4 ms·

In the 40s the inflation was, in and of itself, liminal and driven by short-term actions in response to WW2, similar to what happened during the Civil War, WW1,

In the 40s the inflation was, in and of itself, liminal and driven by short-term actions in response to WW2, similar to what happened during the Civil War, WW1, and other such eras. The funny money took off as policy much later. It has very little to do with the current era of the routine 'printing' of trillions of dollars as a normal policy, let alone with a wealth of systems adapted to exploit that to this maximal. This is why the 40s, in terms of outcomes, looked more like previous eras then the current. In investing, you seem to be trying to derive variance from expected value, which is impossible. And risk is not the same thing as variance. It's entirely possible for an investment with a 0.1% EV to have a lower variance than one with a 15% EV. The obvious example there would be hedges against black swans, contrasted against a government bond from a stable country. In any case, this argument also works against you. Because the point is that anything with a real expected return of "x" in an inflationary system has a real return of e.g. "x+5" (or whatever the exact delta happens to be) in a non-inflationary system. You cannot, in good faith, try to argue that is a bad thing. Whatever 'x' happens to be, whether 0.1 or 50, it's going to be better in a non-inflationary system. --- As for social equalities, you likely missed the above note. I'll simply quote it here: "Somebody else just submitted this [1]. The Fed just released a paper showing (or at least affirming) that the labor share of income in the US is at its lowest post-war level which is, more or less, equivalent to stating that it's at its lowest level ever. They're likely just using data starting at the 40s for the same reason I am. But the really interesting thing? Go open their graphs and look where the inflection point is. It's, again, the funny money." [1] - https://news.ycombinator.com/item?id=48734234 https://news.ycombinator.com/item?id=48734234

