Economy GOP back to Inflation worries. "Hyperinflation" (Update: 2022 Inflation Highest in 40 Years)

[Prefect]

OK, so you're just trolling. To anyone seriously interested in the subject, I think the answers are pretty clear.

Why does it bother you when I hand wave like you? You throw stuff out there that you would never accept from anyone else. You shit post but just disguise it. I suspect you like to think you are the smartest person in the room but often are just a 15 minute google expert who unlike most can put together sentences.

 

[Jack V Savage]

Why does it bother you when I hand wave like you? You throw stuff out there that you would never accept from anyone else.

It doesn't bother me. I was just taking the argument seriously, and providing actual reasoning and evidence because I thought it was a good-faith discussion. But your responses have indicated that you're more interested in blindly regurgitating propaganda regardless of what the truth is. That's pretty normal around here.

 

[Prefect]

It doesn't bother me. I was just taking the argument seriously, and providing actual reasoning and evidence because I thought it was a good-faith discussion. But your responses have indicated that you're more interested in blindly regurgitating propaganda regardless of what the truth is. That's pretty normal around here.

You don't post any evidence or anything that contradicts that inflation is occurring when nearly everything at Home Depot has drastically increased, people's Social Security is declining in purchasing power in spite what CPI says, and the money supply increased in an extremely dramatic way last year, three TRILLION dollars were floated out in 6 months during the pandemic. One of the reasons why the full effect of three trillion dollars hasn't been felt is because the economy has ground to a halt and the speed of money has slowed down. As soon as the economy starts back up, all that money will start changing hands and inflation will start to take hold. I am not even convinced that QE under Obama has sifted its way through the economy with it not being put into Joe Public's hands unlike the COVID stimulus. Things are ticking up and rate of change in CPI is one indicator. Investors like I said earlier with Warren Buffet are tracking their investments into things less affected by inflation. Michael Burry is calling it and he called the housing crisis and made billions. The housing market is running wild in part due to low interest rates and materials in drastically increasing in price that it is making existing homes more valuable. Bitcoin is surging in part as an inflation hedge. It is like you want to claim inflation is a non-issue but there are all these indicators and people are literally positioning themselves in preparation for it.

 

[rob mafia]

Most conservative Canadians and a lot of Americans I talk to regularly never stopped being worried over the governments printing money to solve problems at a rate never before seen.

But sure, it's "back to". Lol
We never stopped worrying about it. We in fact have had multiple threads on it here over the last year.

even in the stonks threads, many voiced this as well.

if op truly thinks righties weren't always wary of this, op is truly clueless.

 

[ElKarlo]

Housing is going to be awful soon enough. Big finance like Black Rock is buying houses for cash. I am from the DC area. My parents bought their house in 1987 for 147K or so. I looked at Red Fin now and my old house is worth 506K. No one will be able to afford housing. And The Hill is right, the govt solutions is more finance, which leads to more speculation and this leads to crazy housing bubbles.

 

[Halifax]

Housing is going to be awful soon enough. Big finance like Black Rock is buying houses for cash. I am from the DC area. My parents bought their house in 1987 for 147K or so. I looked at Red Fin now and my old house is worth 506K. No one will be able to afford housing. And The Hill is right, the govt solutions is more finance, which leads to more speculation and this leads to crazy housing bubbles.

Houses in nova scotia are selling for 50 to 100k over their asking price currently. Nothing decent available lasts more than a day on the market. People are not even going to view houses, they just buy them.

 

[ElKarlo]

Houses in nova scotia are selling for 50 to 100k over their asking price currently. Nothing decent available lasts more than a day on the market. People are not even going to view houses, they just buy them.

Yeah, it seems endemic. Private equity and other financial institutions are buying everything up as a inflation hedge imho. It’s too by to make it near impossible for for house formation. Which will have huge knock on effects as people don’t start families. Just seems like something that shouldn’t be allowed

 

[Scheme]

Anyone want to bet on whether this guy did any research at all before making this post? Like even looking up cash holdings by people with "any wealth at all" (needs a definition for that) over time? Pushing past that, you're talking about investments that people expect to make more money than nothing. Even if people are expecting deflation, they're still going to invest in different assets. You're not seeing anyone talking about hyperinflation actually positioning themselves to benefit from it. You can just go to FRED and look up inflation expectations from the market. I'll do it for you, since the idea of looking stuff up rather than just appealing to hackery is alien to you guys:

We actually do see a rise in inflation expectations! All the way up to 2.36%! Scary. Is it possible that the collective expectation set by bond investors is wrong? Sure. Probably is, in one direction or the other. But is it a much better guess than one made by an anonymous message-board poster with no relevant knowledge, no significant skin in the game, poor thinking skills, and who regularly makes bold claims without bothering to do any research? Definitely.

https://educationdata.org/average-cost-of-college

Real education costs have risen 560% for public 4 year colleges

https://www.inflationtool.com/us-dollar/1960-to-present-value
$1 in 1960 is worth $8.86 today, an increase of 886%
https://www.thebalance.com/causes-of-rising-healthcare-costs-4064878
Healthcare costs in 1960 were $147, they are now $11,172, an increase of 7700% with inflation
So real healthcare costs have gone up ~860%, or ~14.3% a year.

