Great. All I know is I'm trading a lot more time for money this year. Way less takeout, avoiding toll roads unless it saves at least 30 minutes, fewer streaming services (will renew on a show-by-show basis), and food is getting so crazy I might start going to multiple stores to try and save money instead of my one consolidated trip to Wegmans.
I'm also stuffing my freezer with meat and have a year's supply of non-perishables, not because I'm a prepper but because I know it'll be so much more expensive next year as to be worth it.
Also my rent is up 6.9%, but that's because I locked it in for two years. Would have been 10.5% for a one-year lease, and that's on top of last year's comparatively conservative 4.5% increase.
And my salary is up a mere 4.5%, and that only because I took on stretch assignments at work.
So I know I can make 65 an hour with side jobs. I've got a few side gigs where I can set my own schedule and work those hours at any time. I could probably push higher if I wanted (75-100 an hour).
When I need to pad my savings I cut some costs but mostly I just work extra hours in side gigs. I couldnt imagine its worth going to multiple grocery stores to compare prices. Shop at 1 store, pay more for some items, work an extra hour to make up for it. I'm building my career and getting paid instead of experiencing traffic, grocery stores at peak hours, check out lines, and loading/unloading food to and from the car/house for a second time.
Does it really make sense for you financially to do that?
Not everyone is interested in performing side jobs, and comparing weekly ads and sales prices can be a 'fun' optimization problem. It's a more productive use of time than whatever the alternative would've been (social media, watching television, etc). Moderately large grocery stores have real web apps these days so you can get pricing data and track it over time. Combine that with the personalized deals / digital coupons and you can create your analysis for what's the best to purchase.
The elephant in the room for any analysis like "It's a more productive use of time than whatever the alternative would've been (social media, watching television, etc)." is that, y'know, maybe people need to find good uses of their time other than working.
But that sounds elitist so nobody says it. Doesn't make it any bit less true.
There's a lot of friction to finding and landing side jobs.
Ones that let you hop in just whenever you feel like it and do one hour of work, with no commitment to minimum hours per week? And that you can put in a single productive hour every so often, without ramp-up time eating that entire hour with nothing to show for it? And that pays enough to make it worth it (i.e. not Mechanical Turk or whatever)?
I don't even know what such an ultra-flexible, low-context (= near-zero ramp-up time even if you only do it an hour or two a week, and some weeks not at all) but still high-paid gig would look like, or how to go about finding it.
Meanwhile, you can value-shop if you feel like it, or not if you don't. Entirely optional and no commitment or outside expectations. You can do it very seriously one week, then not do it at all the next.
>I don't even know what such an ultra-flexible, low-context (= near-zero ramp-up time even if you only do it an hour or two a week, and some weeks not at all) but still high-paid gig would look like, or how to go about finding it.
There isn't a lot of daylight between low-paid, mostly uninteresting gig work and a real side job that takes some marketing, sales, avoiding time-wasting people who want to low-ball you, chasing payment, and some expectation of ongoing commitment.
I do have something drop in my lap now and then from someone I know, e.g. ghostwriting something. And that's fine. It's good money for maybe a day's work overall. But you can have tight deadlines and if you just wait for the phone to ring, you're probably not going to get a lot of that sort of thing.
It does make sense depending on your situation. In a typical US car-dependent cities, yeah, maybe commute is a big productivity killer. Having said that, pushing work all the time also lead to burn out so at some point the mundane tasks become decompressing time (only if you can appreciate sitting idle in traffic; everyone is different).
I live in a city where multiple grocery stores exist within 5 minutes of each other and I do enjoy doing mundane tasks outside my professional life. Those tasks made me pause, clear my mind, and escape the bubble that we called "work" (yes, work itself is a bubble).
I've gone shopping at Grocery Outlet (discount West Coast chain) since I was in grad school and couldn't afford anything else. I could use higher quality stores now, but it's kind of fun to work recipes around their ever-changing (and incomplete) stock, so I tend to make one stop there and then drop by another store on the way home to fill in the gaps (usually just grapefruit juice and fresh bread). It only adds ~15 min. to the trip if I know what I'm missing before I walk in.
I haven't fully priced it out yet, but Wegmans is middle of the road in terms of pricing for my area, depending on the item. Depends on what I'm buying week to week.
