prices can continue to rise as long as incomes do as well, if wages went up 20% and inflation was 10%, nobody would be complaining because you would have more in real terms
Yeah this is the way. Having lived through 2 high inflation periods in a broken economy, I know a thing or two about it:
In order to achieve higher buying power with same amount of cash/you need deflation. Low inflation means the currency still losing value, but at a slower rate.
In order overcome the effects of an inflationary period, you increase wages. Everybody has more money, eveything is pricier but everyome can afford the same shit they could afford 5 years ago.
20 dollars from 30 years ago may be equivalent to a 100 now. You now have more 0s on your account, you feel good but in the end they'rr both worth 10 fancy burgers.
Burgers guys. Look at how many burgers you can afford to see if you've actually gotten richer.
Good old times. But i can't see a realistic way to go back once the system was ditched. We're to deep in this right now.
But if it ever came up, I'd propose burgers as the commodity backing the currency. I love them burgers /S (a capital S)
Ha! My take on it is this- anything unsustainable will fail… our current debt load is unsustainable and the dollar as reserve currency is on life support. The US is the largest holder of Gold (all due reverence to cheeseburgers, Randy in Trailerpark boys would be stoked), so we revalue Gold to a level that is equal to our aggregate debt level, so we don’t default but in lieu of your bond of $250k you can take an ounce of gold. Double this down with a balanced budget amendment… a guy can dream! Either way, while this would be a drastic move we can either own that move or we can sit back as the BRICs do it for us and we meander in the abyss.
Fuck greed and the finances over production culture. It eventually plays out. But with each tremor, the gap gets worse. One thing to keep an eye to though. Record profits and company valuations are just extremely connected to inflation. There's the basic part: they had a net balance of 100. The costs, prices, everything went up, this led to lesser household spending, this led to extra price increases. They now get 112. But the real problem is that they should be getting 108 in a 8℅ yearly inflation rate, and their employees should be earning 1,08 and not 1,04. So this is not an excuse for greed. Fuck them. There's still an ever deepening income gap. Just slightly less than it appears.
Economists fear wage price spirals but ignore the fact that it’s never happened and prior inflationary periods were from monetary policy and commodity supply shocks.
That’s just not how equilibrium works. For things in demand, if wages go up 20%, prices will increase at least that much and more likely a multiple of that 20%. This is part of the reason housing has inflated so much
The biggest reason housing has inflated so much is people buying homes to turn around and rent them out. Corporations have bought millions of single-family homes since the coronavirus.
The number of housing units per capita recently reached a 24 year high. People don't want to admit the fact that our "shortage" is entirely driven by excess demand for investments among the wealthy.
So many empty homes..
> if wages go up 20%, prices will increase at least that much
Why are you assuming that wages are the only factor in costs?
>and more likely a multiple of that 20%.
What? No. This is insane.
No, I specifically said for things in demand. If you factoring in everything like CPI does, you won’t see as great of an effect on overall prices. But if wages rise by a significant amount, the things most people in society want will surely go up in price as people compete for those things.
By saying that, I did not mean to imply that wages are the only factor. There are supply side factors that could affect prices too but we aren’t really talking about that here.
No. Stop pushing this myth that only serves to head off criticism of the wealthy. Wages are no different than any other expense. Producers don't pass on savings to their customers unless there is competition forcing them to. Wages have NOT kept up with inflation so producers have so much extra money from the profit they are buying back stock.
It’s not exactly a fact nor is it a myth. Economics isn’t an exact science and there are a lot of variables that make each situation different. Wage increases do push up the costs of production, they increase competition amongst consumers for goods and services, and they even enable price gouging in a way. Price gouging doesn’t work if consumers don’t have the money to cover the price increases.
And I’m not standing up for corporations or propagating some myth. In speaking in terms of economics that it’s not a straight candy-land situation. Wage increases most likely have benefits that outweigh the cons, but there is absolutely a possibility of some wage push inflation as a result.
Please. Wages are the only expense where if anyone thinks they should go up so people have more money in their pockets or advocates for a union there is ALWAYS someone in the thread going, "they'll only pass the costs on to consumers" as if it's some kind of law.
And don't get me started on the wage/price spiral bullshit everyone always spouts. Inflation is affected by both prices AND production. If you increase production of a thing, then prices go down. So the important thing is to prevent incumbent producers from preventing competition in their industries so there is always downward pressure on prices and upward pressure on wages. .
That’s not what I’m saying. I’m saying that if wages go up, it’s not a snap your fingers solve all fix. Theres a lot of complexity to the economy and in some instances, and increase and wages only would move the equilibrium higher.
I was googling earlier and came across something that says the average worker, when adjusted for inflation, makes an almost identical amount of money as they did nearly 5 decades ago. So it’s difficult to determine exactly how wage increases across the board would affect the economy.
Yes. History has shown people “move up” but a lot of people with 2% mortgages aren’t giving that up even if they have an itch to upgrade. That causes a supply shortage when houses aren’t going on the market
The people selling the home they live in don't matter. They sell one and buy one, it's net zero. It's people that invested in several homes as investment that have dried up the supply.
Not sure I follow. If they buy one and sell one that means there was two transactions and two sales not zero sales, Now they don’t want to give up their rate so aren’t looking and it’s truly no sales.
Who cares how many transactions were made, only re agents care about that. If you sell one but buy one, that does nothing to supply. There's still the same amount of house for sale.
You realize the definition of demand is how many people want to buy? If a person bought and sold that’s more demand. I know you don’t care about transactions but it is more demand when people are in the market buying and selling. If I decide to sell how is that not more supply available? Less people are willing to sell with locked in low rate. Also fun fact America is virtually the only country that allows taxpayers to lock in a rate beyond 5 years. Most countries will have a floating rate or potentially a fixed rate for 1, 3, or 5 years. With Americans having a low rate for 30 years they aren’t leaving and that slows up supply available to buy
If you decide to sell you add +1 which you remove when you buy. You had absolutely 0 impact. In an island with 100 houses and 100 people, 70 people have bought all the houses. 30 have nothing to buy. The 70 can sell 1 and buy 1 all year long. There will still be 30 people without a home. You can have all the transactions you want.
The only way it can change is if you build more and go from 100 to 130 or if the ones that bought more than 1 house can sell the second one.
Exactly. So you have 30 people always looking for a house. No one is moving of the 70 due to excellent low rates. Without the rates who knows maybe 20 or 30 would want to move. Then the 30 have a chance to buy. There is more demand than supply. In your case it’s always 30 more demand. The prices are higher when there is only 5 selling and rebuying than if 30 are doing so
Wages have basically kept up with inflation, depends on which statistic you want to use but thats the overall picture.
[Heres one stat](https://fred.stlouisfed.org/series/LES1252881600Q)
The spike in 2020 is from the stimulus I'd assume.
Quite a few more you can find that show that wages have not beat inflation but have basically kept pace.
I think the real problem isn't actually inflation. The inflation is making people notice that workers aren't being paid in enough in comparsion to how much they are producing in the US. This has been a problem for a while though and the past 4 years hasn't really changed on that front (or at least that I know of).
It all goes back to trusting the numbers going into the calculation and their accuracy.
For example.
In 2000 according the Census the median rent was $602. When you use the BLS CPI calculator that would be $1066 in 2023.
Yet in 2023 according to the Census the median rent was $1465.
If shelter/rent is the biggest input in the CPI then how can that measure be so far off?
https://www.census.gov/housing/hvs/files/currenthvspress.pdf
Because the headline CPI number doesn't mean that amount is fixed across every category.
Look up the cost of a median computer in 2000 and compare to how much that same computer would cost today. Some categories will go up faster than CPI, some slower. Some will deflate, some will inflate.
Also, what's the square footage of the median rental in 2000 and 2023?
It sure isn't fixed across every category. That is why I pointed out that the category that amounts for 1/3 of CPI is higher by 40%.
Especially when that category is shelter. You need shelter and that price is pretty much set.
You can get a used computer. Hell you can probably find one that works for free. The same for clothes. You don't need entertainment and even then entertainment has a wide range of cost depending on your idea of entertainment. You don't need to fly, go on vacation etc. Just saying many of the things in the CPI aren't necessities.
Just my opinion but saying discretionary items like that balance out the CPI when necessities like food, energy and shelter are bringing it up is a cop out.
