patrick.net

Al_Sharpton_for_President says

If everyone expects prices to rise, say, 3 percent over the next year, businesses will want to raise prices by (at least) 3 percent,

Nonsense. Prices are set to what the market is willing to pay. A merchant cannot raise his prices arbitrarily or he will lose business to competition. If cost of production goes up for everyone in that business (transportation of materials and product due to higher fuel prices) then those cost can be passed on because the competition has the same issue.

The true cause of economic inflation is careless money printing.

The exptectations theory does not imply arbitrariness. It in fact describes the motvation for market behavior.

Al_Sharpton_for_President says

The exptectations theory does not imply arbitrariness. It in fact describes the motvation for market behavior.

Are you sure?
Most people expect that gas prices will go higher in the future. So as a gas station, I can raise my prices now without losing business? Same with grocery stores?

If prices are dictated by supply and demand, i.e., if expectations of higher future prices causes an increase in near-term market demand, yes.

There is inflation. Cost of everything we buy is up.

I don't think deep state wants too much inflation. About 3-4% would be OK for them to inflate away retirement benefits and debt. The only problem with it is that it never stops at 3-4%, it will go parabolic and this may end up with deep state hanging from lamp posts.

Dumb woke politicians is the real case of out of control money creation so does the inflation. At my hood seeing lowest gas $5.09 @76 station never saw it before and not going down for last 2 weeks. I have a feeling that every lobby woke is in DC to grab as much as they can under fancy name "infrastructure". Covid never go away so does the inflation. Covid is economic loot. Vote for non woke to expect some change.

The sheeple will be placated by the nominal wage increase versus real decline in purchasing power and standard of living shell game.

Bd6r says

this may end up with deep state hanging from lamp posts

That would be the best possible thing for America.

Bd6r says

and this may end up with deep state hanging from lamp posts.

Your lips to God's ears.

Inflation is the natural result of fiat currency. There is never a need to artificially create it. The only propaganda around inflation is from central banks lying to you about it.

We have had periods of both inflation and deflation in this country.

The 30's were a period of deflation. Prices declined, but not as fast as wages declined. Savers were decimated because of thousands of bank failures.

The late 70's early 80's were a period of inflation, but wages mostly kept up. Savers were decimated as their savings purchasing power decreased at double digit rates for a number of years.

It is mathematically impossible for the majority of savers to even maintain their purchasing power let alone increase it over long periods of time.

Crypto and real estate

Robert Sproul says

Bd6r says

and this may end up with deep state hanging from lamp posts.

Your lips to God's ears.

On one hand yes
On other no
I lived through collapse of one superpower and it was not fun at all, I don't need that the second time

Misc says

The 30's were a period of deflation. Prices declined, but not as fast as wages declined. Savers were decimated because of thousands of bank failures.

This is a common misconception. There was temporary deflation due to speculators losing their shirts, but people who weren't gambling came out unscathed. It was government interference that caused the Great Depression, not the stock market crash.

Jack Dorsey, Aszhole of Twitter commented that hyperinflation will hit the US and the world soon.

Misc says

We have had periods of both inflation and deflation in this country.

The 30's were a period of deflation. Prices declined, but not as fast as wages declined. Savers were decimated because of thousands of bank failures.

The late 70's early 80's were a period of inflation, but wages mostly kept up. Savers were decimated as their savings purchasing power decreased at double digit rates for a number of years.

It is mathematically impossible for the majority of savers to even maintain their purchasing power let alone increase it over long periods of time.

What should savers do? I was taught to live below my means and it has become a habit.

You could buy stock, gold, or land, if you can find any at reasonable valuations.

Patrick says

You could buy stock, gold, or land, if you can find any at reasonable valuations.

That is why in 2014 I used half my cash to buy a massive house. I thought Hillary was going to win the presidency and do what Biden is doing now. I figured houses would inflate to the point where only multi-generations could afford them, so my house is build to accommodate owners upstairs with younger kids, elderly parents on main floor, and boomerang kids in the lower level. 3 car garage and oversize driveway for all those cars. I turned out to be wrong in 2014, but might prediction may turn out true anyway.

I'm not 100% sure about hyperinflation. Part of me thinks we're going to enter a depression and it will be hella deflationary.

Another thought is they are pushing the inflation narrative to get you to spend your $$. Then crash the markets and buy all your shit up on the cheap.

Meanwhile, you went all in on gold.i dunno. Just speculating.

joshuatrio says

Part of me thinks we're going to enter a depression and it will be hella deflationary.

If that happens, I will be shamelessly buying up assets. I have no pity on anyone who used easy credit to bid up land/home/auto prices and now must sell in bankruptcy for pennies on the dollar.

HeadSet says

Patrick says

You could buy stock, gold, or land, if you can find any at reasonable valuations.

That is why in 2014 I used half my cash to buy a massive house. I thought Hillary was going to win the presidency and do what Biden is doing now. I figured houses would inflate to the point where only multi-generations could afford them, so my house is build to accommodate owners upstairs with younger kids, elderly parents on main floor, and boomerang kids in the lower level. 3 car garage and oversize driveway for all those cars. I turned out to be wrong in 2014, but might prediction may turn out true anyway.

