Hyperinflation

[tehpope]

You guys are missing the silver lining to inflation.

https://twitter.com/CNBC/status/1413132513350803460

It's not certain rising wages will be enough to outpace inflation

As inflation takes hold, wages may increase, too. The question is, will it be enough to outpace the rise in prices.

www.cnbc.com

 

[Large]

This title made me want to post terrible fetish porn here but I don't want to go looking for it just to have it deleted by a jannie two hours later so have this post instead.

 

[Sexy Senior Citizen]

This title made me want to post terrible fetish porn here but I don't want to go looking for it just to have it deleted by a jannie two hours later so have this post instead.

I can sum it up in two words: Andrew Dobson.

 

[MarvinTheParanoidAndroid]

why cant it be "inflation" not hyperinflation?

Because everybody was panicking that the dollar was on a trajectory to hyperinflate a few months ago.

 

[mindlessobserver]

Because everybody was panicking that the dollar was on a trajectory to hyperinflate a few months ago.

I think it was more an argument over what people meant by hyperinflation. We are going to see some nasty inflation in the coming months but will it be 50-100%? Probably not. Will it be 5-10%? Most likely. What I don't like is the CPI spike coinciding with a collapse of the Treasury Bond Yield. That combo is a huge red flag because if Prices are increasing money should be going into further investment to profit from a hot seller economy. Instead it's going into long term debt instruments that at current rates will pay out at a loss. Only time that happens is when investor capital smells a massive "correction" on the wind.

 

[160048]

ok no one has ever explained this to me, but what i want to know is why inflation exists. Like 99 percent of regular people dont care or cant do anything about it, like your plumber wont start charging more simply because they heard on the news inflation rose, who cares that there is more money in a market, since the amount of money is so big if we have 4 trillion is circulation rather then 3 trillion, it affects no one individually. like what person is like, holy fuck, the us dollar inflated by 4 percent this year, time to increase the cost of my products for no fucking reason.

 

[Kujo Jotaro]

ok no one has ever explained this to me, but what i want to know is why inflation exists. Like 99 percent of regular people dont care or cant do anything about it, like your plumber wont start charging more simply because they heard on the news inflation rose, who cares that there is more money in a market, since the amount of money is so big if we have 4 trillion is circulation rather then 3 trillion, it affects no one individually. like what person is like, holy fuck, the us dollar inflated by 4 percent this year, time to increase the cost of my products for no fucking reason.

Not to mention most of this money is not tangible it's just another 0-9 on a ledger somewhere. The USD is basically already a crypto currency to banks and other large financial institutions.

 

[Un Platano]

ok no one has ever explained this to me, but what i want to know is why inflation exists. Like 99 percent of regular people dont care or cant do anything about it, like your plumber wont start charging more simply because they heard on the news inflation rose, who cares that there is more money in a market, since the amount of money is so big if we have 4 trillion is circulation rather then 3 trillion, it affects no one individually. like what person is like, holy fuck, the us dollar inflated by 4 percent this year, time to increase the cost of my products for no fucking reason.

Because if you claim that inflation doesn't exist and never change your prices to suit, you will eventually find that your wallet is empty. Prices are sticky, as it's called, meaning that they don't instantly change to meet market conditions, but they have to change eventually. A 4% change is not a lot, but when that happens every year, it becomes 8%, then 12%, then 17%, then 22%, and at some point you'll have to increase your prices or else you will have no money anymore.

 

[Baroque]

ok no one has ever explained this to me, but what i want to know is why inflation exists. .

Inflation is an important component to a healthy economy; we WANT inflation and the FED targets inflation at 2% per year. Why? Because if we didn't, people would hoard their money, which is then money that can't be put back into the economy. When you deposit $100 in a bank, the bank doesn't store that money in a vault (only a small percentage must legally be stored), the bank loans that money to someone who is, for example, looking to expand their business. This is same economic principle of "efficient market allocation of resources to where they are best utilized." Without inflation making rich people's money worth slightly less every year, they would have much less of an incentive to invest it (ideally you invest your money to get a rate of return at our exceeding inflation if you want to maintain the inflation-indexed value of your money), and in the case of deflation you really have problems because then the absolute incentive is to hoard your money since just holding it becomes an investment in itself.

The problem here and elsewhere is that economics used to be wholly philosophical, so a philosopher's thoughts on the origins, drivers, and offsets to inflation used to be all there was. Now with econometrics, we can test these fundamental truths and, like so often with "proven science," find the evidence wanting. Further, claims like "inflation and money supply are feedback loops" aren't as supported as many people ideologically NEED them to be. Add to that the precious metal lobby, who love to fleece anyone they can with their "hedge against inflation!!" bit, and you get a mess.

 

[IAmNotAlpharius]

All the fast food jobs around me are 15 dollars an hour now. Congrats Democrats, we know have a 15 dollar minimum wage! Poverty is over!

 

[Adolphin]

Inflation is an important component to a healthy economy; we WANT inflation and the FED targets inflation at 2% per year. Why? Because if we didn't, people would hoard their money, which is then money that can't be put back into the economy. When you deposit $100 in a bank, the bank doesn't store that money in a vault (only a small percentage must legally be stored), the bank loans that money to someone who is, for example, looking to expand their business. This is same economic principle of "efficient market allocation of resources to where they are best utilized." Without inflation making rich people's money worth slightly less every year, they would have much less of an incentive to invest it (ideally you invest your money to get a rate of return at our exceeding inflation if you want to maintain the inflation-indexed value of your money), and in the case of deflation you really have problems because then the absolute incentive is to hoard your money since just holding it becomes an investment in itself.

