4 ms·

>If it means your wages buy 30% less, and inflation is 30%, then your nominal income hasn't increased. If so, something has gone very wrong, and it sounds like

>If it means your wages buy 30% less, and inflation is 30%, then your nominal income hasn't increased. If so, something has gone very wrong, and it sounds like your employer is screwing you over. Employers use the fake numbers to determine adjustments. It's not like they are necessarily screwing you over if they don't give you a 30% raise due to inflation either lol. They have to come up with extra cash because of inflation too. >But if you had a meaningful amount of savings, were none of the savings in stocks? Stocks have gone up tremendously since the peak in early 2020. That's not a profit dude. It's the simple phenomenon of everything costing more. Since most businesses are hurt by inflation, stocks do not keep up with rapid inflation. >And if you had a mortgage, it would have effectively shrunk by whatever amount your nominal income increased. It is true that inflation makes debts easier to pay, up to a point. But that means the lender gets screwed. It is a dysfunctional situation.

Dylan16807 3y ago
> It's not like they are necessarily screwing you over if they don't give you a 30% raise Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. > That's not a profit dude. It's the simple phenomenon of everything costing more. Since most businesses are hurt by inflation, stocks do not keep up with rapid inflation. It wouldn't have to be a profit for my point to work. But have you looked at stocks? The S&P 500 went up not just more than 30%, it went up more than 50%. Stocks did profit. And that's versus the relative peak. Any other baseline in the range of 4 years ago and the increase is even higher, and from 5 years ago it's up 75%. > But that means the lender gets screwed. It is a dysfunctional situation. You can't make everyone happy, but I was focusing on the experience of a relatively average person.
- wakawaka28 3y ago
  >Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. If you're supposed to be getting raises anyway, how much of your raise is due to inflation and how much is due to advancement? I am making more money than I did before the pandemic but that was almost 4 years of grinding to reach that point. All indications I've seen point to people's wages not keeping up with inflation. Wages always lag behind other prices, and usually by a lot. >It wouldn't have to be a profit for my point to work. Your point was precisely that "gains" in the stock market make up for other downsides of inflation. This just doesn't work out. Our economy relies on the value of money remaining stable. >But have you looked at stocks? The S&P 500 went up not just more than 30%, it went up more than 50%. Stocks did profit. And that's versus the relative peak. Any other baseline in the range of 4 years ago and the increase is even higher, and from 5 years ago it's up 75%. Sorry but stocks are supposed to profit. In real terms there is probably a slight profit. The rest of the increases are pure devaluation of the dollar. At some point, businesses will likely struggle to remain profitable as everyone tries to cut costs. >You can't make everyone happy, but I was focusing on the experience of a relatively average person. I think stable money would actually be the best-case scenario and would make people happier than high inflation. You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting screwed due to inflation is terrible for the economy.
  - Dylan16807 3y ago
    > Your point was precisely that "gains" in the stock market make up for other downsides of inflation. Nah, just saying it can reduce the damage. > You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting screwed due to inflation is terrible for the economy. I was covering all the bases. If you don't have significant savings, then losing 30% of negligible is also negligible. And the most common situations that involve savings/debt have gone in the favor of individuals. It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually. > Sorry but stocks are supposed to profit. In real terms there is probably a slight profit. Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit.
    - wakawaka28 3y ago
      >Nah, just saying it can reduce the damage. Increased nominal value of assets doesn't reduce any damage actually. It just means that maybe you lost a smaller portion of your net worth than you would have otherwise. >It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually. While some businesses may be able to psych people out with an unnecessary price hike, it doesn't actually help anything. >Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit. No, there is no profit from inflation. The numbers are just getting bigger. There is one actual way to profit from inflation, and that is to borrow money and buy valuable stuff, then repay the loan with less valuable dollars.
      - Dylan16807 3y ago
        > It just means that maybe you lost a smaller portion of your net worth than you would have otherwise. Y-yes? That isn't reducing the damage to you? > No, there is no profit from inflation. The numbers are just getting bigger. There is one actual way to profit from inflation, and that is to borrow money and buy valuable stuff, then repay the loan with less valuable dollars. I didn't say the profit was from inflation. If inflation is 30% percent, but your savings went up 60% since 4 years ago, then you profited overall. (And stocks would not have gone up the same amount if there was no inflation.) Overall you're probably worse off than if inflation was lower, but you can't say that your money buys 30% less now. Remember, I was specifically objecting to the idea that "inflation is X% in the last few years, therefore my money buys X% less". Ignoring that it's the wrong way to calculate percentages, the baseline idea is not true. The amount your wallet is impacted is more than 0, but less than inflation.