notahacker 4mo ago
> In investing, you seem to be trying to derive variance from expected value, which is impossible. And risk is not the same thing as variance. It's funny, because two posts ago you wrote the words "expected value is a term you do not seem familiar with. It is a risk adjusted value of expected return on something". So you're really only arguing against yourself here But variance is, in fact a way for investors to assess risk (again, if you had an adult-level of understanding of the subject matter or even a modicum of self awareness you wouldn't keep contesting definitions for no reason). And since investors care about risk adjusted returns, they do not think an expected 0.1% nominal return on productive activity is attractive, least of all in a deflationary environment. (Sure, you can't directly derive variance from expected return, but you don't need to do that to rule out ludicrous scenarios like a sub 10 basis point risk premium on investing in productive activity whilst prices fall, which means you don't invest at 0.1%) > It's entirely possible for an investment with a 0.1% EV to have a lower variance than one with a 15% EV. Sure. It is however entirely impossible for a productive venture with a 0.1% EV to have an attractive risk adjusted return under deflation. Nobody with an adult level understanding of finance would make this argument, let alone still be trying to defend it by arguing against their own attempted gotcha multiple posts later. Because they understand basics like "deflation causes debt to be more expensive" (remember a week ago when you wrote that, apparently without understanding what it means), and 0.1% is not a high return on risky activity when debt is expensive. And also, they understand that the risk-adjusted return will be negative, particularly as risks to commercial activity increase under deflation caused by monetary policy intentionally starving the economy of capital). > Because the point is that anything with a real expected return of "x" in an inflationary system has a real return of e.g. "x+5" (or whatever the exact delta happens to be) in a non-inflationary system Again, this is just an assertion that only somebody with no understanding of basic stuff like how inflation/deflation affects sales prices and interest rates would make. It is very easy to argue that the price somebody has to pay a wealthier person to borrow money being x+5 rather than x is a bad thing, if you believe that it is better for economies to reward people that make stuff rather than people that have stuff. The actual point was that it's harder to make a positive money return producing stuff to sell when next year's price is y-2 rather than y+2, and in those circumstances also easy to make a small real return doing nothing or a big real return lending to cover short term debts instead. Again, I'm sorry you don't understand this, but it's really, really not possible to contest the fact that deflation does not incentivise investment if you understand supply and demand to high school level (never mind the actual nuances of interest rates and transmission mechanisms). I guess I can look forward to you eventually accepting that it doesn't whilst attempting to attribute your current position to me in five days time. If only you could trade some of your unmatched reserves of persistence for a little actual knowledge... (you could, for example,read a book instead of doubling down on being wrong by Googling more economic terms to insinuate I'm missing whilst not even being able to define them without making mistakes) > But the really interesting thing? Go open their graphs and look where the inflection point is. It's, again, the funny money The really interesting thing is that you've actually managed to find an economic chart without an inflection point to make argument about inflection points, which is quite an achievement! The trend line over the period displayed appears to be a noisy concave function with the noise attributable to economic cycles. Although if you put a gun to my head any asked me to point to what looks most like an inflection point in this graph without an actual inflection point, I'd probably point to the steepening of the downslope of the curve around the millennium which doesn't seem to have much to do with leaving the gold standard or inflation being high.... Watching you pretend to understand the subject matter: https://www.youtube.com/watch?v=2WZLJpMOxS4 https://www.youtube.com/watch?v=2WZLJpMOxS4
- somenameforme 4mo ago
  I'm not the one arguing about definitions. You chose to take us down that path, adding a bunch of ad hominem while simultaneously misusing the terminology you were trying to be patronizing with. I 100% agree that it's completely inconsequential so long as we both understand what the other is saying, but I'm also trying to, within reason, respond to each thing you're stating. One major thing I'd emphasize here is that you're acting like the consequences of non-inflationary systems are speculative. The entire point of this discussion is we have a wealth of data to draw from, from both systems. With a non-inflationary system we have a system that was, more or less, stable over nearly 200 years through numerous catastrophic events. With the modern inflationary system we have something that already not only seems unsustainable, but is causing major societal issues after just 50 years of relative super-utopia. I say super-utopia because not only have we avoided anything on the scale of e.g. WW2, but it kicked off alongside the once-in-a-civilization super-economic boom of mass digitization that is now plateauing. So on the data issue - the way you determine an inflection point on a noisy graph is just to look at the midpoints of the noise and graph them. On the Fed's graph look at the slope of the midpoints from start to mid 70s, and then from the mid 70s to present. The brief spike at the dotcom bubble is just noise that gets smoothed out. For a comparable graph, with less noise, here [1] is a graph on labor's shares of gross domestic income. Again, you seriously can't miss the inflection point. For specific item prices, this [2] site is extremely interesting. I'm not fond of the author's overt partisanship, but his data is sound and eye opening. He's collected the price of Campbell's tomato soup over more than a century and graphed them. The fun thing about that is that they've been selling the same product in the same quantity, to a generally price sensitive customer, for well over a century. And so it helps give an image of raw price data over time in a way that aggregate measurements like CPI are often unable to do so. And again we see the exact same inflection point. It also gives some context of 40s inflation versus the modern system that we've created. [1] - https://fred.stlouisfed.org/series/W270RE1A156NBEA https://fred.stlouisfed.org/series/W270RE1A156NBEA [2] - https://politicalcalculations.blogspot.com/2026/01/the-price-history-of-campbells-tomato.html https://politicalcalculations.blogspot.com/2026/01/the-price...
  - notahacker 4mo ago

