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>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 suppos

>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.
    - wakawaka28 3y ago
      >Y-yes? That isn't reducing the damage to you? It is only reducing damage to you if you anticipated the inflation and avoided it. Here's an example: Person 1: Has $5k in cash. Person 2: Has $5k in cash and a house that is paid for, worth $100k. After inflation, both of these people would lose the same amount of spending power on the $5k. The one with the house has an asset that goes up in dollars but is likely worth the same or less. His spending power goes down by just as much as the other guy, if not more. >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.) Ok so yes, if your stocks outperformed inflation somehow (despite inflation unofficially running 10-20% per year!) then you can claim a profit. But stocks are supposed to profit anyway. You did make it sound like you thought the inflation made the stocks more valuable. It does not, because inflation raises all prices in general. >Overall you're probably worse off than if inflation was lower, but you can't say that your money buys 30% less now. Actually yes you can. Money buys 30% less. If you had assets that rose with inflation, you can preserve your spending power. But your salary is not like that, nor any cash-adjacent instrument you have like savings, CDs, and treasuries. >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. You do have a point about it being backward. 20% inflation means your dollar buys about 83% of what it did previously. But as inflation is measured by price changes it literally means your money buys the straightforwardly-calculated reduced amount. You can't point to inflation avoidance schemes or occasional salary increases and say that shit offsets the actual price increases in a meaningful way. Accounting for inflation avoidance (an economic inefficiency produced by inflation) would require a whole new statistic.

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.
  - wakawaka28 3y ago
    >Y-yes? That isn't reducing the damage to you? It is only reducing damage to you if you anticipated the inflation and avoided it. Here's an example: Person 1: Has $5k in cash. Person 2: Has $5k in cash and a house that is paid for, worth $100k. After inflation, both of these people would lose the same amount of spending power on the $5k. The one with the house has an asset that goes up in dollars but is likely worth the same or less. His spending power goes down by just as much as the other guy, if not more. >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.) Ok so yes, if your stocks outperformed inflation somehow (despite inflation unofficially running 10-20% per year!) then you can claim a profit. But stocks are supposed to profit anyway. You did make it sound like you thought the inflation made the stocks more valuable. It does not, because inflation raises all prices in general. >Overall you're probably worse off than if inflation was lower, but you can't say that your money buys 30% less now. Actually yes you can. Money buys 30% less. If you had assets that rose with inflation, you can preserve your spending power. But your salary is not like that, nor any cash-adjacent instrument you have like savings, CDs, and treasuries. >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. You do have a point about it being backward. 20% inflation means your dollar buys about 83% of what it did previously. But as inflation is measured by price changes it literally means your money buys the straightforwardly-calculated reduced amount. You can't point to inflation avoidance schemes or occasional salary increases and say that shit offsets the actual price increases in a meaningful way. Accounting for inflation avoidance (an economic inefficiency produced by inflation) would require a whole new statistic.