20-30?
E.g. most if not all asset prices are up by way more than that...
Also, McChickens are $1.50 now when they used to be $1 just a year ago.
Also know in my hometown fast-food places are paying like 20-30% more/hr. Like 11-14, pretty surprising.
Just wondering cause I have a lot of cash that I didn't invest in the market because I didn't know where to put it (eg recent paychecks). Don't know what to do with it but I know inflation is probably pretty bad rn. Thoughts?
Also, whether my salary should get more of a bump considering. Don’t really know how to judge these things honestly.
Yeah, it's tough to say. I think those of us who have mortgages have made out like bandits in the last year with our fixed payments and inflated dollar devaluing our debt. So it's a good time to have a mortgage. On the other hand, apparently building supplies (steel, lumber) have gotten so expensive and, in general, hard to come by that homebuilding in some groups is grinding to a halt.
Let's be real--the world's Covid policy has been arguably the worst set of policies in human history. The first world has piled on debt that will be paid back over centuries, stealing unbelievable sums of wealth from future generations, and to what end? It's clear that lockdowns don't even work (and yet many European nations are still at it). The huge sums of money printed to bail out the public and then the Covid supply shortages are making common people poorer and rich people much richer. My net worth nearly doubled in the last 12 months or so--I do well enough that I don't even pay attention to milk prices. But the common person who cares about grocery prices is being really hurt, and the world is in total denial over it.
I just had some reno work done to my house. My contractor said he would not build a new house for someone right now for two reasons: 1) The actual cost for new residential construction right now is so high that the client would likely turn it down once they saw his estimate (a single 2x4 is like $9 right now); 2) He's not sure he would even be able to secure all of the materials to build the house in a timely manner and doesn't want to expose himself to not being able to deliver on a bid. Absolute insanity out there.
Genuinely asking: what do you think the governments should have done instead? I'm saying that because:
1. Yes, printing money has increased inequality. But NOT printing it would tank the economy - the velocity of money would drop too much due to unemployment, creating a downward spiral -, right?
2. Yes, locking the countries down was definitely not good for the economy. But what else could be done if you have this highly contagious and potentially deadly virus - it's not Ebola but it's not a common cold either - around?
Not trying to argue or anything. Those are not rhetorical questions. I do want to know the answers.
I think the point he's making is that the lockdowns themselves didn't do much. If the lockdowns ended the pandemic, I'm sure nobody would be able to complain that there was an economic cost. But the fact is, we've been put under lockdown for a year and that decision doesn't seem to be justified considering the current state of affairs. Also, some of the measures taken have been completely counterintuitive. For example, why would someone ban outdoor fitness when the data show that outdoor spread is incredibly rare, and that vitamin d and exercise can greatly strengthen one's immune system?
Not a downward spiral. Economies get hit and economies recover themselves unless you do something profoundly stupid. This is basically how things worked for 200 years until we started believing that every recession warrants trillions in bailouts and no one is ever supposed to feel the least bit of discomfort.
Also, we're not really avoiding the pain here. We're just postponing things for a much bigger fiscal crisis in the future.
Either provide material studies or information that lockdowns work (read: decrease mortality rates) or just give it a rest. It has been over a year now, the burden of proof is on those who are calling for lockdowns given the consequences they have on society.
Inflation isn't anywhere close to 20%. That would mean an average person's standard of living has been cut in half over the past 4 years. Yes, there are certain areas where we are seeing supply issues contribute to high price levels (I'm not talking about asset prices either - that is not inflation. Assets are supposed to go up in price). No, we are not seeing high general inflation (yet?)
The only way you can argue that inflation isn't a problem is if you narrowly focus on some academic, artificial and arbitrary calculation ("core inflation," which is inarguably a complete waste of a metric).
Grocery prices were up markedly in 2020 and so far in 2021 (3.9% and 3.6%, respectively).
https://www.usinflationcalculator.com/inflation/food-inflation-in-the-u…
Gasoline prices are up 21% year over year.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte…
Home prices were up 9.8% in 2020.
https://dqydj.com/historical-home-prices/
For average people, these are devastating figures. And even for homeowners, rising prices don't mean all that much since when they sell an inflated house they repurchase a new house at an inflated price. Inflated home prices really hurt young people who are trying to form new households.