We have discount grocers nearby that sell a crap-shoot of stuff the bigger stores are trying to get rid of. If going there before heading to Wegmans can save me $50-100/month after gas, for maybe an extra 30 minutes - 1 hour of time, would be worth it these days.
I think there's a difference in psychology - for lack of a better word - that makes some people have a much easier time managing the outflows than the inflows. For example, I know I have marketable skills - I'm a decent masseur for example - but I struggle mightily bringing in extra money with these kind of side gigs, despite finding them a lot of fun and not exhausting the way work is. I'm not sure if it's a matter of practicality or what, but whenever people explain how they up their income when needed, I don't get it. None of the steps explained seem difficult, but it's a difficult process to get through for me. Maybe the kind of cost-cutting I can do would be similarly difficult for others, I'm not sure.
Sure. https://www.outco.io/careers | Outco is hiring for part time tech coaches. You help people prepare for interview. Set your own schedule. Decent hourly rate.
Buying extra meat when it's on sale and storing it in a chest freezer is probably the best "investment" that most families can make. It usually has a higher ROI than buying stocks or whatever. Even during inflationary times, retailers occasionally end up with excess supplies of some cuts of meat or advertise loss leaders to boost store traffic so you can buy a lot if you have freezer space to store it.
Just be careful that your freezer has a reliable electrical supply. The National Electrical Code has required GFCI protection on garage outlets since 2008 and those can occasionally fail and trip off for no reason. Ask me how I know...
You should also have a high-rated chest cooler ("marine coolers" are great for this) in case of power outages. Move the freezer contents to the cooler, pack with dry ice, place in a cool shaded area, do not touch. It will stay frozen for close to a week.
Put (food grade) dry ice at the bottom of a bowl, then a clean cloth or towel (for insulation), then grapes. Ideally our a loose fitting cover over the bowl.
As the dry ice sublimates, it passes through the grapes which will capture some of the CO2 and carbonate the grapes.
Very fun, and much less practical, use of dry ice…
Fairly common in grocery stores. Regular ice also works just fine, but dry ice is arguably better in freezer applications because, while it doesn't last as long, it is much colder.
A standard residential generator typically holds a gallon of fuel and will burn through that in about 8-12 hours, which is not the ideal way to run a refrigerator. If you run the generator constantly, you'll burn through substantial amounts of fuel, and if you run it only occasionally, you're going to get the kind of temperature fluctuations we're trying to avoid here.
I have a 1kW power station with solar charging, which won't fare a whole lot better; it'll run a fridge for maybe 2-3 days if it's sunny outside.
Low-tech solutions win in power outages of more than a day or two.
My generator holds 2.5 gallons and runs a bit over 24 hours, so that's about right, but I generally have a 15 gallon tank in the shed. That generator can power the A/C, fridge, everything, without having to open it and let cold air out and transfer items.
Power outages typically aren't more than one day, and dry ice is not going to help you for those outages.
I don't have any dry ice suppliers nearby (no the Walmart doesn't stock it), it's not a low-tech solution.
The low tech solution would be a bigger gas canister. 2 gallons a day is not bad at all.
In an apartment building or something I can certain see the use case for dry ice though.
Beans and rice are both great staples and it makes sense to store them if you have the room. However, saying that they're more protein than beef is absurdly wrong.
A dehydrator is another good option for preserving perishables. The shelf life is a bit shorter than most people would think, but properly packed and sealed you can get at least 3 months or so.
A freeze drier will preserve perishables for significantly longer than a dehydrator, but they cost an order of magnitude more. If you have a big garden or something though the three grand outlay might be worth it.
Rice and beans are tremendously more protein than meat... per dollar, which is what we care about, right? Also, they keep longer, also they are more nutritious.
Protein quality matters as much as quantity. I like beans and rice, but the protein in red meat is more digestible and has the optimal ratio of amino acids that humans need.
1. The human body can synthesize protein except for a few amino acids. These are called "essential" amino acids because we must get them from food.
2. Protein "quality" refers to the ratio of essential amino acids, specifically how close they are to the ratio of essential amino acids in our bodies. This metric is used to gauge the rate of absorption of proteins, not the overall amount of absorption.
