Inflation

[burritos]

There is a difference between mortgage rates and inflation. A mortgage is fixable and fixed, there is no escaping inflation. Mortgage rates impact very few individually. Only if you need a new mortgage and a segment of the home building industry. Inflation impacts 100% of the population.
The wealth and income disparities are different. The "haves vs. the "have not's" is drastically different. That has a multiplier impact.

That said, mortgage rates are still incredibly low. Not so inflation. The devil is the inflation. Most here couldn't give a hoot about mortgage rates.

https://www.bankrate.com/mortgages/historical-mortgage-rates/

https://advisor.visualcapitalist.com/inflation-over-last-100-years/

https://www.nytimes.com/2022/03/14/b...nt%20in%201981.

The reason why the interest rates were sky high was because Fed Chair Paul Volcker jacked the rate up to combat inflation. Much higher than what we are currently experiencing. So yes, there was bad inflation back then. And this eventually brought down inflation, but also raised unemployment to 10+%. Unemployment is not the problem now, just a lack of dream jobs that overpay you.

[Tim]

https://www.nytimes.com/2022/03/14/b...nt%20in%201981.

The reason why the interest rates were sky high was because Fed Chair Paul Volcker jacked the rate up to combat inflation. Much higher than what we are currently experiencing. So yes, there was bad inflation back then. And this eventually brought down inflation, but also raised unemployment to 10+%. Unemployment is not the problem now, just a lack of dream jobs that overpay you.

Stagflation is an economic condition that's caused by a combination of slow economic growth,high unemployment,and rising prices.
Stagflation occurred in the 1970s as a result of monetary and fiscal policies and an oil embargo.
I don't know for sure where this is going, the fiscal policies are the engine. We have an economy that is trying to grow, but fiscal policies that are intentionally throwing gas on the fire and creating an oil shortage. The same old Fed, and same old ignorance about fiscal policies but a huge debt and a claim that more debt, government spending will crush inflation. Maybe it will, but I doubt it.

[Lithium]

Learned a lot in this piece explaining why everyone got inflation wrong last year:

https://www.vox.com/22996474/inflation-federal-reserve-nairu-ngdp-powell

I feel like we must be the only group of workers in America who not only didn’t get any of the stimulus checks that played a causal role in this, but also haven’t seen any of the significant wage growth the last 24 months.

[jacoavlu]

not everyone got inflation wrong. shut down the economy and also create a bunch of new money, don’t be surprised when prices rise

[Tim]

Learned a lot in this piece explaining why everyone got inflation wrong last year:

https://www.vox.com/22996474/inflation-federal-reserve-nairu-ngdp-powell

I feel like we must be the only group of workers in America who not only didn’t get any of the stimulus checks that played a causal role in this, but also haven’t seen any of the significant wage growth the last 24 months.

Well, childcare credits went to some. Congratulations, didn't even need to declare any pandemic need.

[uksho]

Learned a lot in this piece explaining why everyone got inflation wrong last year:

https://www.vox.com/22996474/inflation-federal-reserve-nairu-ngdp-powell

I feel like we must be the only group of workers in America who not only didn’t get any of the stimulus checks that played a causal role in this, but also haven’t seen any of the significant wage growth the last 24 months.

Do I understand the article correctly? Too much money in system , people don’t want to work and inflation goes up ?

[Larry Ragman]

Do I understand the article correctly? Too much money in system , people don’t want to work and inflation goes up ?

Didn’t read the article, but there are three inflationary factors at work. First, too much money in the system (at least one pandemic stimulus too many) drives up asset prices. Second, people not working has affected supply both on the manufacturing side and delivery side. So, supply down, costs up. Third, commodity supply shocks. Economic policy levers are coarse tools.

[jacoavlu]

blame it on putin

[Tim]

Antares
”I don’t know what I’m talking about here. Can someone please explain why I am catastrophizing? Maybe things are fine, and I’ve misconstrued the situation….”

You were correct from the start of this post. I have no doubt just about everyone in the country then and now feel the same way. Some choose to look the other way. Actually, could be intentionally. Five months later, have you noticed any improvements?

[Lithium]

Do I understand the article correctly? Too much money in system , people don’t want to work and inflation goes up ?

And all the services were shut down, so all the money has gone to goods.

I think another issue is that population growth is stagnant so fewer people to absorb all the money raining from the sky.

[uksho]

And all the services were shut down, so all the money has gone to goods.

I think another issue is that population growth is stagnant so fewer people to absorb all the money raining from the sky.

Thank you for explaining
But I was just trying to be sarcastic !

[Tangler]

blame it on putin

Wait…….didn’t this thread start back in Nov?

Oh yeah, sorry, it was covid then.

Got it.

[Random1]

When does transitory inflation end ? Is it at the end of the transition, and what is the transition ?

[CordMcNally]

When does transitory inflation end ? Is it at the end of the transition, and what is the transition ?

Technically, everything is transitory on a long enough timeline. Even if inflation is this high for the next 2 years the Fed will still say 'I told you so' in regards to being transitory.

[Dont_know_mind]

this inflation is good for us bc we own assets and those get inflated too which more than makes up for the increased cost of living. it really sucks if you dont own assets

The meme- low inflation is good for US investors, high inflation is good for US investors too.

Wishful thinking I reckon.

Say you own a company worth $1m
Inflation is zero next year and you sell it for $1m next year: no CGT.
Inflation is 100% next year and you sell it for 2m next year and pay 25% tax on 1m.

It is the same asset/ company but due to inflation, the CGT is much greater under higher inflation.

I’d like to posit a shocking possibility: that high inflation in the US will be good for the 99% and bad for the 1%.