The harsh reality is our Covid policies were a complete failure. The arrogance of elected officials to believe that they could stop the spread of a HIGHLY contagious airborne virus that was rapidly spreading throughout the world by shutting down the global economy and printing incomprehensible sums of money to limited economic impact is sick. It's completely sick. The "smartest people in the room"--once again--proved to be completely incompetent.
This happens every 10-15 years--2020, 2008, 1999, 1987, and so on. We simply do not learn from our mistakes that trusting the economy to pinhead Ivy League graduates will only end in disaster. The Ivy League produces the world's worst human beings--being educated beyond commonsense and exhibiting the kind of pride that the devil himself would bathe in is a terrible combination.
I'm in my mid twenties and starting off my career and I honestly don't know how I'll be able to afford a house in Los Angeles.
You basically need $1 MN to afford a 800-1100 square foot 2 bed 2 bath bungalow or condo and $1.2 million if you want a 1200+ square foot house with more than 2 bedrooms and bathrooms. I have family in Boston and it's a little less pricy on the lower end there but the middle to high end is right up there with tier 1 cities.
On top of all of this salaries are decreasing. I interviewed at an endowment in Boston and they cut the analyst salary from $70k pre COVID to $60k despite rent staying relatively stable compared to pre COVID levels in the areas I was looking.
How is anyone supposed to build a life, save for a down-payment, etc. with all of this?
I realize that I'm lucky to have the opportunity to interview for these opportunities and an education that will likely give me a higher floor in terms of lifestyle than others, however it's just made me realize that people making under $40k don't stand a chance to build anything for themselves in a city. They'll always be forced to rent or leave while saving nothing and may not even be able to retire.
The most underappreciated comment on here.....sadly I don't think 80% of posters understand the concept of inflation. It is a rise in the general price level.....it is not prices going up due supply shocks which happen to affect many goods i.e building supplies and gasoline etc.
When you should be really worried is when the price of a tube of toothpaste at the store goes up 5% with absolutely no connection to a supply shock. That's real inflation!
Congrats rezjopls , your econ professors would be proud!
We added 40% to the money supply in 1 year and half the nation is still in lockdown-lite with Canada in total lockdown and much of Europe still in lockdown. Just wait until North America and Western Europe re-awakens as they are awash in cash. Some price increases are supply-shocks, but that's not why real estate and grocery prices have spiked. You inflation ostriches are attempting to explain away every bit of bad inflation news with a specific explanation for each good or asset that is rising in price, but when everything is rising fairly dramatically maybe one has to look at the money supply as at least a potential cause of the rise in prices.
If you're looking for inflation plays, take a look at gold streamers like FNV and OR. These guys basically fund mine development in exchange for a royalty or cut of the production. Compared to the actual producers themselves (i.e. gold miners), you still get the asset price tailwinds (assuming you believe inflation is coming/here) but you don't get hit with input cost inflation too (gold miners need lots of materials to mine which will also rise with inflation; gold streamers' main costs are white collar labor which will not, at least not to the same degree).
I’m seeing the same thing. Went out this weekend, and the price of a chocolate cheesecake slice at our local cheesecake shop was up from a year ago $10 to $15 today. And they’re automatically charging tips to waiters ranging from 20-30%, which wasn’t even a thing a year ago. Like wtf.
I live in LA and bought clothes recently.
They charged me 10% sales tax, a 3% city tax and a 2% living wage tax for the employees. Have also seen a lot of other small businesses charging living wage taxes so they can pay their hourly employees more.
lol living wage tax!!! just increase the price wtf?
Cheese cake is rly good tho gotta pay it
it is lol. But fuck inflation tho
Wouldn't that probably be because they're trying to survive less demand, not necessarily increased material costs for them?
No, conventional economics would tell you that if you're seeing less demand, you lower your prices to attract demand. In this case, they're seeing demand AND raising prices substantially
McChicken's are still 2 for two dollars my dude.
Check back in a couple of weeks my man
Inflation is easily over the reported rate from the goverment. It's likely closer to 10% this year (if not more). The government does not want to report 10% inflation as this will cause panic, so they pretend its lower and base their calculations off milk, eggs, and socks.
House prices are up more than reported inflation: fact
" home prices increased 1.3% on an adjusted basis in December compared with November and were up 10.4% compared with December 2020, according to the S&P CoreLogic Case-Shiller home price index.
That’s the largest year-over-year gain since 2013."