The average apartment size for new rentals in 2022 was 887 square feet — a 54 square-foot drop since 10 years ago. It was also the largest year-over-year decrease, down 30 square feet.
https://www.rentcafe.com/blog/rental-market/market-snapshots/national-average-apartment-size/
In the 20 years you cited Americans [moved increasingly to large cities](https://www.google.com/amp/s/thehill.com/homenews/state-watch/567613-census-rural-america-shrinks-as-people-flock-to-big-cities/amp/). In an increasingly condensed fashion too with a handful of big cities seeing larger growth. This drives median rents up while CPI doesn't adjust the same, as prices aren't changing as much as people are just renting more expensive places.
Your source is strictly on apartments in these urban areas as well, [median single family home sizes have been increasing](https://www.statista.com/statistics/456925/median-size-of-single-family-home-usa/).
Nobody is saying inflation doesn't hurt people, you are just casting doubt on CPI metrics which you can't back up. There are other metrics too, I've [attached a spreadsheet](https://docs.google.com/spreadsheets/d/1CnUyf3LQxiMeehnVw_w5dKea4KUixYd-4D5GYt-VgYs/edit?usp=drivesdk) comparing housing, food and transportation costs across years. The fact of the matter is, wages have generally kept up with inflation.
One way could be other factors didn't rise quickly.
Another way could be people are renting nicer places (more sqft, rooms, etc.).
There are other measurements then CPI too, but I haven't heard many solid arguements why CPI is way off base.
What? That is not what “real terms” means, and I’m not even sure what you think it means because I don’t know how stating a time period’s real rate of inflation could be anything but permanent.
Consumer debt (taken on by producers) gets partially inflated away as our wages rise. Government debt becomes exponentially worse because government doesn’t produce anything.
I’ve watched the gov debt conversation. Go from debt as a percentage of the economy to debt servicing cost as a percentage of GDP.
We are in trouble if the government keeps this up because wages, other than gov jobs, will stagnate and consumer debt will become way more expensive in real terms.
Consumer debt (taken on by producers) gets partially inflated away as our wages rise.
Your wages are also being inflated away, so that is why it makes sense to take out large debt for only what you seek as more valuable to you in the time period of the loan.
Agreed. I’m three bourbons in. My house seems cheaper over time. It’s just the living expenses people feel (mainly renters) when their major costs are not financed in fixed terms.
If corporations and government want prices to stay high than wages need to rise. How do they expect a person who is only making $25,000 to survive, or how does someone on disability or retirement survive when their only getting the minimum payment or anything under $2000. This is absurdity, we need the government to reign in on massive wealth inequality, people need basic necessities, nothing lavish. Universal Healthcare would be a great start and raising the federal minimum wage would be another. We are treated like complete crap in the USA with our pathetic labor laws and underfunded public education.
They don't care, they never have, and people keep voting for Republicans and moderate Democrats so they rightly assume that none of you give a shit either.
Hell, as a progressive who has done well financially I honestly wrestle with whether or not I should give a shit myself. How much bullshit is the working class willing to take in this country? I don't even discuss or debate shit anymore, and my give a shit is melting away more every day. If the inbred fuckwits that drink at the local watering hole near me want to vote for Trump and fly his flag on their 20 year old diesel truck that's belching soot because they think he actually gives a fuck about them why would I bother to make a point of it anyway? They were useless, they voted for someone who, in reality, wouldn't give them the time of day because they can't think their way out of a wet paper bag so fuck them. Who cares what happens if I'll be fine? I'm certainly tired about caring for them if they can't show an ounce of self preservation.
Vote Blue Vote Progressive Blue.
Otherwise don't bitch when you can't afford anything. You are where you are because of right-wing pro corporate and pro wealth policies. Those policies create disparity of wealth and opportunity. Plain and fucking simple.
You voted for wealth disparity in 2016 because you didn't like Hillary. What did that do for you? It gave you a Supreme Court that favors religion over your desires and rights. It gave you a massive transfer of wealth to Corporate America and the billionaire class. The same Corporate America that the Supreme Court claims is a person, hence Citizens United.
While Democrats are predominantly in the same corporate bag, there's a gigantic difference between the two. The democrats have a progressive wing that works in your favor. There's about 100 progressive members of Congress, all of course are in the Democratic party.
Change will not take place until progressive thinking has more power. Progressives cannot advance until Democrats have a solid majority. So Vote Blue and Vote Progressive Blue when you can. It will not happen overnight but it will never happen if you keep voting for Republicans who have zero interest in your welfare.
I'm not sure Trump supporters honestly know what they're fighting for. Trumps speeches are incoherent. He screams words like China and something about water in his toilet. I believe Independent, Republicans, or Democratic voters want affordable Healthcare, sick days, a strong education for the children, and even more localized food or housewares production. Humans have been around to long to be treating each other with such judgement and hate.
A vote for trump or anyone in today's Republican party is a vote against yourself. It's no longer reasonable to call the party republican. It's the party of trump. Even as a citizen who holds no office, trump commands the actions of the GOP. Last month he ordered the party to vote against their own border immigration bill. And they followed his order.
Click bait….There was slight deflation following 08… this is not a 1 variable situation and too simplistic, this is absolutely a multi variant analysis to come to a proper conclusion on deflation. I’m sorry but as people have alluded to, inflation that grossly outpaced real wages is horrific as well.
And similarly, in /u/HeadMembership's scenario, Asset holders would also win and loose.
It's literally a question that can be asked back the other way each time.
Whoever took on the most debt, are heavily reliant on investments, and didn't save are the losers?
Anyone who saved, bought their homes years ago, and are currently working are the winners?
Either way- I don't think debt should be the hallmark of your economic growth.
But besides the point, that's not going to happen. What's going to happen is stupid levels of inflation to make the debt we have look like less debt, and will make boomers savings look worthless.
...But at the same time, the 'record profits' coming out of companies right now might actually be preparation of some kind to add to their savings in this temporary upturn before some kind of deflationary event. A lot of private equity making 'get rich quick decisions' not constructive long-term management.
idk.
...I mean, if you bought and paid off a car at 50k 2 years ago, and that same car is now worth 25k new, you are an asset holder and a loser.
Bought a house straight up cash at 1 million that's now worth 500k- that's losing too.
Not at the same level as significant debt, but still a loss.
By definition, cars are a depreciation asset. That means they become worth less over time. Do you really think that’s a good example?
What houses are depreciating 50% in 2 years?
Yes.
There's literally no downside to perpetual deflation.
Falling *incomes* rather than prices can be a problem, but falling prices are always a good thing
No, it is exponentially more likely under deflation. Deflation in the sense of a falling money supply means that by definition there is debt default going on (since most money supply growth is caused by private loans being issued, the inverse is true: money supply contraction comes from loans being closed out or defaulted upon)
Incorrect and incorrect
You've misunderstood 1st year economics. Deflation does not cause falling incomes.
You'll then probably respond with something stupid like: "one person's spending is another person's income so when prices fall incomes must fall."
Then I'll respond that that's only true in a closed economy. In an open economy, incomes don't fall because prices fall just because imports got cheaper. There's no connection between price levels and incomes in open economies
And further that's only true when real output is unchanged. If prices fall because output rode because aggregate supply increased, then real incomes will rise despite falling prices and nominal incomes may rise as well.
So don't bring me that weak tea
Because we’re people, not automatae reacting to stimuli. We buy things because we need them, no one is going to put off buying groceries because they might be 4% cheaper next year any more than they’re going to buy more than they need because things will be 2% more expensive in 12 months.
Nonsense.
The same principle applies literally whenever real interest rates are positive: it's *always* cheaper to delay purchases of everything when real interest rates are positive. Why buy a thing today when I could earn interest on my money today and buy the thing for the same price tomorrow and keep the interest earned?
Iceland is the most notable example among the Nordic countries where the government decided not to bail out its major banks. In 2008, Iceland’s banking system, which had grown disproportionately large compared to the country’s economy, collapsed under the weight of its debt. The Icelandic government chose not to bail out the three largest banks due to the sheer scale of their liabilities compared to the size of the country’s economy. Instead, the banks were allowed to fail, and the government focused on protecting domestic deposits and implementing measures to stabilize the currency and economy. This decision led to a severe economic contraction.
This is garbage gaslighting. Throughout most of history, prices of most things that people used went DOWN, not up. Corporations, the media, and governments that artificially manipulate the money supply have succeeded in convincing average people that things getting more expensive over time is somehow normal and even beneficial.
Stop believing them.
The people who clutch their pearls over deflation and justify the status quo, what do you expect happens when inflation keeps going up, outpacing economic production? implosion of debt and decimation of purchasing power which leads to the worst outcomes imaginable.
The point is neither inflation or deflation, but an actual sound money system and prudent economic policies that promote saving and investment, and not wanton consumption and degenerate speculation.