I am not sure how house will fare in cannibal anarchy situation, if said house is in 'burbs. Productive farmland or small town house with land may be a relatively safe asset. Large house on small land plot may become worthless under certain situations, see Detroit.

Also, and I may be very wrong, but the recent covid stimmies may have been a test run to prevent deflationary collapse and turn it into inflation

Bd6r says

I am not sure how house will fare in cannibal anarchy situation

In a cannibal anarchy, useless. But I was seeing more like high house inflation that would bring Japan style 100 year loans.

I'm not on the hyper/ regular inflation bandwagon.

However, given the amount of press coverage trying to convince us that inflation is here and will be for some time, I can't think of any better alternative available to the average joe (like me) than investing in staple stocks - typically dividend payers. Prices go up, so do cash flows and stock price. I'm not smart enough to pick individual winners but fortunately there are a number of easy index ETF's that meet the need.

Real estate is of course a reasonable idea but requires a lot more work than I'm willing to do. I'm lazy in addition to not being too smart.

I don't invest in gold and bitcoin because that isn't investing, it's speculating. It's greater fool theory. Neither has earnings/ cash flow. I can't figure out what I'm buying but I know the transaction costs are 10% or more going in both directions. If I could just make the market in either of those two I would be all in, but I don't want to own any of it.

Patrick says

You could buy stock

Assets without intrinsic value don't do well during hyperinflation. And stocks are already massively inflated.

joshuatrio says

Part of me thinks we're going to enter a depression and it will be hella deflationary.

The debt is leveraged to such an astronomical level, their scared shitless to stop printing.

joshuatrio says

Meanwhile, you went all in on gold.i dunno. Just speculating.

No problem there if you actually bought real gold, that you actually have in your physical possession.

stfu says

Prices go up

Forever and ever. I remember saying that back in '04...

stfu says

I don't invest in gold and bitcoin because that isn't investing, it's speculating.

Half right. Bitcoin is a measurement of compute power, nothing more. But to say gold is speculatory goes against all of economic history. If you can't get out of the central bankers box first, your investments will all have the same result.

Al_Sharpton_for_President says

Inflation expectations

were about 99.9% by 1978, I know I factored it into everything. Was getting rent increases every six months. I had a merit raise and blanket raise (where everyone in the company gets a raise) go into effect on the same check in 1977, thought I'd never need a raise again. Within six months a rent increase ate it up. Also, in those years there were about five tax brackets and people kept getting kicked into a higher bracket with no added buying power. We could never have imagined it would be back to 3% by 1983!

NuttBoxer says

intrinsic value

Now there is a quaint phrase.

NuttBoxer says

This is a common misconception. There was temporary deflation due to speculators losing their shirts, but people who weren't gambling came out unscathed. It was government interference that caused the Great Depression, not the stock market crash.

My recollection is that "panics" of 1910's and 20's were typically short-lived, much less that a year. Difference in 1929 was massive gubbermint involvement which made Depression stick around and cause more and more gubbermint intervention.

The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of "fiscal stimulus," Harding cut the government's budget nearly in half between 1920 and 1922. The rest of Harding's approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

The Federal Reserve's activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction."2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.

https://mises.org/library/forgotten-depression-1920

NuttBoxer says

Misc says

The 30's were a period of deflation. Prices declined, but not as fast as wages declined. Savers were decimated because of thousands of bank failures.

This is a common misconception. There was temporary deflation due to speculators losing their shirts, but people who weren't gambling came out unscathed. It was government interference that caused the Great Depression, not the stock market crash.

There is a misconception that the government caused the Great Depression. It wasn't. It was the failure of about 7000 privately held banks that caused the Depression.

Property prices and thus collateral grenaded. Loans weren't repaid, there was a stunning amount of unemployment causing wages to decrease year after year and that caused defaults on even more loans.

The private banks being insolvent kept there from being any additional credit added to the system.

People with bank deposits are not considered "speculators'.

Prices decreased year after year, but not as fast as wages did.

https://www.google.com/search?q=how+many+banks+failed+between+1929+and+1933&sxsrf=AOaemvI44v6nQ8AOH74wYBqXIlmJ_C0GyA%3A1635224819484&source=hp&ei=84x3YbrTGtXP0PEP2MGS0AY&iflsig=ALs-wAMAAAAAYXebA6YRgk3fsjwNnxY_FMm5E5QT_6vV&oq=how+many+banks+failed+between+1929+and+1933&gs_lcp=Cgdnd3Mtd2l6EAEYAzIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQhgM6BwgjEOoCECc6BAgjECc6CgguEMcBEK8BECc6DgguEIAEELEDEMcBEKMCOgsILhCABBDHARCjAjoICAAQgAQQsQM6CwgAEIAEELEDEIMBOgsILhCABBCxAxCDAToICC4QsQMQgwE6CAgAELEDEIMBOggIABCABBDJAzoGCAAQFhAeOgkIABAWEB4QiwNQwxNY70dgomZoAnAAeACAAfgBiAG2E5IBBzExLjExLjGYAQCgAQGwAQq4AQI&sclient=gws-wiz