Case-Shiller National Home Price Index vs Consumer Price Index shows that repeat sales of homes always outpace CPI by >0.45% every month since the index was established, and that number is growing at a rapid pace recently:
https://fred.stlouisfed.org/graph/?g=786h (make sure you slide it to 2021)
Note that that index only tracks resales of homes (which generally tend to sell for less than new constructions, so that number underrepresents home inflation). Also worth noting the housing crash in 2008 was pretty much the only reason we haven't skyrocketed further

 

[Jack V Savage]

https://educationdata.org/average-cost-of-college
Real education costs have risen 560% for public 4 year colleges

https://www.inflationtool.com/us-dollar/1960-to-present-value
$1 in 1960 is worth $8.86 today, an increase of 886%
https://www.thebalance.com/causes-of-rising-healthcare-costs-4064878
Healthcare costs in 1960 were $147, they are now $11,172, an increase of 7700% with inflation
So real healthcare costs have gone up ~860%, or ~14.3% a year.

Case-Shiller National Home Price Index vs Consumer Price Index shows that repeat sales of homes always outpace CPI by >0.45% every month since the index was established, and that number is growing at a rapid pace recently:
https://fred.stlouisfed.org/graph/?g=786h (make sure you slide it to 2021)
Note that that index only tracks resales of homes (which generally tend to sell for less than new constructions, so that number underrepresents home inflation). Also worth noting the housing crash in 2008 was pretty much the only reason we haven't skyrocketed further

Um, OK. So anyway, the best guess about future inflation is the 10-year breakevens. That does show some growth but from a very low level to a still fairly low level. Anyone who thinks they know more than the market should think about why that might be, and if you want to convince anyone else (other than like-minded zombies), maybe show a track record of getting it right when markets were getting it wrong, preferably with a large enough sample to be meaningful.

 

[Scheme]

Um, OK. So anyway, the best guess about future inflation is the 10-year breakevens. That does show some growth but from a very low level to a still fairly low level. Anyone who thinks they know more than the market should think about why that might be, and if you want to convince anyone else (other than like-minded zombies), maybe show a track record of getting it right when markets were getting it wrong, preferably with a large enough sample to be meaningful.

How is (all inflation adjusted) decades worth of 14% yearly healthcare cost increases, 10% yearly education cost increases and 5-9% yearly housing cost increases not insane growth? Especially given these are the most expensive things that Americans will spend their money on. On top of that you have the government stated inflation and stagnating wages.

And people have gambled against the USD and won big time, look at stock, rare metals, housing and cryptocurrency. People seem to have more trust in fabricated internet money than the USD (and other country's currencies). And stock in companies is a good way to hedge yourself since all the money that is printed generally tends to funnel straight to big companies (whether intentional or not).

 

[Jack V Savage]

How is (all inflation adjusted) decades worth of 14% yearly healthcare cost increases, 10% yearly education cost increases and 5-9% yearly housing cost increases not insane growth? Especially given these are the most expensive things that Americans will spend their money on. On top of that you have the government stated inflation and stagnating wages.

It's an unrelated point, for one thing. We're talking about expected inflation (which is a general rise in prices), and you're talking about specific, past price increases.

And people have gambled against the USD and won big time, look at stock, rare metals, housing and cryptocurrency. People seem to have more trust in fabricated internet money than the USD (and other country's currencies). And stock in companies is a good way to hedge yourself since all the money that is printed generally tends to funnel straight to big companies (whether intentional or not).

People have not gambled on high inflation, though, because there is no good reason to expect high inflation going forward. We've been struggling with low inflation for a long time, and current policy should be understood against that background. We're still not doing enough to break out of that, but as the breakevens show, we're making some small progress.

 

[The XL]

Nobody ever questions the Federal Reserve which controls your country. You had one president who tried to free the United States from its grip, which ended up costing him his life.

Somebody gets it

 

[Scheme]

It's an unrelated point, for one thing. We're talking about expected inflation (which is a general rise in prices), and you're talking about specific, past price increases.



People have not gambled on high inflation, though, because there is no good reason to expect high inflation going forward. We've been struggling with low inflation for a long time, and current policy should be understood against that background. We're still not doing enough to break out of that, but as the breakevens show, we're making some small progress.

There hasn't been low inflation. You only think there's low inflation because the government intentionally uses bad metrics to track it. The money supply has increased significantly (especially the past year) and major expenditures have been consistently increasing at alarming rates despite "low inflation".