Dylan16807 3y ago

> It's not like they are necessarily screwing you over if they don't give you a 30% raise Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. > That's not a profit dude. It's the simple phenomenon of everything costing more. Since most businesses are hurt by inflation, stocks do not keep up with rapid inflation. It wouldn't have to be a profit for my point to work. But have you looked at stocks? The S&P 500 went up not just more than 30%, it went up more than 50%. Stocks did profit. And that's versus the relative peak. Any other baseline in the range of 4 years ago and the increase is even higher, and from 5 years ago it's up 75%. > But that means the lender gets screwed. It is a dysfunctional situation. You can't make everyone happy, but I was focusing on the experience of a relatively average person.

wakawaka28 3y ago
>Yes, but I wasn't asking about whether the raise is 30%. If you have a 12% raise during 30% inflation then you can buy 18% less, for example. If you're supposed to be getting raises anyway, how much of your raise is due to inflation and how much is due to advancement? I am making more money than I did before the pandemic but that was almost 4 years of grinding to reach that point. All indications I've seen point to people's wages not keeping up with inflation. Wages always lag behind other prices, and usually by a lot. >It wouldn't have to be a profit for my point to work. Your point was precisely that "gains" in the stock market make up for other downsides of inflation. This just doesn't work out. Our economy relies on the value of money remaining stable. >But have you looked at stocks? The S&P 500 went up not just more than 30%, it went up more than 50%. Stocks did profit. And that's versus the relative peak. Any other baseline in the range of 4 years ago and the increase is even higher, and from 5 years ago it's up 75%. Sorry but stocks are supposed to profit. In real terms there is probably a slight profit. The rest of the increases are pure devaluation of the dollar. At some point, businesses will likely struggle to remain profitable as everyone tries to cut costs. >You can't make everyone happy, but I was focusing on the experience of a relatively average person. I think stable money would actually be the best-case scenario and would make people happier than high inflation. You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting screwed due to inflation is terrible for the economy.
- Dylan16807 3y ago
  > Your point was precisely that "gains" in the stock market make up for other downsides of inflation. Nah, just saying it can reduce the damage. > You have a very distorted idea of what is a "relatively average person"... Most people don't have money in the stock market (which I've already argued is not making up for inflation anyway). Most people don't own houses either. As much as I hate banks, lenders getting screwed due to inflation is terrible for the economy. I was covering all the bases. If you don't have significant savings, then losing 30% of negligible is also negligible. And the most common situations that involve savings/debt have gone in the favor of individuals. It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually. > Sorry but stocks are supposed to profit. In real terms there is probably a slight profit. Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit.
  - wakawaka28 3y ago
    >Nah, just saying it can reduce the damage. Increased nominal value of assets doesn't reduce any damage actually. It just means that maybe you lost a smaller portion of your net worth than you would have otherwise. >It's not good for businesses, and the drop in real income is not good. But the income hurt is smaller than raw inflation, and the the savings situation is pretty nice actually. While some businesses may be able to psych people out with an unnecessary price hike, it doesn't actually help anything. >Well I was talking to the guy that said inflation was 25-30%. If they're right than stocks have had a huge real profit. No, there is no profit from inflation. The numbers are just getting bigger. There is one actual way to profit from inflation, and that is to borrow money and buy valuable stuff, then repay the loan with less valuable dollars.
    - Dylan16807 3y ago
      > It just means that maybe you lost a smaller portion of your net worth than you would have otherwise. Y-yes? That isn't reducing the damage to you? > No, there is no profit from inflation. The numbers are just getting bigger. There is one actual way to profit from inflation, and that is to borrow money and buy valuable stuff, then repay the loan with less valuable dollars. I didn't say the profit was from inflation. If inflation is 30% percent, but your savings went up 60% since 4 years ago, then you profited overall. (And stocks would not have gone up the same amount if there was no inflation.) Overall you're probably worse off than if inflation was lower, but you can't say that your money buys 30% less now. Remember, I was specifically objecting to the idea that "inflation is X% in the last few years, therefore my money buys X% less". Ignoring that it's the wrong way to calculate percentages, the baseline idea is not true. The amount your wallet is impacted is more than 0, but less than inflation.