Economy Will people be able to survive

[Jack V Savage]

I’m not!

I don’t think I’d be able to predict the exact rate in a year but maybe “3 months or less of 6% or less during the next 12 month period”

That would just be the cumulative total for the whole year. And a minimum rather than an exact rate. How about I give you a more-favorable one that I like better because it minimizes the early celebration? Average YOY growth from July-Sept. 2023 <6% for me, >6% for you (we'll go into however many decimal places needed to avoid exactly 6%).

 

[Sano]

No, it's getting worse. Interest rates are rising so everything is slowing down temporarily but inflation is a big problem and it isn't going away. It doesn't get better from here and savers, retirees and working people will be getting slaughtered because of it.

Isn't the fed raising rates one of the main tools government has in managing inflation?

 

[Rob Battisti]

That would just be the cumulative total for the whole year. And a minimum rather than an exact rate. How about I give you a more-favorable one that I like better because it minimizes the early celebration? Average YOY growth from July-Sept. 2023 <6% for me, >6% for you (we'll go into however many decimal places needed to avoid exactly 6%).

Just trying to follow there. What we did before was average YOY growth in those terms? I’m just trying to follow.

 

[Jack V Savage]

Just trying to follow there. What we did before was average YOY growth in those terms? I’m just trying to follow.

Yeah, the other system was badly designed because each month is mostly riding on previous months. Just cleaning it up a bit. This bet is pretty straightforward--if you think it's going to go up 6% over the upcoming year (and I'm even spotting you a good YOY comp since we had no net inflation at all in July), your side is a likely winner. If not, mine is.

 

[Jack V Savage]

Isn't the fed raising rates one of the main tools government has in managing inflation?

The main tool. Raising taxes/cutting spending could also do it, though the Fed could counteract those.

 

[tenniswhiz]

The idea of gold as an inflation hedge has been debunked by many. The correlation just doesn’t exist. I don’t know why the claim is made in the first place.
If you know your technicals, maybe gold could be a great buy at bargain basement prices, but $1800/oz is no bargain. And the 1 oz coin is nearly 2k. One hell of a premium.

Bitcoin is worth whatever people are willing to pay. Maybe the bottom will drop out sometime. But for savvy investors, the volatility can have a huge upside.
It has no intrinsic value, and it’s not a “store of value”, as some would like you to believe. But you could make a lot of money with it with a little bit of luck or skill.
That Binance Coin, on the other hand, is intriguing.

 

[Eric Silva 2.0]

Isn't the fed raising rates one of the main tools government has in managing inflation?

Yes, but interest rates have to be above inflation rate to do that. They are slowing down the rate of inflation but it's still getting worse. Think of it as an auto-immune disease. You can take medication to slow it down but it is still progressing (Multiple Sclerosis for example...unfortunately, I am very familiar with that one).

 

[Eric Silva 2.0]

No, you didn’t say that. You said it was getting worse. Which it is not. There is nothing more to it, I don’t know why you keep fighting me on that.

"I don't know why you keep fighting me on that"
We aren't fighting. For me it is disagreeing. I don't think you understand inflation. I told you the communication wouldn't be productive if you don't understand inflation. Your graph doesn't provide any clarity. There is nothing more to say here.

 

[Eric Silva 2.0]

The idea of gold as an inflation hedge has been debunked by many. The correlation just doesn’t exist. I don’t know why the claim is made in the first place.
If you know your technicals, maybe gold could be a great buy at bargain basement prices, but $1800/oz is no bargain. And the 1 oz coin is nearly 2k. One hell of a premium.

Bitcoin is worth whatever people are willing to pay. Maybe the bottom will drop out sometime. But for savvy investors, the volatility can have a huge upside.
It has no intrinsic value, and it’s not a “store of value”, as some would like you to believe. But you could make a lot of money with it with a little bit of luck or skill.
That Binance Coin, on the other hand, is intriguing.