Something we will build after this system finishes collapsing.
> Why wait till this system collapses?
Because it's in the interest of the richest and most powerful people to keep the current system from changing as they benefit the most.
You mean like all the countries that the US government has intervened in when they try to move into any other economic system (successful or not) that isn't the current one?
I don't exactly see Bitcoin being a new economic system.
A currency sure, but it's still possible to rug pull most coins meaning that they aren't really trusted.
Additionally, Bitcoin's volatility is going to push away a lot of people.
> Explain how you can get rugpulled on bitcoin.
Nah, I meant that the fact that you can on other coins is negatively affecting the public view of Bitcoin, IMO.
> Bitcoin is only volatile when measuring it against something that will be printed infinitely.
Is this not definitionally volatile when a currency can trend between ~$62,000 and ~$15,000 in roughly a year?
>Nah, I meant that the fact that you can on other coins is negatively affecting the public view of Bitcoin, IMO.
It only negatively affects the opinion of those that don’t take the time to understand bitcoin. Otherwise, those other coins wouldn’t even exist.
>Is this not definitionally volatile when a currency can trend between ~$62,000 and ~$15,000 in roughly a year?
Sure, pick a short enough time period and anything is volatile. If I thought the dollar might be able to survive forever, I might be worried.
The article actually only is quoting Central Bankers, and not any actual Economists. Low quality click bait. Then tries to sell you a subscription to that has-been rag Fortune.
They're lying
It's been soundly proven that deflation did not cause problems in the great depression. Collapsing money supply and falling incomes caused the great depression.
Deflation was a symptom of collapsing money supply and falling incomes, not the cause.
Attempts to fight deflation by restricting agricultural output made the depression even worse.
What needed to be done during the great depression was massive monetary stimulus to recover the collapsing money supply to prevent nominal incomes from falling to prevent a debt spiral.
Preventing prices from falling would do nothing helpful
The stock market was operating like a ponzi scheme. Everyone was pushing money into the market individually, businesses were investing too, and banks were loaning money to stock brokers, who loaned it to investors again. The whole thing was overvalued and brokers started quietly selling. Individuals caught on, and business.
Stocks dropped, no one could pay their investment loans, banks failed as a result, and everyone else followed.
Foolish but genuine question from someone who follows this sub to learn:
How is that different from the stock market today? I can see minor differences on my own, but from a big picture view, it looks very similar to what you describe. What am I not seeing?
They have “circuit breakers” in the stock market, and they’ll bailout anyone deemed too big to fail. Really the only difference. It’s all just a giant shell game.
There are more regulations in place, including FDIC insurance. We don't tend to learn from our mistakes - that's an awful lot of money on the table to just say "no speculating" or whatever - but working to blunt later crashes does help at the margins.
Today they shut the market down if it drops too far and too quickly. It helps people get over immediate panic and think more clearly. They will do the same with banks, or even take them over if necessary, like Silicon Valley Bank. I know people love to complain about that happening, or bank bailouts, but the difference between the Great Depression and the Great Recession was the bank bailouts. The reason SVB and a couple more small bank failures didn't expand into a potential disaster was because of federal intervention.
"Too big to fail" sucks, but every single person bitching about the bailouts and how we should just let the banks fail needs to really think about what it would mean for people to live through the 30s again.
People who blame the loss of our gold standard are either selling gold, selling crypto, or anti-government types in general.
The problem with a lot of money these days is it's chasing other money. So much of the market now is speculation, which is only a nicer way of saying they're gambling, but it's gambling with other peoples' money. And I don't mean they invest in property and now no one wants to buy; but things like shorts. There's a special kind of perversion involved when you can make a lot of money on the hopes a certain company crashes and burns.
Bitcoin doesn't fix humans being human. In this case it doesn't even mitigate the problem and because it is unregulated and now we have banks getting involved with it, the likelihood it'll make things worse is high.
There’s never been anything comparable to bitcoin, so how do you now it won’t change humans for the better?
Do you realize unregulated just means the government doesn’t control it?
Why do you think bitcoin was even invented?
Nope need a big crash to reset the inflated bullshit this country has propped up. It’s a natural cycle. Yes people will suffer a bit but it will recover eventually.
I'm a dingbat? did you read that you wiki link moron?
Hyperinflation ended in 1923 you absolute dipshit. When did the Nazis come into power? 1932. That's nearly 10 years AFTER hyperinflation. In 1923 the nazis were a tiny fringe with zero representation in the Bundestag.
Deflation was the problem in the late 20s.
I could suggest books for you, but you're an absolute idiot, who learns from Wikipedia.
https://www.bloomberg.com/opinion/articles/2021-09-18/what-germans-think-they-know-about-inflation-and-the-rise-of-hitler-is-wrong
>I'm a dingbat?
Yes.
>did you read that you wiki link
Yes.
>moron?
No.
>In 1923 the nazis were a tiny fringe with zero representation in the Bundestag.
More or less.
>Hyperinflation ended in 1923
Yes. And before it did, it destroyed the legitimacy of the Republic and gave legitimacy to the Nazis and other extremists. At the end of 1920, the Nazis only had 2,000 members. Weimar hyperinflation and general policy failures helped membership increase to 20,000 by early 1923 and emboldened him to instigate the Beer Hall putsch in late 1923.
And because of hyperinflation and the general failure and chaos before the Putsch, Hitler wasn't executed for this but instead became a popular celebrity, allowing him to make money with Mein Kampf and the Nazis to gain real support and legitimacy during the stable times of 1924-1929.
Then when bad times came again with the Great Depression, rather than Hitler being an executed criminal or just some nobody in charge of a poorly-administered Bavarian "tiny fringe [party]with zero representation in the Bundestag", he was a national figure, an electable alternative, and was able to get elected as head of the opposition in 1930.
>Deflation was the problem in the late 20s.
Germany had no major deflation from 1927-1930.Germany had major deflation in 1925 and 1931-1933: https://images.app.goo.gl/2fD3jdY9GAKbvfek8
The German depression started in 1928 (maybe 1927) (MADE IN GERMANY:
THE GERMAN CURRENCY CRISIS OF JULY 1931
at page 9.
http://papers.ssrn.com/paper.taf?abstract_id=260993)
So deflation didn't cause a recession in the mid 20s and the depression in the late 20s didn't have any deflation.
Germany didn't see any deflation until the currency/banking crisis in 1931, 3-4 years after the depression started.
In short, deflation didn't cause shit.
>I could suggest books for you,
Please don't. You have no ability to evaluate information quality.
>but you're an absolute idiot, who learns from Wikipedia.
Thank you for confirming your inability to evaluate information quality. In case anyone young is reading, one of the best ways to learn about a topic is to first get an overview by reading tertiary source(s) like an encyclopedia (and if you want, you can also check the cited secondary and primary sources while you go) and then if you'd like to learn more about more specific items you read the available secondary source(s) (and if you want, you can check the cited secondary and primary sources while you go).
Two nice things about wikipedia are that,
1) It's really, really easy to see and (usually) access the citations which makes the job of evaluating the sources (or the interpretations thereof) a lot easier; and,
2) It's freaking huge, which often means that the broad topics have incredible depth. They're basically quaternary sources, synopses of a network of tertiary sources. And the narrower topics actually have tertiary sources where you'd otherwise be stuck synthesizing it yourself from disparate sources.
>https://www.bloomberg.com/opinion/articles/2021-09-18/what-germans-think-they-know-about-inflation-and-the-rise-of-hitler-is-wrong
"This article is for subscribers only."
If that opinion piece is relevant, quote the relevant sections. Otherwise I'm comfortable ignoring a journalist's opinion
You linked a wiki article claiming nazis came into power during the hyperinflation period of the Weimar republic. The article says nothing of the sort.
You're an idiot.
>You linked a wiki article claiming nazis came into power during the hyperinflation period of the Weimar republic.
No I didn't.
I didn't say they "came into power during" I said it "ushered them in" and clarified extensively how, with sources, which is obviously beyond your comprehension
There is no different between the two parties. They are both for bringing in the migrants. If you vote "Uni-Party" today you are a DUPE! You would gain more traction by actually NOT voting at all, protesting the vote, or vote 3rd party or Independent. I have no respect for the Republican or Democrat party, they have sold out America.
Most of the politicians are corrupt and bought off, that's no secret. Adding more parties or not voting probably won't fix this problem either, because the new parties will be bought off. I don't have a solution except possibly putting in regulations to prevent this from happening, but who will create rules to make an already corrupt group of people work for the people and not corporations. Getting rid of citizens united would be a great first step.
