83
Which of course does absolutely jack shit for the price increases that have already occurred. Low inflation is not deflation.
Take that further and you get the joke that was that AP article:
.1% less inflation still is 2.9% inflation on top of what we still have. Year over year. Good news right?!
This person gets it.
I look forward to population decline in some countries. Deflation will happen then.
It's already occurring. Japan is imploding and it has been a forward indicator for our economy since about the 90s.
Mean while normal people can't afford food.
Don't worry they removed that cost metric from the CPI. That and any other metric that might actually be inflationary ๐ . Don't you feel better though? 2.9% !
CPI inflation is reported higher than 'all items' though...
Grocery is seeing lower inflation. Seems to have come back down to earth.
We need wage growth to continue to outpace inflation like it has been for the past year or so.
I'd have to look but I think wage growth is falling again and of course there's the skewed employment statistics that don't factor in people working multiple jobs... You are dead on though. Inflation is sustainable if the rest of the growth is moving along with it ... unfortunately ours isn't resulting in the overheating.
Multiply that by 3 or 4 and you might get close to a real number.
Nonsense, I track my grocery expenses and it has been right around 15% increased since 2021
Yep. There's a reason they exclude power, food, fuel etc from those calculations... it looks fine on paper but reality is obviously quite different.
Yeah, that's the joke lol. If you just don't add anything inflationary it magically is "under control."
Some inflation is not a problem. After all gold inflation is 1.6-1.8% per year according to the World Gold Council and many cryptos such as Monero have even less than that. Replacement levels of inflation are not a bad thing but uncontrolled fiat printing definitely is. Giving one group of humans the ability to control what everybody sees as money is guaranteed to cause that group of humans to act in their own self-interest and hurt everyone else.
Inflation isn't inherently bad: an overheated economy, which is the result of inflation, is. This is basically where we are right now. Had the fed not gotten cold feet when they halted the rate increases we'd be in a far better position right now (sans a few banks with bad balance sheets.)
The fiat currency discussion gets murky quickly as most everything's value is relative and derived from something else's value. Crypto is no different and arguably has its own set of issues.
Ultimately regardless of the currency we as a world introduced a ton of what should have been temporary wealth during the COVID period into the markets to save lives and businesses. That money needs to go away to restore balance to the economies. This means a negative inflation rate, or put differently, deflation.
But deflation is a boogeyman according to them and they do not want that to occur and strive to do everything in their powers to prevent it.
Say thank you that they allow you to get 14oz of goyslop at only 30% surcharge
Rates need to tick up a bit higher even.
Then how do hedge funds get the free money to gamble with since apparently that's what the world economy is built on.
They still can borrow, but they need to actually do some level of due diligence that what they throw money at can actually succeed.
They abuse the market mechanics. Same as banks. This is why the carry trade is so levered up. Our borrowing rate here is far higher than in Japan so they are backing Japanese borrowing with US assets for additional leverage and then loaning to us investors against that capital. It's a clusterfuck.
The economy is important. Rates will go lower to protect that.
Central banks I think need to consider a higher neutral rate. Interest rates were too low for too long to try and move GDP growth. In retrospect not a great policy, as it led to a decade or so of inflation in stocks markets and housing.
Why do anything of value if I can just leverage at low rates and dump borrowed money into stocks and real estate?
Central banks tend to be arms reach from government, but maybe they should be doing less and the government more.
GDP growth low? Invest in infrastructure and research. High inflation? Increase taxes.
The economy is doing ok though, inflation is still up. Wallstreet wants lower rates, but listening to them got us extended 0% that ultimately was bad for the economy.
Interest rates going up and forcing over leveraged companies into bankruptcy is also good for the economy.
Maybe tough to get a concensus on where the economy is going to be, a bit of reading tea leaves.
Regardless, agreed on extended 0% being problematic. Out of all the factors dragging us down:
interest rate history, pandemic, demographic shifts, climate change, global instability...
It could be interest rates that are having the largest impact today. Considering it caused such a large wealth transfer, equity inflation, and a drag on productivity.
The whole point of the government not doing anything is that only the central bank can solve inflation through rate hikes.
This ensures further wealth concentration, if the government wasn't lame, more equitable and sane outcomes would be possible.
The AP clearly has no idea how to read charts or infer data. The rate cuts aren't coming. CPI is still over or target rate of 2% YoY... and we are down a massive (checks notes) .1% from 3% after they mutilated the calculations to get the 3%
It's not moving. Sticky inflation. Stagnant. Stag-flation if you prefer.
Edit: I seem to have offended some AP writers.
Corporate propaganda demands lower interest rates, peasant.
Apparently beatings will continue until the propaganda is consumed ๐
Good job Biden!
this post was submitted on 14 Aug 2024
83 points (96.6% liked)
Economics
450 readers
55 users here now
founded 1 year ago