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>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 p

>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
    > Person 1: Has $5k in cash. Person 2: Has $5k in cash and a house that is paid for, worth $100k. Yeah the guy that has a paid-for house and zero stocks loses out asset-wise. That's a weird-ass balance of assets though. > Ok so yes, if your stocks outperformed inflation somehow Well again, I was talking to someone else, using their inflation number of 30% as the basis of my comment. Stocks objectively rose by a lot more than 30%. I don't want to argue with you about what actual inflation was. > 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. I addressed salary in my earlier comment. If your salary didn't have any extra increase because of inflation, your employer is screwing you over, stop letting them do that. Salary and savings are two separate arguments and I made both of them. > You can't point to inflation avoidance schemes "Own some stock" is not a scheme, it's what you're supposed to do with significant amounts of savings. > or occasional salary increases and say that shit offsets the actual price increases in a meaningful way I think it's fair to count on an extra salary increase. Tons of people got extra salary increases from inflation. Were they enough to compensate for all of inflation? Usually not. But they were enough to reduce the losses. Which is all I need to make my point. Especially because lower wage jobs got better increases, and higher wage jobs correlate to owning at least a few thousand dollars of stock.
    - wakawaka28 3y ago
      >Yeah the guy that has a paid-for house and zero stocks loses out asset-wise. That's a weird-ass balance of assets though. What I'm trying to tell you is that stocks are assets too! If they went up due to inflation, that's not "profit". It just takes more weaker dollars to buy the same stocks again. >Stocks objectively rose by a lot more than 30%. I don't want to argue with you about what actual inflation was. Again, if inflation was 30% and stocks went up 60%, you have to figure inflation into the actual earnings to see if profits are actually good (i.e., your spending power increased by the expected amount). You can take losses in spending power as the numbers keep going up dramatically. It's not profit (in the most meaningful sense) unless your spending power goes up. >I addressed salary in my earlier comment. If your salary didn't have any extra increase because of inflation, your employer is screwing you over, stop letting them do that. You didn't actually address it because you keep missing the point. Number goes up != profit. As for employers, they suffer from inflation too. Even if you have the luxurious position of being able to name your price, your employer might simply not have the money. Inflation represents theft, and someone always gets screwed. >"Own some stock" is not a scheme, it's what you're supposed to do with significant amounts of savings. That is a strategy proposed for NPCs, and it isn't right for everyone. Even if it was, it does not really protect you from rapid inflation, because inflation is a sign of a bad economy. It's probably better than holding currency directly but profits may not keep up with inflation. And most of all, stockholders don't benefit from inflation. They at best avoid some of the effects of inflation, in the best case. >I think it's fair to count on an extra salary increase. Tons of people got extra salary increases from inflation. Were they enough to compensate for all of inflation? Usually not. But they were enough to reduce the losses. Which is all I need to make my point. That's a weak ass point, bro. Lots of people have fixed incomes, or otherwise can't demand salary hikes and get them in a timely manner. Wages always trail inflation, and the official cooked numbers are used to gaslight employees into taking less. Many workers get fired when their companies lose money due to inflation. There is no free lunch. >Especially because lower wage jobs got better increases, and higher wage jobs correlate to owning at least a few thousand dollars of stock. I don't believe they got better increases. Lower wage workers have a much larger proportion of their salaries going toward expenses, and they are far more at risk of literally not having enough money due to inflation. Higher-wage workers may be more likely to participate in the stock market, but as I've laid out that is not really adequate protection from inflation. People in debt may benefit from inflation, but forking over unearned benefits to people in debt is a misuse of resources and an injustice to well-meaning creditors. If you're just trying to argue that people have ways of attempting to cope with inflation, you can stop now. I agree with that. What I object to is the attitude of "it's not so bad" that you're offering up. Inflation is bad and there's no real escape for most people. Our lives will really suck if inflation gets (more) out of hand.

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
  > Person 1: Has $5k in cash. Person 2: Has $5k in cash and a house that is paid for, worth $100k. Yeah the guy that has a paid-for house and zero stocks loses out asset-wise. That's a weird-ass balance of assets though. > Ok so yes, if your stocks outperformed inflation somehow Well again, I was talking to someone else, using their inflation number of 30% as the basis of my comment. Stocks objectively rose by a lot more than 30%. I don't want to argue with you about what actual inflation was. > 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. I addressed salary in my earlier comment. If your salary didn't have any extra increase because of inflation, your employer is screwing you over, stop letting them do that. Salary and savings are two separate arguments and I made both of them. > You can't point to inflation avoidance schemes "Own some stock" is not a scheme, it's what you're supposed to do with significant amounts of savings. > or occasional salary increases and say that shit offsets the actual price increases in a meaningful way I think it's fair to count on an extra salary increase. Tons of people got extra salary increases from inflation. Were they enough to compensate for all of inflation? Usually not. But they were enough to reduce the losses. Which is all I need to make my point. Especially because lower wage jobs got better increases, and higher wage jobs correlate to owning at least a few thousand dollars of stock.
  - wakawaka28 3y ago
    >Yeah the guy that has a paid-for house and zero stocks loses out asset-wise. That's a weird-ass balance of assets though. What I'm trying to tell you is that stocks are assets too! If they went up due to inflation, that's not "profit". It just takes more weaker dollars to buy the same stocks again. >Stocks objectively rose by a lot more than 30%. I don't want to argue with you about what actual inflation was. Again, if inflation was 30% and stocks went up 60%, you have to figure inflation into the actual earnings to see if profits are actually good (i.e., your spending power increased by the expected amount). You can take losses in spending power as the numbers keep going up dramatically. It's not profit (in the most meaningful sense) unless your spending power goes up. >I addressed salary in my earlier comment. If your salary didn't have any extra increase because of inflation, your employer is screwing you over, stop letting them do that. You didn't actually address it because you keep missing the point. Number goes up != profit. As for employers, they suffer from inflation too. Even if you have the luxurious position of being able to name your price, your employer might simply not have the money. Inflation represents theft, and someone always gets screwed. >"Own some stock" is not a scheme, it's what you're supposed to do with significant amounts of savings. That is a strategy proposed for NPCs, and it isn't right for everyone. Even if it was, it does not really protect you from rapid inflation, because inflation is a sign of a bad economy. It's probably better than holding currency directly but profits may not keep up with inflation. And most of all, stockholders don't benefit from inflation. They at best avoid some of the effects of inflation, in the best case. >I think it's fair to count on an extra salary increase. Tons of people got extra salary increases from inflation. Were they enough to compensate for all of inflation? Usually not. But they were enough to reduce the losses. Which is all I need to make my point. That's a weak ass point, bro. Lots of people have fixed incomes, or otherwise can't demand salary hikes and get them in a timely manner. Wages always trail inflation, and the official cooked numbers are used to gaslight employees into taking less. Many workers get fired when their companies lose money due to inflation. There is no free lunch. >Especially because lower wage jobs got better increases, and higher wage jobs correlate to owning at least a few thousand dollars of stock. I don't believe they got better increases. Lower wage workers have a much larger proportion of their salaries going toward expenses, and they are far more at risk of literally not having enough money due to inflation. Higher-wage workers may be more likely to participate in the stock market, but as I've laid out that is not really adequate protection from inflation. People in debt may benefit from inflation, but forking over unearned benefits to people in debt is a misuse of resources and an injustice to well-meaning creditors. If you're just trying to argue that people have ways of attempting to cope with inflation, you can stop now. I agree with that. What I object to is the attitude of "it's not so bad" that you're offering up. Inflation is bad and there's no real escape for most people. Our lives will really suck if inflation gets (more) out of hand.