3. Red meat is not ideal protein quality. Whey protein is actually a lot better because it consists of amino acids in ratios that are better for absorption. Also better than red meat is... rice and beans.
If we're just going to shift goalposts, then you should be eating eggs because they are the benchmark for protein quality and they're considerably cheaper than beans per gram of protein if you have hens. And long term storage of eggs without refrigeration or freezing is a solved problem too, so winter is no problem.
But honestly I think you have some kind of vegetarian agenda, and that's causing you to use some pretty tortuous reasoning to reach your desired conclusions.
The thread is about the price of meat and storing it, so it makes sense to consider how much protein is in the food and how much it costs. To not do so would be like saying, "We need to spend less money on a car. Should we get a cheap car? No, it's not red."
Well originally it was only about storing it, until you replied comparing prices, of course beans are cheaper. But the thread was about efficient long term storage.
But either way I recommend storing and buying both. Definitely not going on a crusade against beans, they're great! (and so is meat)
Another user recommended eggs if you're concerned about protein to price ratio, but it's harder to store efficiently without getting creative.
You could farm your own eggs as I do, but it requires a lot of space (and a love for chickens, they can be a hassle).
Just read about the inflation trimming. It is one of the ways the government make inflation to appear lower than it is, making people happy. In US, the 31% of the goods with highest inflation are excluded, but only 24% of the goods with lowest inflation, making the inflation appear much lower than it is.
Trimmed inflation is a better measure than non-trimmed for goods with substitutes. Bacon going up 1000% in price is not as bad as all food going up 5% in price because you can just stop eating bacon, but you can't just stop eating.
wrong, it's a shitty metric. consumers care about inflation bc it represe ts their quality of life getting more expensive. trimming is the equivalent of saying "lol just downgrade" which is not a good answer.
you can't watch people switch their crab and milk for krab and powdered milk then be like "oh we'll just trim that out of inflation lmao". inflation is not supposed to measure change in average cost of necessities, it's supposed to measure change in a basket of basic goods.
And that basket naturally shifts over time as certain goods which have reasonable substitutes rise sharply in price, as technology changes, as tastes change, etc. It would obviously be silly to compare against the same basket of goods as was used in 1970.
How? If they're always excluding 7% more of the goods whose prices rose more, the trimmed CPI will always be lower than the CPI-U, which some people say is always lower than what people actually experience.
The entitlement adjustments made based on trimmed CPI will always be less than the inflation even the gov't admits people are experiencing.
Its tough when you live in an apartment with no storage. You often are paying more because you dont have room for bulk. Costco is great if you have a garage or basement though
What I do is buy meat in bulk from costco and marinate and preseason then cut it up and vacuum seal it with a $30 vacuum sealer and sousivide bags from amazon.
I can then stuff my freezer with ready to cook chicken, steak, fish, etc. I just take it out the night before to thaw in the fridge.
I find that grocery stores offer better pricing on occasion: ribeyes more than half off the ordinary market price, etc. If you have the vacuum sealing technology, you can be selective in your bulk purchases to maximize the financial benefits of timed purchases. Costco comes with a baseline level of quality but is less competitive on price. As you stock your freezer, you have the bandwidth to 'wait it out' until the next sale comes.
My experience is that the grocery stores around me with meats cheaper than Costco is not the meat you want to buy in bulk and save for later use. The quality is fine but the meat has been sitting on the shelf for a couple of weeks and is near or past the best by date, which is why it's marked way below market price. That being said the solution is to buy a whole bunch, cook it he same day and freeze that. Doesn't work well if you want cooked whole cuts (roast chicken, pan seared steak, etc.) but for the more processed recipes (stews, stir fry, etc.)
I do that sometimes but I started going for thinner cuts of meat and just grill them in 12-15 mins. Sousvide is nice but sometimes takes too long and you still gotta sear.
For nicer cuts of meat, sure, but for flank steak and such, I find it much easier to just let the meat marinate for 24-48 hours and then grill it.
I'm in a pretty small apartment in Manhattan (albeit with an abnormally large kitchen). I can always get the value of my Costco membership in my first trip there, even without a car. Basic goods like Advil, laundry detergent and dishwasher detergent are miles cheaper than other options in Manhattan.