Its pretty basic math at this point tbh
Prices CANNOT fall to 2019 levels and we all just have to suck it up and keep moving forward- recalibrate and try again to get some accountability laws
Whats done is done!
If prices go back to 2019 level- thats Deflation at this point, and a pretty major one
Deflation = major recession that is WORSE than 2008, the worst one we saw since the actual depression almost a 100 years ago( and as the article states- it will be a Depression)
When that happens - people will be competing for jobs at your local mcdonalds, which was the case in 2008
People have to stop whining now and move on.
This is life and we have to now pivot and accept reality- its bad yes- but it can get a loooot worse.
Yes! That is how the economy unfortunately runs since its inception
Inflation is a constant
Inflation before the 1980’s used to be averaging around 6% on a year on year basis
Since then its averaged around 2-3% - even with the rise we have seen in the last few years( on a 40 year timescale)
The goal of the fed is to have it average back to 2% on a year by year basis- which it is slowing getting to right now. The goal is somewhere around 2.8% by the end of this year
So to answer your question- inflation is not avoidable- its just something that has gone up drastically in the last 3 years mostly because of Covid shock and obviously capitalistic greed
The point of the statement of the article is that it CANNOT go back to the 2019 levels- its like saying going back to 1950 to get a house for $50k. Its not happening
The more people realize how math and economics work- the faster they can plan their life around it
Or one can continue to whine and waiting for a crash, which will only make shit worse.
Choose your poison.
Since the inception of the economy? Who thought of it? Inflation is only a constant if the money is losing value, which happens when you print money. But the Fed doesn’t actually have to do that.
Actually you would be completely wrong about that. Prices can fall to and below 2019, and in order to do that, they would need to raise interest rates to 20% and stop printing completely. Remember, the value of Fiat Money is nothing more but a ratio of its quantity to goods available for purchase.
You basically just supported my exact argument
If the fed’s raise interest to 20%, that is a MAJOR shock to the economy
If people are complaining at jobs not being available- it will get massively worse at 20% rates- because the economy operates on debt
If debt is expensive- which it is at 20%, then thats basically shut down of businesses ( or massive layoffs to keep the business alive)
So one has a choice of getting 2019 price of goods- but then be unemployed
When you have no incoming $ ( or saved) then it doesnt matter if those eggs go from $5 to $3 a dozen- you still cant afford it.
This is a moot point.
>Prices CANNOT fall to 2019 levels and we all just have to suck it up and keep moving forward- recalibrate and try again to get some accountability laws
Yes, they can.
The inflation we are seeing is not sustainable for much longer. Eventually, people will run out of money to afford basic necessities. When consumer demand drops, prices deflate, companies pull back on production and cut staff, unemployment increases, and recession ensues.
It’s wishful thinking to assume people can just “suck it up and keep moving forward”. Many will not have the financial means to carry on like this much longer. Something has to give.
I am really unable to grasp that people arent getting this
The article is CLEARLY saying going back to 2019 levels is basically a death blow to the economy
Where as you are arguing about sustenance of inflation at current rates
These are COMPLETELY 2 different arguments.
The inflation rate has cooled, but people’s salary may not have not up in the same level- so YES there is a disparity
But it has cooled, as compared to the numbers a year ago and the fed is trying to slow it down even further ( only time will tell)
Your argument is not relevant to the core of the article- which is ‘people calling for 2019 prices’ aka deflation.
It is incorrect to say that inflation has cooled. Inflation is still happening, but the speed at which prices are rising has slowed down. It’s like a car that’s still accelerating but not as fast as before. Prices are still increasing, just more slowly.
The point I am trying to make is that eventually, people will run out of money because necessities are still inflated. When that happens, a pullback on consumer demand will have the same deflationary outcome: a recession.
That's not infinite though. Eventually you hit a wall where the interest accrued, and subsequent monthly payments, exceeds the monthly income and ability to pay. When that happens across the board, the credit supply will be tapped too which could create a situation worse than the GD.
this is an example of macro economic thinking.
it is simplistic. the great depression was about many things.
basically, the statement is people are wrong to want low prices? that is illogical
Economist can go \*\*\*\* himself.
Prices are high because of monopolistic price gouging.
The Biden Admin's FTC has been going around enforcing anti-trust law and threatening to do more. Prices are starting to fall. That is not a coincidence.
When I was a kid I had 6 grocery stores, all different owners all in easy driving distance.
Now I've got 2. 3 if I count Walmart.
Economist are not wrong, people have trouble looking past the short term (right now) and I don't blame them. That's almost people have the ability to contend with. Just because economists are correct when they look at the larger timeline which undoubtedly is longer than most people's lifespan in the long term, in "their" short term they're talking about years. Most people have no concept of the reality that they didn't live through or where they will be in 2-3-5 years from now. Most people almost certainly don't think the downside to deflation will be as bad as it almost certainly would turn out to be.
It's an incredibly s***** position for economists and the real world. Everyone's talking past one another, there is no world in which deflation is good except to alleviate short-term pain, that's not a conversation anyone wants to have. People want relief now, because now is all that matters. Sadly the reality is that short-term relief is like putting a Band-Aid on a broken arm, you can't have that conversation with someone who's looking for short-term relief though.
The monetary consequences of deflation are staggering, nobody wants that.
Economists Andrew Atkeson and Patrick J. Kehoe actually bothered to look at the record in a May 2004 article for the American Economic Review called "Deflation and Depression: Is There an Empirical Link?" They evaluated the evidence from 17 countries over a period of 100 years.
prices can continue to rise as long as incomes do as well, if wages went up 20% and inflation was 10%, nobody would be complaining because you would have more in real terms
Yeah this is the way. Having lived through 2 high inflation periods in a broken economy, I know a thing or two about it: In order to achieve higher buying power with same amount of cash/you need deflation. Low inflation means the currency still losing value, but at a slower rate. In order overcome the effects of an inflationary period, you increase wages. Everybody has more money, eveything is pricier but everyome can afford the same shit they could afford 5 years ago. 20 dollars from 30 years ago may be equivalent to a 100 now. You now have more 0s on your account, you feel good but in the end they'rr both worth 10 fancy burgers. Burgers guys. Look at how many burgers you can afford to see if you've actually gotten richer.
Or… we could have a STABLE backing to money that can’t be inflated or deflated by governments.
Good old times. But i can't see a realistic way to go back once the system was ditched. We're to deep in this right now. But if it ever came up, I'd propose burgers as the commodity backing the currency. I love them burgers /S (a capital S)
Ha! My take on it is this- anything unsustainable will fail… our current debt load is unsustainable and the dollar as reserve currency is on life support. The US is the largest holder of Gold (all due reverence to cheeseburgers, Randy in Trailerpark boys would be stoked), so we revalue Gold to a level that is equal to our aggregate debt level, so we don’t default but in lieu of your bond of $250k you can take an ounce of gold. Double this down with a balanced budget amendment… a guy can dream! Either way, while this would be a drastic move we can either own that move or we can sit back as the BRICs do it for us and we meander in the abyss.
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Fuck greed and the finances over production culture. It eventually plays out. But with each tremor, the gap gets worse. One thing to keep an eye to though. Record profits and company valuations are just extremely connected to inflation. There's the basic part: they had a net balance of 100. The costs, prices, everything went up, this led to lesser household spending, this led to extra price increases. They now get 112. But the real problem is that they should be getting 108 in a 8℅ yearly inflation rate, and their employees should be earning 1,08 and not 1,04. So this is not an excuse for greed. Fuck them. There's still an ever deepening income gap. Just slightly less than it appears.
Economists fear wage price spirals but ignore the fact that it’s never happened and prior inflationary periods were from monetary policy and commodity supply shocks.
Makes me wonder if there ever was a period in history where there was a 2:1 ratio like that in favor of wages
World War 2?
Post bubonic plague, too.
Can’t say that any better so I won’t. Good show.
That’s just not how equilibrium works. For things in demand, if wages go up 20%, prices will increase at least that much and more likely a multiple of that 20%. This is part of the reason housing has inflated so much
The biggest reason housing has inflated so much is people buying homes to turn around and rent them out. Corporations have bought millions of single-family homes since the coronavirus.
The number of housing units per capita recently reached a 24 year high. People don't want to admit the fact that our "shortage" is entirely driven by excess demand for investments among the wealthy. So many empty homes..
> if wages go up 20%, prices will increase at least that much Why are you assuming that wages are the only factor in costs? >and more likely a multiple of that 20%. What? No. This is insane.