The problem here and elsewhere is that economics used to be wholly philosophical, so a philosopher's thoughts on the origins, drivers, and offsets to inflation used to be all there was. Now with econometrics, we can test these fundamental truths and, like so often with "proven science," find the evidence wanting. Further, claims like "inflation and money supply are feedback loops" aren't as supported as many people ideologically NEED them to be. Add to that the precious metal lobby, who love to fleece anyone they can with their "hedge against inflation!!" bit, and you get a mess.

An economic downturn, a reduction in production, could trigger an inflationary crisis as the money supply increases because of the available goods becoming fewer. Thus prices skyrocket, and the money becomes worthless. This will further reduce consumption, which could lead to production reduction even more. I seriously doubt that the US will enter in such an inflationary spiral, but goods will be expensive until production can adjust and the economy rebounds back, which means that the money supply will be matched. However, another issue is, that in the last decades, the dollar is under constant devaluation and this crisis will devalue it even more.

 

[Beavis]

All the fast food jobs around me are 15 dollars an hour now. Congrats Democrats, we know have a 15 dollar minimum wage! Poverty is over!

What city do you live in?

 

[IAmNotAlpharius]

What city do you live in?

A barely conservative one. That won’t last because of the California exodus. I’ll leave it at that. The dems here have been drumming for years about increasing the minimum wage to 15 dollars an hour despite the cost of living being way better than in California or most other Democrat states. So our lower minimum wage could actually pay for rent and the essentials.

 

[Hollywood Hulk Hogan]

Inflation is an important component to a healthy economy; we WANT inflation and the FED targets inflation at 2% per year. Why? Because if we didn't, people would hoard their money, which is then money that can't be put back into the economy. When you deposit $100 in a bank, the bank doesn't store that money in a vault (only a small percentage must legally be stored), the bank loans that money to someone who is, for example, looking to expand their business. This is same economic principle of "efficient market allocation of resources to where they are best utilized." Without inflation making rich people's money worth slightly less every year, they would have much less of an incentive to invest it (ideally you invest your money to get a rate of return at our exceeding inflation if you want to maintain the inflation-indexed value of your money), and in the case of deflation you really have problems because then the absolute incentive is to hoard your money since just holding it becomes an investment in itself.

The problem here and elsewhere is that economics used to be wholly philosophical, so a philosopher's thoughts on the origins, drivers, and offsets to inflation used to be all there was. Now with econometrics, we can test these fundamental truths and, like so often with "proven science," find the evidence wanting. Further, claims like "inflation and money supply are feedback loops" aren't as supported as many people ideologically NEED them to be. Add to that the precious metal lobby, who love to fleece anyone they can with their "hedge against inflation!!" bit, and you get a mess.

Yep, and inflation also makes it easier to pay down debts, since (in theory) you should be getting more money as income due to inflation.

As you said, inflation at 2-3% per year is good. Hyperinflation is very, very bad

 

[MarvinTheParanoidAndroid]

Yep, and inflation also makes it easier to pay down debts, since (in theory) you should be getting more money as income due to inflation.

*if you get a pay raise.

 

[Hollywood Hulk Hogan]

*if you get a pay raise.

Hence the "in theory" part

 

[Willie Thrills]

Hence the "in theory" part

You mean if you don't apply your theory correctly, surely.

There's no "in theory" to speak of. That's like strapping a balloon to yourself and expecting it to lift you, then saying "Ah well, the displacement isn't adequate, but it works in theory!"

That said, what you're describing is just shorting the USD, it doesn't need the paid wage to increase - just investing USD into something which will not depreciate in value to the same extent will increase its value in USD - problem is, unless you're Jewish, already rich, a senior member of some kind of Freemason nonce lodge, you won't be able to get this kind of loan for any significant amount. You'd be far better off investing in materiel for an armed gang of bandits.

 

[Hollywood Hulk Hogan]

You mean if you don't apply your theory correctly, surely.

There's no "in theory" to speak of. That's like strapping a balloon to yourself and expecting it to lift you, then saying "Ah well, the displacement isn't adequate, but it works in theory!"

That said, what you're describing is just shorting the USD, it doesn't need the paid wage to increase - just investing USD into something which will not depreciate in value to the same extent will increase its value in USD - problem is, unless you're Jewish, already rich, a senior member of some kind of Freemason nonce lodge, you won't be able to get this kind of loan for any significant amount. You'd be far better off investing in materiel for an armed gang of bandits.

Not true... it also would apply to mortgages.

 

[Willie Thrills]

Not true... it also would apply to mortgages.

Yes, a good mortgage is placed to short the currency it is bought in. This is what happened under Thatcher in the UK, with the massive inflation of the 1980s and the mass sell-off of council houses. Inflation + supply = lots of people getting cheap houses, followed by a period of massively increasing housing costs.

 

[Sped Xing]

Not true... it also would apply to mortgages.

This is why people keep teasing me with "hyperinflation." I bought a medium-sized farm in 2020, on a low, fixed interest rate.

Since my income comes almost all at once at the end of my fiscal cycle, and my expenses are mostly at the beginning, everything would be rainbows and kisses for me if the dollar collapsed.