I don't own a car and very rarely Uber (basically only to the airport and even that's purely out of laziness). I just carry two Costco tote bags back to the subway. It's not the most comfortable but it's much better than the costs associated with car ownership from my perspective. If I have a purchase too large for the subway, like a TV, it's cheaper to just rent a Zipcar.
Definitely true, but I'll add that you still need to do price comparisons. Even supposed staples like pasta are often substantially more expensive than at nearby grocers.
I don't buy a lot of pasta, so can't speak directly to that example, but in many cases if you compare like quality, Costco will tend to be cheaper or equivalent, I've found. Although maybe for some of the staples there just isn't really that much difference in quality.
There is also the problem that some folks have (cough, me, yes, I'm talking about me) that even if I go into Costco for 3 specific items, I walk out with 5-10 at least. That's another place to watch for cost and try to be strict about sticking to a list.
- Too many items force you to buy insane quantities that don't make sense even for a 4 person family. The meat, for example, is great quality and value, but it's very hard to make steak or chicken taste good after being frozen, and in no universe should I be eating 4 huge steaks within the refrigeration shelf life. I can never use their giant tub of sour cream or shredded cheese before it goes bad.
- Related to the last point, Costco makes you pay for the square footage in your home to store their stuff, and to really utilize the membership you're gonna want a chest freezer, a whole extra appliance to purchase, run (electricity), and repair. Probably about $50/year in electricity costs.
- Too many of the items that are "great deals" are things most people would probably never buy in the first place when sold at the normal higher retail price. For example, Red Bull is barely over a dollar a can, which is unbeatable, but in no universe should I be buying a 24 pack of Red Bull for any reason.
- Similar to the point above, Costco's deals encourage consumption where the alternative is to not consume anything at all. For example, paper towels are an item where you really should just reduce your usage. Just use dish towels and cloth napkins, toss them in with your regular laundry. There are very few messes where you actually need to use paper towels.
- I know it's not supposed to be a replacement for a grocery store, but I think it's very hard to cook from scratch using whole and minimally-processed foods solely from what Costco sells.
- The low SKU count of the store has never not been infuriating to me. The entire health and beauty section is the worst offender here: good luck having any sort of preference.
- The store wastes your time by making you memorize aisle layout, this is done on purpose to increase aimless browsing time.
- The negotiation practices that Costco uses to keep prices low also causes their inventory to be incredibly inconsistent. One day there will be a pallet of Legos or an interesting brand of trail mix, the next it could be gone or replaced by something else.
- Costco is almost always packed with an uncomfortable amount of people.
- Am I the only one who thinks Costco doesn't have enough cat supplies?? It's all stuff for dogs!! You'd think I should be saving so much money by using Costco for cat litter but...nope, the stuff I buy at Target is about the same cost, they'll deliver it for free in two days, and Costco doesn't sell any form of unscented cat litter product.
- Their lauded snack bar is trash food and I don't believe the common refrain that it's a loss leader. Costco brags about that as a PR exercise. It breaks even at the very least.
- If your Costco is able to sell beer/wine/liquor, that's a pretty nice perk that can pretty legitimately make up for the membership cost over a year, but anyone with a really legit liquor warehouse type of store (e.g., Binny's) isn't going to be massively impressed. Low SKU count is still a problem here, and I don't actually think Costco is that great at curating wines (another PR exercise they like to engage in).
- Don't forget that you have to pay $60 a year just to get in the door. You have to buy enough discounted things to make up for that difference. Sure, it probably makes more sense than Amazon Prime, but that's still a major point to think about.
I think the only reason to be a member is to buy diapers, you'll make up the membership cost very quickly that way. Still, if you can tolerate lower quality diapers, Target's brand is actually lower cost than Kirkland. There are a number of Costco products out there where other store brands offer something at a close-enough price and quality ratio, without having to shell out a membership fee. For many products it might not actually matter that "Kirkland is the best."
I think most of your problem points are for newer Costco shoppers.
I walk in and buy the same stuff every time. I never buy anything I end up tossing anymore. I know where everything is because they don’t change the store much.
Costco isn’t my main grocery store but I’m only in the Costco warehouse 1-2 times per month anyway.