And the reason I (and many more) are skeptical is because spending has been exponentially increasing, no where near keeping up with actual production of goods and services. And with the coming generation of seemingly inevitable democratic socialism at the horizon, reasonable spending is going to go right out the door.

 

[Jack V Savage]

There hasn't been low inflation. You only think there's low inflation because the government intentionally uses bad metrics to track it. The money supply has increased significantly (especially the past year) and major expenditures have been consistently increasing at alarming rates despite "low inflation".

And the reason I (and many more) are skeptical is because spending has been exponentially increasing, no where near keeping up with actual production of goods and services. And with the coming generation of seemingly inevitable democratic socialism at the horizon, reasonable spending is going to go right out the door.

You mean I only think there's been low inflation because all measures of inflation (public and private) have shown that it's very low.

Also, note that your position that inflation has been rising more quickly than the evidence shows it has is inconsistent with your previously stated bullishness on the economy. For example, in response to someone pointing out that 2018 GDP growth was 3%, you said:

GOAT president of all time

bizarrely attributing the growth to the president. But if inflation was higher than the numbers show, that means growth was lower (and if it was more than 300 bps higher, that means growth was negative). Also, remember that economic growth correlates with a lot of other measures (like employment growth). So if the inflation measure (note that the GDP deflator isn't exactly the same as CPI, but the calcs are related) were materially wrong, we'd see that show up in a lot of other areas, but we don't (as I've pointed out earlier, what we actually know is that CPI overstates inflation by a little).

 

[MeatheadMike]

Housing is going to be awful soon enough. Big finance like Black Rock is buying houses for cash. I am from the DC area. My parents bought their house in 1987 for 147K or so. I looked at Red Fin now and my old house is worth 506K. No one will be able to afford housing. And The Hill is right, the govt solutions is more finance, which leads to more speculation and this leads to crazy housing bubbles.

In the NY suburbs its even worse. A modest 2000 sq ft house will be listed around $900K (with around $20K/year in taxes), and probably be sold over asking. But this seems mostly to do with COVID rather than inflation.

People have been working from home and wanting to move out of their city apartments, plus those already in small homes are looking to upsize to larger homes because they want home office rooms. The increased demand is unable to be met because there's not much space around this area to build new construction. Low interest rates are exacerbating this situation, but the large jump in home prices around here started happening around last spring when Covid and the lockdowns started.

 

[ElKarlo]

In the NY suburbs its even worse. A modest 2000 sq ft house will be listed around $900K (with around $20K/year in taxes), and probably be sold over asking. But this seems mostly to do with COVID rather than inflation.

People have been working from home and wanting to move out of their city apartments, plus those already in small homes are looking to upsize to larger homes because they want home office rooms. The increased demand is unable to be met because there's not much space around this area to build new construction. Low interest rates are exacerbating this situation, but the large jump in home prices around here started happening around last spring when Covid and the lockdowns started.

DC area is pretty bad. My parents house is far from the actual city. If you get any closer, you are talking about 600K townhouses and like your example, close to a million dollar regular sized houses.

But if the lockdowns caused this, who is making enough to make enough to be able to buy a house for cash? It is PE and other financials

 

[cottagecheesefan]

 

[Hadron90]

People have not gambled on high inflation, though, because there is no good reason to expect high inflation going forward.

You understand that stock market and crypto market are both at all time highs right now, right? Stocks soared all last year in the middle of pandemics and nationwide race riots. Why? Because no one wants to hold a single cent in USD. If you give a rich person $10 right now, he will immediately turn it into a stock.

 

[Jack V Savage]

You understand that stock market and crypto market are both at all time highs right now, right? Stocks soared all last year in the middle of pandemics and nationwide race riots. Why? Because no one wants to hold a single cent in USD. If you give a rich person $10 right now, he will immediately turn it into a stock.

Stocks (rationally) soared when it was clear that we'd have a strong fiscal response to the downturn. We're set for a big boom now. See above. If there were any reasonable expectation of hyperinflation, you'd see it reflected in debt markets. But you don't. Since I know you won't put your actual money where your mouth is, why don't we make a sig bet? What do you expect inflation to be over the next 12 months (or whatever time frame it is that you're saying markets are getting it wrong about)?

 

[SakurabasEar]

Stocks (rationally) soared when it was clear that we'd have a strong fiscal response to the downturn. We're set for a big boom now. See above. If there were any reasonable expectation of hyperinflation, you'd see it reflected in debt markets. But you don't. Since I know you won't put your actual money where your mouth is, why don't we make a sig bet? What do you expect inflation to be over the next 12 months (or whatever time frame it is that you're saying markets are getting it wrong about)?

I think the uptick in stocks had more to do with market stability post trumps trade war with china.

I don't believe we're going to see any noticeable inflation for 2 or 3 years. So in that aspect, i agree with you.