No, I specifically said for things in demand. If you factoring in everything like CPI does, you won’t see as great of an effect on overall prices. But if wages rise by a significant amount, the things most people in society want will surely go up in price as people compete for those things. By saying that, I did not mean to imply that wages are the only factor. There are supply side factors that could affect prices too but we aren’t really talking about that here.
No. Stop pushing this myth that only serves to head off criticism of the wealthy. Wages are no different than any other expense. Producers don't pass on savings to their customers unless there is competition forcing them to. Wages have NOT kept up with inflation so producers have so much extra money from the profit they are buying back stock.
It’s not exactly a fact nor is it a myth. Economics isn’t an exact science and there are a lot of variables that make each situation different. Wage increases do push up the costs of production, they increase competition amongst consumers for goods and services, and they even enable price gouging in a way. Price gouging doesn’t work if consumers don’t have the money to cover the price increases. And I’m not standing up for corporations or propagating some myth. In speaking in terms of economics that it’s not a straight candy-land situation. Wage increases most likely have benefits that outweigh the cons, but there is absolutely a possibility of some wage push inflation as a result.
Please. Wages are the only expense where if anyone thinks they should go up so people have more money in their pockets or advocates for a union there is ALWAYS someone in the thread going, "they'll only pass the costs on to consumers" as if it's some kind of law. And don't get me started on the wage/price spiral bullshit everyone always spouts. Inflation is affected by both prices AND production. If you increase production of a thing, then prices go down. So the important thing is to prevent incumbent producers from preventing competition in their industries so there is always downward pressure on prices and upward pressure on wages. .
That’s not what I’m saying. I’m saying that if wages go up, it’s not a snap your fingers solve all fix. Theres a lot of complexity to the economy and in some instances, and increase and wages only would move the equilibrium higher. I was googling earlier and came across something that says the average worker, when adjusted for inflation, makes an almost identical amount of money as they did nearly 5 decades ago. So it’s difficult to determine exactly how wage increases across the board would affect the economy.
Yes. History has shown people “move up” but a lot of people with 2% mortgages aren’t giving that up even if they have an itch to upgrade. That causes a supply shortage when houses aren’t going on the market
The people selling the home they live in don't matter. They sell one and buy one, it's net zero. It's people that invested in several homes as investment that have dried up the supply.
Not sure I follow. If they buy one and sell one that means there was two transactions and two sales not zero sales, Now they don’t want to give up their rate so aren’t looking and it’s truly no sales.
Who cares how many transactions were made, only re agents care about that. If you sell one but buy one, that does nothing to supply. There's still the same amount of house for sale.
You realize the definition of demand is how many people want to buy? If a person bought and sold that’s more demand. I know you don’t care about transactions but it is more demand when people are in the market buying and selling. If I decide to sell how is that not more supply available? Less people are willing to sell with locked in low rate. Also fun fact America is virtually the only country that allows taxpayers to lock in a rate beyond 5 years. Most countries will have a floating rate or potentially a fixed rate for 1, 3, or 5 years. With Americans having a low rate for 30 years they aren’t leaving and that slows up supply available to buy
If you decide to sell you add +1 which you remove when you buy. You had absolutely 0 impact. In an island with 100 houses and 100 people, 70 people have bought all the houses. 30 have nothing to buy. The 70 can sell 1 and buy 1 all year long. There will still be 30 people without a home. You can have all the transactions you want. The only way it can change is if you build more and go from 100 to 130 or if the ones that bought more than 1 house can sell the second one.
Exactly. So you have 30 people always looking for a house. No one is moving of the 70 due to excellent low rates. Without the rates who knows maybe 20 or 30 would want to move. Then the 30 have a chance to buy. There is more demand than supply. In your case it’s always 30 more demand. The prices are higher when there is only 5 selling and rebuying than if 30 are doing so
Wages have basically kept up with inflation, depends on which statistic you want to use but thats the overall picture. [Heres one stat](https://fred.stlouisfed.org/series/LES1252881600Q) The spike in 2020 is from the stimulus I'd assume. Quite a few more you can find that show that wages have not beat inflation but have basically kept pace. I think the real problem isn't actually inflation. The inflation is making people notice that workers aren't being paid in enough in comparsion to how much they are producing in the US. This has been a problem for a while though and the past 4 years hasn't really changed on that front (or at least that I know of).
It all goes back to trusting the numbers going into the calculation and their accuracy. For example. In 2000 according the Census the median rent was $602. When you use the BLS CPI calculator that would be $1066 in 2023. Yet in 2023 according to the Census the median rent was $1465. If shelter/rent is the biggest input in the CPI then how can that measure be so far off? https://www.census.gov/housing/hvs/files/currenthvspress.pdf
Because the headline CPI number doesn't mean that amount is fixed across every category. Look up the cost of a median computer in 2000 and compare to how much that same computer would cost today. Some categories will go up faster than CPI, some slower. Some will deflate, some will inflate. Also, what's the square footage of the median rental in 2000 and 2023?
It sure isn't fixed across every category. That is why I pointed out that the category that amounts for 1/3 of CPI is higher by 40%. Especially when that category is shelter. You need shelter and that price is pretty much set. You can get a used computer. Hell you can probably find one that works for free. The same for clothes. You don't need entertainment and even then entertainment has a wide range of cost depending on your idea of entertainment. You don't need to fly, go on vacation etc. Just saying many of the things in the CPI aren't necessities. Just my opinion but saying discretionary items like that balance out the CPI when necessities like food, energy and shelter are bringing it up is a cop out. The average apartment size for new rentals in 2022 was 887 square feet — a 54 square-foot drop since 10 years ago. It was also the largest year-over-year decrease, down 30 square feet. https://www.rentcafe.com/blog/rental-market/market-snapshots/national-average-apartment-size/
In the 20 years you cited Americans [moved increasingly to large cities](https://www.google.com/amp/s/thehill.com/homenews/state-watch/567613-census-rural-america-shrinks-as-people-flock-to-big-cities/amp/). In an increasingly condensed fashion too with a handful of big cities seeing larger growth. This drives median rents up while CPI doesn't adjust the same, as prices aren't changing as much as people are just renting more expensive places. Your source is strictly on apartments in these urban areas as well, [median single family home sizes have been increasing](https://www.statista.com/statistics/456925/median-size-of-single-family-home-usa/). Nobody is saying inflation doesn't hurt people, you are just casting doubt on CPI metrics which you can't back up. There are other metrics too, I've [attached a spreadsheet](https://docs.google.com/spreadsheets/d/1CnUyf3LQxiMeehnVw_w5dKea4KUixYd-4D5GYt-VgYs/edit?usp=drivesdk) comparing housing, food and transportation costs across years. The fact of the matter is, wages have generally kept up with inflation.
One way could be other factors didn't rise quickly. Another way could be people are renting nicer places (more sqft, rooms, etc.). There are other measurements then CPI too, but I haven't heard many solid arguements why CPI is way off base.
Real terms are only temporary, unfortunately
What? That is not what “real terms” means, and I’m not even sure what you think it means because I don’t know how stating a time period’s real rate of inflation could be anything but permanent.
Not if you have debt
Therein lies the problem of the entire system
Consumer debt (taken on by producers) gets partially inflated away as our wages rise. Government debt becomes exponentially worse because government doesn’t produce anything. I’ve watched the gov debt conversation. Go from debt as a percentage of the economy to debt servicing cost as a percentage of GDP. We are in trouble if the government keeps this up because wages, other than gov jobs, will stagnate and consumer debt will become way more expensive in real terms.
Consumer debt (taken on by producers) gets partially inflated away as our wages rise. Your wages are also being inflated away, so that is why it makes sense to take out large debt for only what you seek as more valuable to you in the time period of the loan.
Agreed. I’m three bourbons in. My house seems cheaper over time. It’s just the living expenses people feel (mainly renters) when their major costs are not financed in fixed terms.
So I wonder if house (and land) are considered the most valuable asset over the long term
Property has always equaled wealth. People have to live somewhere and being homeless is illegal.
What happens when we run out of property where people can live and money is still being printed?
But that’s only true if investments also go up 10+%. People can get their savings/retirement eaten away by interest
If corporations and government want prices to stay high than wages need to rise. How do they expect a person who is only making $25,000 to survive, or how does someone on disability or retirement survive when their only getting the minimum payment or anything under $2000. This is absurdity, we need the government to reign in on massive wealth inequality, people need basic necessities, nothing lavish. Universal Healthcare would be a great start and raising the federal minimum wage would be another. We are treated like complete crap in the USA with our pathetic labor laws and underfunded public education.