And the lower price of gas makes up for the price of admission for me
The biggest reason I don't like Costco is that it really isn't cheaper than other bulk clubs, or grocery stores for that matter other than Whole Foods or other "premium" stores. Costco has higher prices because they slap organic/non-gmo/free range/etc. labels on most products and the markup isn't worth any perceivable quality increase. The low SKU and frequent rotation of products is also frustrating because I can't count on staples being available, so it also caused more trips elsewhere to find everything I actually need.
But when you think about it, what’s the benefit of driving? For reasonably short drives you don’t save much time with parking in cities and you don’t get any exercise.
Ah, in my case this is mostly replacing buses, so really not the biggest monetary impact either. Still, I will try not to let the excuse to be more active go to waste.
This is the answer. There's no equivalent of "grand theft auto" for bicycles, in fact... law enforcement simply doesn't care most of the time despite usage of things like AirTags or video evidence.
If bikes could park like cars and be safe, a lot more people would use bikes for errands. As it is I only use my bike (even my cheap one) when I can keep eyes on it from the store.
I live in an area where I can very easily and quickly bike to just about anything. But I never do because there's nowhere to store the bike while I'm there so it will get stolen. So I either walk (if I have the extra 15-20 minutes) or feel silly driving a mile or less. I'd rather bike.
The other day I saw somebody go past on a cargo bike, with a big box on the front that in this case had 3 child seats in it. It looked pretty damn usable, and if I could get something like that with an e-bike, even Costco trips (with the steep up-hill return) become feasible.
But if you buy a $5k electric cargo bike and it gets stolen two weeks later, or you have to spend 10 minutes finding a secure place for it everywhere you go...
I don't think this figure is accurate, but even so this isn't something I would want to accept - regardless of a convincing calculation that it is a net benefit.
So what? The costs are kind of meaningless when you walk out of the grocery store with a cart full of frozen food, only to find your bike was stolen. Normal people aren't willing to tolerate that level of hassle and uncertainty just for the possibility of some minor cost savings.
What gear do you have? I use North Face futurelight and if I'm biking at reasonable to slower speeds I don't really sweat that much unless it's more than, say, 22C.
I’ve started riding a bike for transportation during the pandemic; I think the desire to get outdoors more turbocharged cycling during the pandemic, and now people are probably realizing it’s a good way to get around too. So maybe a combination of both.
In any case, I think that’s a good thing! The oil crisis of the 1970s was one of the contributing factors to the Netherlands getting their now-excellent bike infrastructure.
I'm planning on getting a bike to commute to work. I don't have a car right now and also don't really want to buy one because it's a huge expense. My only regret is that it's much harder to get groceries with a bike so I might end up walking instead for that.
Yeah and don't forget that buying the car itself is just the start. Even if you don't get a loan you need to pay for registration, insurance, maintenance and gas.
I have a double kids trailer from Thule. Even with kids it has a ton of storage. It detaches easily and has 4 wheels. The shocks are also adjustable to make it easier on the kids with heavy loads.
Yeah this might be a good idea. Haven't looked into it yet but I might end up doing something like this. A sibling comment mentions a trailer and I like that idea as well
I used to do that, trying to load anything reasonable on a bike makes it handle like serious crap. It jackknifes and good brakes become very important.
Oh yeah, I use Mint for the same. It's really fun watching my cost-cutting measures getting eaten alive by inflation in real-time :) I also find myself slowly sliding down Maslow's hierarchy. I used to be focused on achieving my dream job, now I'm strongly considering work I don't like because it pays more (being the sole income for my family is a major factor there as well). "Good enough pay for awesome work" is not a viable objective at the moment. And I'm lucky to even have that option.
Something's got to give. Thankfully we're starting to see some actual government investment in US industry for the first time in forever, but it'll take years for any results to bring down prices.
Yeah it's amazing how much you can accomplish just by minor things like not using DoorDash constantly and having caps on spending on electronics on Amazon.
YNAB is much nicer than Mint IMO. Mint feels more like a toy.
I've found being obsessive with tracking expenses is a good way to lose motivation (like going to the gym) so it's good to have a simple pattern to get used to.
Yeah its been wild seeing my grocery budget max out before the end of the month, despite having a good buffer a year before. YNAB has a great "cover overspending from" feature that got a good workout this year. Fortunately I got a raise so I used that to bump my food budget.