"The idea of gold as an inflation hedge has been debunked by many, Bitcoin is worth whatever people are willing to pay, It has no intrinsic value, and it's not a store of value"
There's a lot to unpack here. I would say gold is a store of value and it is good to protect against inflation but it definitely doesn't correlate to inflation in the short term. It is also good for deflation (in a country with fiat currency). Gold did well during the Great Depression. I do agree if inflation heats up you are not guaranteed to make money short term on gold. Understanding technical analysis/fundamental analysis is helpful (i'm a chartist/technician). Bitcoin is a speculative asset. It is too new and doesn't have history to make a claim on anything yet (IMO). As far as intrinsic value, there is no such thing, it doesn't exist. I hope you didn't learn intrinsic value in an economics class and believed it. What do you mean by intrinsic value?

 

[Jack V Savage]

Yes, but interest rates have to be above inflation rate to do that. They are slowing down the rate of inflation but it's still getting worse. Think of it as an auto-immune disease. You can take medication to slow it down but it is still progressing (Multiple Sclerosis for example...unfortunately, I am very familiar with that one).

Very sorry to hear about your condition. Can't imagine. But you will at least be happy that you're wrong about inflation. Raising rates just reduces borrowing and reduces overall spending, which brings inflation down. No magical connection between CPI and rates.

 

[SummerStriker]

The idea of gold as an inflation hedge has been debunked by many. The correlation just doesn’t exist. I don’t know why the claim is made in the first place.
If you know your technicals, maybe gold could be a great buy at bargain basement prices, but $1800/oz is no bargain. And the 1 oz coin is nearly 2k. One hell of a premium.

Bitcoin is worth whatever people are willing to pay. Maybe the bottom will drop out sometime. But for savvy investors, the volatility can have a huge upside.
It has no intrinsic value, and it’s not a “store of value”, as some would like you to believe. But you could make a lot of money with it with a little bit of luck or skill.
That Binance Coin, on the other hand, is intriguing.

I don't understand why crypto has any value. It is just marketing and hype, but there isn't a fundamental reason for it to have any price, and a huge portion of that price is set by institutional investors. I think the whole thing is just a Ponzi scheme.

 

[Eric Silva 2.0]

Very sorry to hear about your condition. Can't imagine. But you will at least be happy that you're wrong about inflation. Raising rates just reduces borrowing and reduces overall spending, which brings inflation down. No magical connection between CPI and rates.

Not me I'm healthy, but someone I loved very much had multiple sclerosis who passed years ago. I didn't say anything about the CPI. I really don't pay much attention to government stats. Most are not very accurate.

 

[Eric Silva 2.0]

I don't understand why crypto has any value. It is just marketing and hype, but there isn't a fundamental reason for it to have any price, and a huge portion of that price is set by institutional investors. I think the whole thing is just a Ponzi scheme.

If you learned economics in a college you probably wouldn't put any value on bitcoin and missed out on the great run. When you say fundamental reason for it to have a price, what do you mean? What do you mean by fundamental?

 

[SummerStriker]

If you learned economics in a college you probably wouldn't put any value on bitcoin and missed out on the great run. When you say fundamental reason for it to have a price, what do you mean? What do you mean by fundamental?

I believe that asset prices are mostly rational, and that the best fit line all the way through stock market valuation history is mostly explained by the risk free rate and dividends. There are momentary lapses of rationality, which is why "momentum" is considered a factor in stock market valuation, but you can make a perfectly rational guess that the future will be better than the past, more productive, and have higher dividends, justifying a bet on market beta, at least.

But there are lots of things that have idiosyncratic risk that can pay off big, like you buy a house in a shithole that turns into the next silicon valley, or you buy a scratch off lotto ticket and hit it big, or you buy some random internet meme shit like BTC / Ethereum, and it turns out to pay out when most other pick six bets didn't. That's ok. Even counting the winners, it still isn't rational to make bets on all these random assets, especially when their value is even further from reality than pokemon cards because cards can have real sentimental value.

If I but a total stock market index, I can say I think the future will be better than the past, with higher dividends. If I buy BTC, I can have a story about how some other sucker will buy it from me for more, but I can't say why they will do it other than hype. So maybe I'm right. Maybe my birthday is the next mega millions numbers. Who knows.

 

[Jack V Savage]

Not me I'm healthy, but someone I loved very much had multiple sclerosis who passed years ago. I didn't say anything about the CPI. I really don't pay much attention to government stats. Most are not very accurate.

Glad to hear you're healthy, and sorry about your loss. What alternate measure are you looking at when you say CPI is not accurate?