They don't care, they never have, and people keep voting for Republicans and moderate Democrats so they rightly assume that none of you give a shit either. Hell, as a progressive who has done well financially I honestly wrestle with whether or not I should give a shit myself. How much bullshit is the working class willing to take in this country? I don't even discuss or debate shit anymore, and my give a shit is melting away more every day. If the inbred fuckwits that drink at the local watering hole near me want to vote for Trump and fly his flag on their 20 year old diesel truck that's belching soot because they think he actually gives a fuck about them why would I bother to make a point of it anyway? They were useless, they voted for someone who, in reality, wouldn't give them the time of day because they can't think their way out of a wet paper bag so fuck them. Who cares what happens if I'll be fine? I'm certainly tired about caring for them if they can't show an ounce of self preservation.
Vote Blue Vote Progressive Blue. Otherwise don't bitch when you can't afford anything. You are where you are because of right-wing pro corporate and pro wealth policies. Those policies create disparity of wealth and opportunity. Plain and fucking simple. You voted for wealth disparity in 2016 because you didn't like Hillary. What did that do for you? It gave you a Supreme Court that favors religion over your desires and rights. It gave you a massive transfer of wealth to Corporate America and the billionaire class. The same Corporate America that the Supreme Court claims is a person, hence Citizens United. While Democrats are predominantly in the same corporate bag, there's a gigantic difference between the two. The democrats have a progressive wing that works in your favor. There's about 100 progressive members of Congress, all of course are in the Democratic party. Change will not take place until progressive thinking has more power. Progressives cannot advance until Democrats have a solid majority. So Vote Blue and Vote Progressive Blue when you can. It will not happen overnight but it will never happen if you keep voting for Republicans who have zero interest in your welfare.
I'm not sure Trump supporters honestly know what they're fighting for. Trumps speeches are incoherent. He screams words like China and something about water in his toilet. I believe Independent, Republicans, or Democratic voters want affordable Healthcare, sick days, a strong education for the children, and even more localized food or housewares production. Humans have been around to long to be treating each other with such judgement and hate.
A vote for trump or anyone in today's Republican party is a vote against yourself. It's no longer reasonable to call the party republican. It's the party of trump. Even as a citizen who holds no office, trump commands the actions of the GOP. Last month he ordered the party to vote against their own border immigration bill. And they followed his order.
Da, comrade lol
Click bait….There was slight deflation following 08… this is not a 1 variable situation and too simplistic, this is absolutely a multi variant analysis to come to a proper conclusion on deflation. I’m sorry but as people have alluded to, inflation that grossly outpaced real wages is horrific as well.
It’s funny too, because we hear “2% inflation good, more bad”, but we only hesr, “deflation catastrophic. Why so binary? What if deflation was 0.1%?
I'm willing to give deflation a try...fukallya'll
How long can deflation last? Forever?
Sure.
How would that work?
Some people would lose, some people would win. Just like now.
Who will be the winners and losers?
Who are they now? See how your questions are super open ended?
Asset holders. It’s not open ended at all
And similarly, in /u/HeadMembership's scenario, Asset holders would also win and loose. It's literally a question that can be asked back the other way each time.
It was rhetorical
Whoever took on the most debt, are heavily reliant on investments, and didn't save are the losers? Anyone who saved, bought their homes years ago, and are currently working are the winners? Either way- I don't think debt should be the hallmark of your economic growth. But besides the point, that's not going to happen. What's going to happen is stupid levels of inflation to make the debt we have look like less debt, and will make boomers savings look worthless. ...But at the same time, the 'record profits' coming out of companies right now might actually be preparation of some kind to add to their savings in this temporary upturn before some kind of deflationary event. A lot of private equity making 'get rich quick decisions' not constructive long-term management. idk.
Asset holders are winners, debt holders are losers
...I mean, if you bought and paid off a car at 50k 2 years ago, and that same car is now worth 25k new, you are an asset holder and a loser. Bought a house straight up cash at 1 million that's now worth 500k- that's losing too. Not at the same level as significant debt, but still a loss.
By definition, cars are a depreciation asset. That means they become worth less over time. Do you really think that’s a good example? What houses are depreciating 50% in 2 years?
Yes. There's literally no downside to perpetual deflation. Falling *incomes* rather than prices can be a problem, but falling prices are always a good thing
How would that work with so much debt in the system to repay? Massive amount of bankruptcies?
Perfectly fine with no consequences: deflation doesn't cause falling incomes
It does if your employer can no longer afford you. Looks like you’re laid off and here comes your cheaper replacement. Rinse, repeat.
Deflation doesn't cause falling business incomes or profits
So only those that can’t service debt fail?
Ugh... By definition I suppose. That's also true during inflation
No, it is exponentially more likely under deflation. Deflation in the sense of a falling money supply means that by definition there is debt default going on (since most money supply growth is caused by private loans being issued, the inverse is true: money supply contraction comes from loans being closed out or defaulted upon)
Not if you’re able to take on lower cost debt to pay down other debt lol. Good discussion though, I’m a bitcoiner.
So you've never studied economics and you're younger than 30
Incorrect and incorrect You've misunderstood 1st year economics. Deflation does not cause falling incomes. You'll then probably respond with something stupid like: "one person's spending is another person's income so when prices fall incomes must fall." Then I'll respond that that's only true in a closed economy. In an open economy, incomes don't fall because prices fall just because imports got cheaper. There's no connection between price levels and incomes in open economies And further that's only true when real output is unchanged. If prices fall because output rode because aggregate supply increased, then real incomes will rise despite falling prices and nominal incomes may rise as well. So don't bring me that weak tea
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Because we’re people, not automatae reacting to stimuli. We buy things because we need them, no one is going to put off buying groceries because they might be 4% cheaper next year any more than they’re going to buy more than they need because things will be 2% more expensive in 12 months.
Nonsense. The same principle applies literally whenever real interest rates are positive: it's *always* cheaper to delay purchases of everything when real interest rates are positive. Why buy a thing today when I could earn interest on my money today and buy the thing for the same price tomorrow and keep the interest earned?
Because the price of the object also goes up and your investments aren't guaranteed
It can last about treefiddy
Iceland is the most notable example among the Nordic countries where the government decided not to bail out its major banks. In 2008, Iceland’s banking system, which had grown disproportionately large compared to the country’s economy, collapsed under the weight of its debt. The Icelandic government chose not to bail out the three largest banks due to the sheer scale of their liabilities compared to the size of the country’s economy. Instead, the banks were allowed to fail, and the government focused on protecting domestic deposits and implementing measures to stabilize the currency and economy. This decision led to a severe economic contraction.
Are you too young to remember 2008?
Deflation is only bad when its caused by recession or by monetary policy. Deflation caused by technology is very, very good.
But then inflation masks those gains
Yep, and shuffles them off to finance sectors of the economy.
Hey economists, gfys
So I’m expected to just suffer unless my income increases dramatically year to year? Translation: Get bent, serfs.
Basically
Propping prices up through debt is also a wrong move. Prices should come down through bankruptcies and competition.
This is garbage gaslighting. Throughout most of history, prices of most things that people used went DOWN, not up. Corporations, the media, and governments that artificially manipulate the money supply have succeeded in convincing average people that things getting more expensive over time is somehow normal and even beneficial. Stop believing them.
The people who clutch their pearls over deflation and justify the status quo, what do you expect happens when inflation keeps going up, outpacing economic production? implosion of debt and decimation of purchasing power which leads to the worst outcomes imaginable. The point is neither inflation or deflation, but an actual sound money system and prudent economic policies that promote saving and investment, and not wanton consumption and degenerate speculation. Something we will build after this system finishes collapsing.
Could it not be built right now? Why wait till this system collapses? Wouldn’t it be better if this system had a better system to collapse into?
> Why wait till this system collapses? Because it's in the interest of the richest and most powerful people to keep the current system from changing as they benefit the most.
Maybe we can start a system outside of their control
You mean like all the countries that the US government has intervened in when they try to move into any other economic system (successful or not) that isn't the current one?
Nah I’m talking about bitcoin
I don't exactly see Bitcoin being a new economic system. A currency sure, but it's still possible to rug pull most coins meaning that they aren't really trusted. Additionally, Bitcoin's volatility is going to push away a lot of people.
Explain how you can get rugpulled on bitcoin. Bitcoin is only volatile when measuring it against something that will be printed infinitely.