Car prices up more than reported inflation: fact
"The price of an average new vehicle jumped 6% between January of last year, before the coronavirus erupted in the United States, and December to a record $40,578, according to data from Edmunds.com.
Yet that increase was nothing next to what happened in the used market. The average price of a used vehicle surged nearly 14% — roughly 10 times the rate of inflation — to over $23,000. It was among the fastest such increases in decades, said Ivan Drury, a senior manager of insights for Edmunds.com."
Restaurant prices up more than reported inflation: fact
"In January, prices for food away from home—or menu prices—increased 3.9% year-over-year. That was the same rate as in December. That is also the highest rate for menu price inflation since late 2008, when the country was in a deep recession."
Not even going to show proof for healthcare cost increases outpacing inflation (thats a commonly accepted view): Fact
Groceries up more than inflation: fact
" 2020, the COVID-19 pandemic sent food prices up by 3.3%. Most of this was driven by a 4.4% increase in meat, fish, poultry, and eggs. Dairy products, up 3.8%, were also a substantial contributor to the rise." (this is direct from the government by the way)
What else do we spend money on? How is inflation 1.8% as reported by the government?
Exactly. Inflation is low except for housing, food, fuel, transportation, and healthcare. Other than that, the USD is as strong as gold. Trust us.
Hah well said. It's a scary world we have turned to, but is this not MMT basically? Inflation is sneaky higher (btw Apple icloud storage is $.29 more too, netflix etc always sneaking an addition). That said as mentioned you have a mortgage you won on, so the "sustainable debt" individuals have is easier to get and maintain but therefore they are spending more money and the pandemic has finally forced those services (restaurants, bakeries, etc) that were getting killed for years to squeeze everyone. While Amazon/Costco/etc pushing fully bulk and online has kept the most important things to live at a lower cost.
Everyone is just running a massive LBO and its working out for now.
I mostly agree that prices are soaring for many items but home prices were going up 10% per year from 2000-2007 and overall inflation still remained around 2%. Far from an economist but inflation could be 2% because other items like air travel, hospitality, rental rates, and clothing have remained steady or dropped this past year. In addition, an increase in average new car prices is partially explained by car manufactures abandoning low-cost models and embracing SUVs and in each model adding new features (heated seats, iPad dashboard, rear-view cameras). If we see increases in the production of building materials and home construction, home prices could go back to a 2-3% growth rate in a few years.
The law of supply and demand is immutable. Repeat that over and over again. Why did prices increase so rapidly in the mid-2000s? Because of the supply of money. People could get 0 down loans with no income. That is no different in practical affect on prices than if you add 40% to the money supply, push rates down to practically nothing and push investors into purchasing SFH to achieve yield outside of the bond market. Government policies are directly impacting home prices. It is inflation caused by government policy, and just because it doesn't fit into some arbitrary academic model doesn't mean it isn't real.
Inflation is calculated using CPI which is supposed to be a “typical basket of goods and products” purchased by the average consumer. I’d be willing to bet that the elites making these calculations have every day items take up a far less percentage of expenses that what is usual for the every day American leading to inflation rates that absurdly underestimate reality. That or flat out lying to control the narrative of the “Biden Boom”.
Also, that CPI figure is still up many times year over year (I think it's something like 1.7% vs 0.1%), it just rose from practically nothing to a small amount. But it is still inflation.
Market indexes, Tesla, real estate, and cryptocurrency. Also, working on my own start-up, so I get to blow thousands of dollars "investing" in that.
SPY, QQQ and non FAANG tech stocks.
Real assets. Question is do you think Crypto is a real asset or not...
I personally think it is.
Even a few months ago, I completely didn't agree with the underlying principles of crypto, despite being an investor. I do now. Given that the Western governments are completely out of control with their spending, I think there is a real future in crypto as a true medium of exchange. I don't know how I feel about BTC being that means, but I do think that its shortcomings are hurdles that can be surmounted by creative technology.
based on obesity #'s, I'd say in the waist and hipline
https://www.washingtonpost.com/health/most-american-adults-are-overweig…
If we keep pushing inflation, doesn't the fed have to raise rates per the mandate? My imagining is that if they raise rates, things will start to stabilize.
My fear is that rates will stay at 0 for at least 2-3 more years and the inflation will compound
Garbage-in, garbage-out. If you raise rates only in response to a garbage definition of inflation then asset prices can spiral out of control with continued low rates.
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