 

[Rob Battisti]

The amount of BTC ignorance ITT is amazing

 

[Eric Silva 2.0]

I believe that asset prices are mostly rational, and that the best fit line all the way through stock market valuation history is mostly explained by the risk free rate and dividends. There are momentary lapses of rationality, which is why "momentum" is considered a factor in stock market valuation, but you can make a perfectly rational guess that the future will be better than the past, more productive, and have higher dividends, justifying a bet on market beta, at least.

But there are lots of things that have idiosyncratic risk that can pay off big, like you buy a house in a shithole that turns into the next silicon valley, or you buy a scratch off lotto ticket and hit it big, or you buy some random internet meme shit like BTC / Ethereum, and it turns out to pay out when most other pick six bets didn't. That's ok. Even counting the winners, it still isn't rational to make bets on all these random assets, especially when their value is even further from reality than pokemon cards because cards can have real sentimental value.

If I but a total stock market index, I can say I think the future will be better than the past, with higher dividends. If I buy BTC, I can have a story about how some other sucker will buy it from me for more, but I can't say why they will do it other than hype. So maybe I'm right. Maybe my birthday is the next mega millions numbers. Who knows.

You used fundamental before, I just wanted to know what you meant. You are talking about the stock market with a 'rational' value and I would agree. It just seems you are a bit all over the place. I did say Bitcoin is a speculative asset (IMO). It therefore is very hard to value. I believe in Classical/Austrian Economics. Paper money has no value to me but bitcoin is worth a try. The fact that it can be sent over boarders cheaply has value to a lot of people (think Western Union/wires etc...). It is a new form of money. Bitcoin is better than any paper money out there right now including the dollar and euro.

 

[Eric Silva 2.0]

Glad to hear you're healthy, and sorry about your loss. What alternate measure are you looking at when you say CPI is not accurate?

I'm assuming you are aware that the CPI calculation has been changed over the years. The government lies so the increases are lower to things like Social Security. I follow other stats and make my own estimates which put it a little over 15% for me right now.

 

[Eric Silva 2.0]

I believe that asset prices are mostly rational, and that the best fit line all the way through stock market valuation history is mostly explained by the risk free rate and dividends. There are momentary lapses of rationality, which is why "momentum" is considered a factor in stock market valuation, but you can make a perfectly rational guess that the future will be better than the past, more productive, and have higher dividends, justifying a bet on market beta, at least.

But there are lots of things that have idiosyncratic risk that can pay off big, like you buy a house in a shithole that turns into the next silicon valley, or you buy a scratch off lotto ticket and hit it big, or you buy some random internet meme shit like BTC / Ethereum, and it turns out to pay out when most other pick six bets didn't. That's ok. Even counting the winners, it still isn't rational to make bets on all these random assets, especially when their value is even further from reality than pokemon cards because cards can have real sentimental value.

If I but a total stock market index, I can say I think the future will be better than the past, with higher dividends. If I buy BTC, I can have a story about how some other sucker will buy it from me for more, but I can't say why they will do it other than hype. So maybe I'm right. Maybe my birthday is the next mega millions numbers. Who knows.

"If I buy BTC, I can have a story about how some other sucker will buy it from me for more"
I have sold some bitcoin and other cryptos a few times already. I've been in crypto for approx 6 years now. I don't know if the people who bought from me are suckers though. If bitcoin goes to a million a coin are they a sucker? It's hard to value. If you live in Argentina, Venezuela, Zimbabwe, Nigeria, Cuba, Turkey, Sri Lanka, etc..., do you think the people putting their money in bitcoin are suckers or should they save in local currency?
Here is a hint before you answer........

 

[SummerStriker]

"If I buy BTC, I can have a story about how some other sucker will buy it from me for more"
I have sold some bitcoin and other cryptos a few times already. I've been in crypto for approx 6 years now. I don't know if the people who bought from me are suckers though. If bitcoin goes to a million a coin are they a sucker? It's hard to value. If you live in Argentina, Venezuela, Zimbabwe, Nigeria, Cuba, Turkey, Sri Lanka, etc..., do you think the people putting their money in bitcoin are suckers or should they save in local currency?
Here is a hint before you answer........

If that is who is ultimately going to use it, that's how valuable it will be.