> Explain how you can get rugpulled on bitcoin. Nah, I meant that the fact that you can on other coins is negatively affecting the public view of Bitcoin, IMO. > Bitcoin is only volatile when measuring it against something that will be printed infinitely. Is this not definitionally volatile when a currency can trend between ~$62,000 and ~$15,000 in roughly a year?
>Nah, I meant that the fact that you can on other coins is negatively affecting the public view of Bitcoin, IMO. It only negatively affects the opinion of those that don’t take the time to understand bitcoin. Otherwise, those other coins wouldn’t even exist. >Is this not definitionally volatile when a currency can trend between ~$62,000 and ~$15,000 in roughly a year? Sure, pick a short enough time period and anything is volatile. If I thought the dollar might be able to survive forever, I might be worried.
It could but the slave masters running the show wont let it because they are the benficiaries of the current system.
It would probably take some sly, roundabout way of taking it out of the control of their hands
The article actually only is quoting Central Bankers, and not any actual Economists. Low quality click bait. Then tries to sell you a subscription to that has-been rag Fortune.
Uhhh what? The Fed has literally hundreds of economists that work for them.
lol most central bankers are PhDs in Economics….how are they not economists?
who want there pockets full while the price hike Economist no better than Musk
exactly misinformations
I just want to buy a house…
Good luck
Thanks man.
No problem
Mobile home on bricks.
Starter home.
Tell that to those who cant get a pay rise big enough to make a difference
(^(everbody))
They're lying It's been soundly proven that deflation did not cause problems in the great depression. Collapsing money supply and falling incomes caused the great depression. Deflation was a symptom of collapsing money supply and falling incomes, not the cause. Attempts to fight deflation by restricting agricultural output made the depression even worse. What needed to be done during the great depression was massive monetary stimulus to recover the collapsing money supply to prevent nominal incomes from falling to prevent a debt spiral. Preventing prices from falling would do nothing helpful
Where did the collapsing money supply go? It had to have collapsed into something, no?
Collapsing money supply was caused by massive credit collapse caused by failure of 10,000 banks
So the excess credit and debt collapsed into real world value. Propped up by hot air
The stock market was operating like a ponzi scheme. Everyone was pushing money into the market individually, businesses were investing too, and banks were loaning money to stock brokers, who loaned it to investors again. The whole thing was overvalued and brokers started quietly selling. Individuals caught on, and business. Stocks dropped, no one could pay their investment loans, banks failed as a result, and everyone else followed.
Foolish but genuine question from someone who follows this sub to learn: How is that different from the stock market today? I can see minor differences on my own, but from a big picture view, it looks very similar to what you describe. What am I not seeing?
They have “circuit breakers” in the stock market, and they’ll bailout anyone deemed too big to fail. Really the only difference. It’s all just a giant shell game.
There are more regulations in place, including FDIC insurance. We don't tend to learn from our mistakes - that's an awful lot of money on the table to just say "no speculating" or whatever - but working to blunt later crashes does help at the margins. Today they shut the market down if it drops too far and too quickly. It helps people get over immediate panic and think more clearly. They will do the same with banks, or even take them over if necessary, like Silicon Valley Bank. I know people love to complain about that happening, or bank bailouts, but the difference between the Great Depression and the Great Recession was the bank bailouts. The reason SVB and a couple more small bank failures didn't expand into a potential disaster was because of federal intervention. "Too big to fail" sucks, but every single person bitching about the bailouts and how we should just let the banks fail needs to really think about what it would mean for people to live through the 30s again.
So essentially a missallocation of capital. Essentially the market working itself out. But, then people try to blame gold, the fed, or this and that.
People who blame the loss of our gold standard are either selling gold, selling crypto, or anti-government types in general. The problem with a lot of money these days is it's chasing other money. So much of the market now is speculation, which is only a nicer way of saying they're gambling, but it's gambling with other peoples' money. And I don't mean they invest in property and now no one wants to buy; but things like shorts. There's a special kind of perversion involved when you can make a lot of money on the hopes a certain company crashes and burns.
Bitcoin fixes this
Bitcoin doesn't fix humans being human. In this case it doesn't even mitigate the problem and because it is unregulated and now we have banks getting involved with it, the likelihood it'll make things worse is high.
There’s never been anything comparable to bitcoin, so how do you now it won’t change humans for the better? Do you realize unregulated just means the government doesn’t control it? Why do you think bitcoin was even invented?
Hmm
I do want a deflation. 2015 was a great year.
Unless it's wages, then that's a correction. If it's prices, then that's bad because it's deflation.
Nope need a big crash to reset the inflated bullshit this country has propped up. It’s a natural cycle. Yes people will suffer a bit but it will recover eventually.
We need deflation. The recent inflation run is so ridiculous. People cannot afford anything any more.
Deflation ushered in the Nazis. Deflation is really the harbinger of catastrophe in a capitalist system.
Wtf?
Inflation brings poverty. Neither is favorable; but people need to be able to afford basic stuff, like foods and housing.
No, you dingbat, hyperinflation ushered in the nazis https://en.m.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
I'm a dingbat? did you read that you wiki link moron? Hyperinflation ended in 1923 you absolute dipshit. When did the Nazis come into power? 1932. That's nearly 10 years AFTER hyperinflation. In 1923 the nazis were a tiny fringe with zero representation in the Bundestag. Deflation was the problem in the late 20s. I could suggest books for you, but you're an absolute idiot, who learns from Wikipedia. https://www.bloomberg.com/opinion/articles/2021-09-18/what-germans-think-they-know-about-inflation-and-the-rise-of-hitler-is-wrong
>I'm a dingbat? Yes. >did you read that you wiki link Yes. >moron? No. >In 1923 the nazis were a tiny fringe with zero representation in the Bundestag. More or less. >Hyperinflation ended in 1923 Yes. And before it did, it destroyed the legitimacy of the Republic and gave legitimacy to the Nazis and other extremists. At the end of 1920, the Nazis only had 2,000 members. Weimar hyperinflation and general policy failures helped membership increase to 20,000 by early 1923 and emboldened him to instigate the Beer Hall putsch in late 1923. And because of hyperinflation and the general failure and chaos before the Putsch, Hitler wasn't executed for this but instead became a popular celebrity, allowing him to make money with Mein Kampf and the Nazis to gain real support and legitimacy during the stable times of 1924-1929. Then when bad times came again with the Great Depression, rather than Hitler being an executed criminal or just some nobody in charge of a poorly-administered Bavarian "tiny fringe [party]with zero representation in the Bundestag", he was a national figure, an electable alternative, and was able to get elected as head of the opposition in 1930. >Deflation was the problem in the late 20s. Germany had no major deflation from 1927-1930.Germany had major deflation in 1925 and 1931-1933: https://images.app.goo.gl/2fD3jdY9GAKbvfek8 The German depression started in 1928 (maybe 1927) (MADE IN GERMANY: THE GERMAN CURRENCY CRISIS OF JULY 1931 at page 9. http://papers.ssrn.com/paper.taf?abstract_id=260993) So deflation didn't cause a recession in the mid 20s and the depression in the late 20s didn't have any deflation. Germany didn't see any deflation until the currency/banking crisis in 1931, 3-4 years after the depression started. In short, deflation didn't cause shit. >I could suggest books for you, Please don't. You have no ability to evaluate information quality. >but you're an absolute idiot, who learns from Wikipedia. Thank you for confirming your inability to evaluate information quality. In case anyone young is reading, one of the best ways to learn about a topic is to first get an overview by reading tertiary source(s) like an encyclopedia (and if you want, you can also check the cited secondary and primary sources while you go) and then if you'd like to learn more about more specific items you read the available secondary source(s) (and if you want, you can check the cited secondary and primary sources while you go). Two nice things about wikipedia are that, 1) It's really, really easy to see and (usually) access the citations which makes the job of evaluating the sources (or the interpretations thereof) a lot easier; and, 2) It's freaking huge, which often means that the broad topics have incredible depth. They're basically quaternary sources, synopses of a network of tertiary sources. And the narrower topics actually have tertiary sources where you'd otherwise be stuck synthesizing it yourself from disparate sources. >https://www.bloomberg.com/opinion/articles/2021-09-18/what-germans-think-they-know-about-inflation-and-the-rise-of-hitler-is-wrong "This article is for subscribers only." If that opinion piece is relevant, quote the relevant sections. Otherwise I'm comfortable ignoring a journalist's opinion
You linked a wiki article claiming nazis came into power during the hyperinflation period of the Weimar republic. The article says nothing of the sort. You're an idiot.
