equal, pumping money into the system doesn't cause tomato prices to rise by magic. It does so through higher wages.

chiefalchemist 3y ago
Well yes, it kinda does (happen by "magic"). Inflation is not about prices going up, it's about the value of your dollar going down. That is, what $10 used to buy can't buy that any more. Pump money into the system devalues what is presently in the system. Ok, maybe not magic, just Finance 101. Inflation, The Fed's 2% target type, is a systematic way of devaluing your buying power. Full stop. Do the math... in 35 yrs - half a lifetime - that cuts the value of your money *in half*. But 2% "inflation" sounds so sweet, easy and must be inevitable, doesn't it? btw, Inflation also helps increase income inequality. It helps move more to the top. Put another way, given the improvements in technology, productivity, efficiency, globalization, etc. why are prices going up at all? Who benefits from a system that runs complete counter to logic? I recently finished Lyn Alden's "Broken Money" and highly recommend it, especially the first four sections. https://www.lynalden.com/broken-money/ https://www.lynalden.com/broken-money/