notahacker 4mo ago

> In investing, you seem to be trying to derive variance from expected value, which is impossible. And risk is not the same thing as variance. It's funny, because two posts ago you wrote the words "expected value is a term you do not seem familiar with. It is a risk adjusted value of expected return on something". So you're really only arguing against yourself here But variance is, in fact a way for investors to assess risk (again, if you had an adult-level of understanding of the subject matter or even a modicum of self awareness you wouldn't keep contesting definitions for no reason). And since investors care about risk adjusted returns, they do not think an expected 0.1% nominal return on productive activity is attractive, least of all in a deflationary environment. (Sure, you can't directly derive variance from expected return, but you don't need to do that to rule out ludicrous scenarios like a sub 10 basis point risk premium on investing in productive activity whilst prices fall, which means you don't invest at 0.1%) > It's entirely possible for an investment with a 0.1% EV to have a lower variance than one with a 15% EV. Sure. It is however entirely impossible for a productive venture with a 0.1% EV to have an attractive risk adjusted return under deflation. Nobody with an adult level understanding of finance would make this argument, let alone still be trying to defend it by arguing against their own attempted gotcha multiple posts later. Because they understand basics like "deflation causes debt to be more expensive" (remember a week ago when you wrote that, apparently without understanding what it means), and 0.1% is not a high return on risky activity when debt is expensive. And also, they understand that the risk-adjusted return will be negative, particularly as risks to commercial activity increase under deflation caused by monetary policy intentionally starving the economy of capital). > Because the point is that anything with a real expected return of "x" in an inflationary system has a real return of e.g. "x+5" (or whatever the exact delta happens to be) in a non-inflationary system Again, this is just an assertion that only somebody with no understanding of basic stuff like how inflation/deflation affects sales prices and interest rates would make. It is very easy to argue that the price somebody has to pay a wealthier person to borrow money being x+5 rather than x is a bad thing, if you believe that it is better for economies to reward people that make stuff rather than people that have stuff. The actual point was that it's harder to make a positive money return producing stuff to sell when next year's price is y-2 rather than y+2, and in those circumstances also easy to make a small real return doing nothing or a big real return lending to cover short term debts instead. Again, I'm sorry you don't understand this, but it's really, really not possible to contest the fact that deflation does not incentivise investment if you understand supply and demand to high school level (never mind the actual nuances of interest rates and transmission mechanisms). I guess I can look forward to you eventually accepting that it doesn't whilst attempting to attribute your current position to me in five days time. If only you could trade some of your unmatched reserves of persistence for a little actual knowledge... (you could, for example,read a book instead of doubling down on being wrong by Googling more economic terms to insinuate I'm missing whilst not even being able to define them without making mistakes) > But the really interesting thing? Go open their graphs and look where the inflection point is. It's, again, the funny money The really interesting thing is that you've actually managed to find an economic chart without an inflection point to make argument about inflection points, which is quite an achievement! The trend line over the period displayed appears to be a noisy concave function with the noise attributable to economic cycles. Although if you put a gun to my head any asked me to point to what looks most like an inflection point in this graph without an actual inflection point, I'd probably point to the steepening of the downslope of the curve around the millennium which doesn't seem to have much to do with leaving the gold standard or inflation being high.... Watching you pretend to understand the subject matter: https://www.youtube.com/watch?v=2WZLJpMOxS4 https://www.youtube.com/watch?v=2WZLJpMOxS4

somenameforme 4mo ago
I'm not the one arguing about definitions. You chose to take us down that path, adding a bunch of ad hominem while simultaneously misusing the terminology you were trying to be patronizing with. I 100% agree that it's completely inconsequential so long as we both understand what the other is saying, but I'm also trying to, within reason, respond to each thing you're stating. One major thing I'd emphasize here is that you're acting like the consequences of non-inflationary systems are speculative. The entire point of this discussion is we have a wealth of data to draw from, from both systems. With a non-inflationary system we have a system that was, more or less, stable over nearly 200 years through numerous catastrophic events. With the modern inflationary system we have something that already not only seems unsustainable, but is causing major societal issues after just 50 years of relative super-utopia. I say super-utopia because not only have we avoided anything on the scale of e.g. WW2, but it kicked off alongside the once-in-a-civilization super-economic boom of mass digitization that is now plateauing. So on the data issue - the way you determine an inflection point on a noisy graph is just to look at the midpoints of the noise and graph them. On the Fed's graph look at the slope of the midpoints from start to mid 70s, and then from the mid 70s to present. The brief spike at the dotcom bubble is just noise that gets smoothed out. For a comparable graph, with less noise, here [1] is a graph on labor's shares of gross domestic income. Again, you seriously can't miss the inflection point. For specific item prices, this [2] site is extremely interesting. I'm not fond of the author's overt partisanship, but his data is sound and eye opening. He's collected the price of Campbell's tomato soup over more than a century and graphed them. The fun thing about that is that they've been selling the same product in the same quantity, to a generally price sensitive customer, for well over a century. And so it helps give an image of raw price data over time in a way that aggregate measurements like CPI are often unable to do so. And again we see the exact same inflection point. It also gives some context of 40s inflation versus the modern system that we've created. [1] - https://fred.stlouisfed.org/series/W270RE1A156NBEA https://fred.stlouisfed.org/series/W270RE1A156NBEA [2] - https://politicalcalculations.blogspot.com/2026/01/the-price-history-of-campbells-tomato.html https://politicalcalculations.blogspot.com/2026/01/the-price...
- notahacker 4mo ago