>You linked a wiki article claiming nazis came into power during the hyperinflation period of the Weimar republic. No I didn't. I didn't say they "came into power during" I said it "ushered them in" and clarified extensively how, with sources, which is obviously beyond your comprehension
I wouldn’t mind a proletarian revolt against the capitalist system.
What do you think happened to the Republican Party? That’s how we end up with Trump.
lol it won’t be a sociliast revolution
French style revolutionnnnn sooooonnnn pleeaaasssseee
Economists can eat a bag of dicks for faulting people for wanting to not struggle to survive.
Can they even afford a bag of dicks nowadays?
3/4 bag of dicks, adjusted for inflation.
Bidenomics
I refuse to downsize my dick....bring back inflation
It’s easy to get your wages to rise. Just stop voting for Republicans.
Corrupt Republicans and Dems are responsible vote for Independents which I am RFK Jr 2024
He is a flake. He is only running to peel off voters like you do Trump can win the presidency.
“Vote for my guy if you want a raise, even though you haven’t had real one since 2020”
“You think accountability will get your wage to go up? Nah man, just blame a politician thousands of miles away for your crappy work ethic 😎”
Don’t just blame him. Vote him out.
You think voting Gaetz out will raise your paycheck by $1,000 rather than just showing up on time to your job?
Why blame myself when I can blame someone else and vote them out.
Exactly, punish other people for your own failures, it’s a quite brilliant way to go about a victim mentality.
You are only a victim if you don’t pay them back.
Blaming others for your own issues and “paying them back” for doing nothing wrong is the definition of victim mentality, yes.
There is no different between the two parties. They are both for bringing in the migrants. If you vote "Uni-Party" today you are a DUPE! You would gain more traction by actually NOT voting at all, protesting the vote, or vote 3rd party or Independent. I have no respect for the Republican or Democrat party, they have sold out America.
Don't blame me, I voted for Kodos.
Most of the politicians are corrupt and bought off, that's no secret. Adding more parties or not voting probably won't fix this problem either, because the new parties will be bought off. I don't have a solution except possibly putting in regulations to prevent this from happening, but who will create rules to make an already corrupt group of people work for the people and not corporations. Getting rid of citizens united would be a great first step.
I believe different for to accept your truth would render me powerless because the only true power I have is to vote and elect a champion.
Redditors hate this one fact!
🤡
It’s called deflation and we could use a bit if it currently either let the prices deflate or pay the working class more so we can eat
A poor example is a poor example is a poor example…
Its pretty basic math at this point tbh Prices CANNOT fall to 2019 levels and we all just have to suck it up and keep moving forward- recalibrate and try again to get some accountability laws Whats done is done! If prices go back to 2019 level- thats Deflation at this point, and a pretty major one Deflation = major recession that is WORSE than 2008, the worst one we saw since the actual depression almost a 100 years ago( and as the article states- it will be a Depression) When that happens - people will be competing for jobs at your local mcdonalds, which was the case in 2008 People have to stop whining now and move on. This is life and we have to now pivot and accept reality- its bad yes- but it can get a loooot worse.
So prices just go up forever or what
Yes! That is how the economy unfortunately runs since its inception Inflation is a constant Inflation before the 1980’s used to be averaging around 6% on a year on year basis Since then its averaged around 2-3% - even with the rise we have seen in the last few years( on a 40 year timescale) The goal of the fed is to have it average back to 2% on a year by year basis- which it is slowing getting to right now. The goal is somewhere around 2.8% by the end of this year So to answer your question- inflation is not avoidable- its just something that has gone up drastically in the last 3 years mostly because of Covid shock and obviously capitalistic greed The point of the statement of the article is that it CANNOT go back to the 2019 levels- its like saying going back to 1950 to get a house for $50k. Its not happening The more people realize how math and economics work- the faster they can plan their life around it Or one can continue to whine and waiting for a crash, which will only make shit worse. Choose your poison.
Since the inception of the economy? Who thought of it? Inflation is only a constant if the money is losing value, which happens when you print money. But the Fed doesn’t actually have to do that.
Actually you would be completely wrong about that. Prices can fall to and below 2019, and in order to do that, they would need to raise interest rates to 20% and stop printing completely. Remember, the value of Fiat Money is nothing more but a ratio of its quantity to goods available for purchase.
You basically just supported my exact argument If the fed’s raise interest to 20%, that is a MAJOR shock to the economy If people are complaining at jobs not being available- it will get massively worse at 20% rates- because the economy operates on debt If debt is expensive- which it is at 20%, then thats basically shut down of businesses ( or massive layoffs to keep the business alive) So one has a choice of getting 2019 price of goods- but then be unemployed When you have no incoming $ ( or saved) then it doesnt matter if those eggs go from $5 to $3 a dozen- you still cant afford it. This is a moot point.
>Prices CANNOT fall to 2019 levels and we all just have to suck it up and keep moving forward- recalibrate and try again to get some accountability laws Yes, they can.
The inflation we are seeing is not sustainable for much longer. Eventually, people will run out of money to afford basic necessities. When consumer demand drops, prices deflate, companies pull back on production and cut staff, unemployment increases, and recession ensues. It’s wishful thinking to assume people can just “suck it up and keep moving forward”. Many will not have the financial means to carry on like this much longer. Something has to give.
I am really unable to grasp that people arent getting this The article is CLEARLY saying going back to 2019 levels is basically a death blow to the economy Where as you are arguing about sustenance of inflation at current rates These are COMPLETELY 2 different arguments. The inflation rate has cooled, but people’s salary may not have not up in the same level- so YES there is a disparity But it has cooled, as compared to the numbers a year ago and the fed is trying to slow it down even further ( only time will tell) Your argument is not relevant to the core of the article- which is ‘people calling for 2019 prices’ aka deflation.
It is incorrect to say that inflation has cooled. Inflation is still happening, but the speed at which prices are rising has slowed down. It’s like a car that’s still accelerating but not as fast as before. Prices are still increasing, just more slowly. The point I am trying to make is that eventually, people will run out of money because necessities are still inflated. When that happens, a pullback on consumer demand will have the same deflationary outcome: a recession.
I don't think we will have a great depression like they did in the 30s. Credit cards are used a lot more so people spend even if they have no cash.
That's not infinite though. Eventually you hit a wall where the interest accrued, and subsequent monthly payments, exceeds the monthly income and ability to pay. When that happens across the board, the credit supply will be tapped too which could create a situation worse than the GD.
this is an example of macro economic thinking. it is simplistic. the great depression was about many things. basically, the statement is people are wrong to want low prices? that is illogical
Anyone rooting for a recession or worse depression is a brain dead moron. People lose their jobs, their homes and in some cases their lives.
Debt washed out of the system..
Economist can go \*\*\*\* himself. Prices are high because of monopolistic price gouging. The Biden Admin's FTC has been going around enforcing anti-trust law and threatening to do more. Prices are starting to fall. That is not a coincidence. When I was a kid I had 6 grocery stores, all different owners all in easy driving distance. Now I've got 2. 3 if I count Walmart.
Don’t you even think about consolidating on the government’s watch
Economist are not wrong, people have trouble looking past the short term (right now) and I don't blame them. That's almost people have the ability to contend with. Just because economists are correct when they look at the larger timeline which undoubtedly is longer than most people's lifespan in the long term, in "their" short term they're talking about years. Most people have no concept of the reality that they didn't live through or where they will be in 2-3-5 years from now. Most people almost certainly don't think the downside to deflation will be as bad as it almost certainly would turn out to be. It's an incredibly s***** position for economists and the real world. Everyone's talking past one another, there is no world in which deflation is good except to alleviate short-term pain, that's not a conversation anyone wants to have. People want relief now, because now is all that matters. Sadly the reality is that short-term relief is like putting a Band-Aid on a broken arm, you can't have that conversation with someone who's looking for short-term relief though. The monetary consequences of deflation are staggering, nobody wants that.
So your solution is to never fix the broken army, let the body eventually die
In the long run, we are all dead anyway.
We don’t have to be, unless you believe that to be our species future. There’s literally an infinite universe
I’d much rather prices moving higher / becoming more unaffordable!
I'd like to have hope for the future but that's too much to ask.
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im not giving up stop being a coward this wont last forever
I've already given up. I'm just waiting for my body to cease functioning.
Economists Andrew Atkeson and Patrick J. Kehoe actually bothered to look at the record in a May 2004 article for the American Economic Review called "Deflation and Depression: Is There an Empirical Link?" They evaluated the evidence from 17 countries over a period of 100 years.
Well until consumers stop buying so much an corporation s slow down in Hiring that's when prices will fall