Anybody who doesn't demand a raise in this environment is a fool.
i honestly hate when everybody's answer to inflation is "just make a budget lol". i haven't used one historically bc i'm a pretty thrifty person but i decided to take somebody up on it and actually make one. you know what i found that could easily be changed? not a damn thing. like i'm a 20 something bachelor so basically my only luxury is buying new guns (which i don't do unless i have a lot of extra cash) and going out with friends (does not eat up much $). so am i supposed to cut like my 1 luxury and just be a machine who goes to and from work? aint like i got a bunch of streaming subscriptions or whatever to remove instead. i make my own coffee at home instead of starbucks and don't eat avocado toast... your move boomers, what's your solution now?
anyway sorry for the vent/rant, but what we need to do is stop loose monetary and fiscal policy that transfers wealth to people who got assets like real estate and stock (boomers, the rich) from people who don't (young people, the poor). but nobody wants to do that...
Hunt a deer or buy a cow, have a butcher process it, then store the processed meat in a freezer. You can have meat for a full year for your entire family at a low cost.
You can grow hydroponic lettuce, indoor tomatoes, strawberries, carrots, etc. There are many good resources to learn. It's also a past time that will teach you one thing or two.
Then, if saving time is what you are looking for... robot vacuum, mop, and a all-in-one cooking appliance (e.g.: Thermomix) can help.
> not because I'm a prepper but because I know [meat will] be so much more expensive next year
Want to take that bet? There's absolutely no reason to expect inflation borne of energy costs and trade disruption to continue. Remember (and so, so many people fail to understand this) that inflation is a year-over-year metric. The report today showing a drop in the "inflation rate" is actually showing an instantaneous decrease in absolute prices (fuels, primarily, like the ones needed to ship the meat you bought because you thought it was going to be expensive).
To wit: It is very likely that what you've done is stuffed your freezer full of meat you purchased at a price maximum.
Also, just because I have to ask: you're so concerned about prices that you're willing to make major changes to your lifestyle. But... you didn't even consider things like "eating less meat"?
Pessimist's take: When thinking about what we trade our time for, TV shows (and films, to some degree) have always been to me an endless source of a time sink for relatively little return. Games, slightly better, more social in some ways, certainly more mentally engaging, but also parasitic of time. To concurrently pay for multiple streaming services is unfathomable to me, moreso right now where, as you point out, your expenses have ballooned and your salary can't keep up. You aren't the only one, and yet it's highly likely (anecdotal experience here) that your friends know more about the last season of a show than they know about how to prep for the looming days, as you are prepping. One would think there's better ways to have downtime than to tune out in front of a box, but these habits are difficult to break.
On the flip side, it's a relatively cheap form of entertainment. $5-30/month and you get access to hundreds or thousands of hours of quality entertainment per service. And there are some awesome shows that my family legitimately enjoys watching together.
It was nice having multiple options on a Friday/Saturday night without the overhead of having to think about subscriptions, because the services combined were the equivalent of one or two hours of my hourly rate a month, and we were in the black month-to-month. So who cares? Now my hourly rate doesn't cover nearly as much as it used to what with everything else through the roof, so I have to care, and I'm lucky to be in that position. Fun times.
That seems a rather judgmental take on the "right" way to have downtime. I'm sure some people subscribe to too many streaming services. I try to keep my eye on how much I use a given service. But I'm still paying way less per month than I did when I had cable TV.
I found having 3-4 streaming subscriptions is still quite a bit cheaper than cable tv or satellite. Also I get to watch what I want to watch when and where. Like many others, I cut the cord 3 years ago when I was paying $100/month for just basic cable with mostly useless channels or content that didn’t interest me. Now my total cost is under $50/month for a family of 4 for streaming subscriptions.
I did the same about 18 months ago. I found shows were just piling up on my TiVo and I hardly ever watched them. I miss access to live TV now and then but I rarely want to watch sports and it's just not worth it to me to pay for that access. Of course, I could always add a live streaming service if I change my mind at some point--and I'd still probably be paying less than I did for cable TV.
So the year over year CPI increase each month this year (starting from January) was 7.5%, 7.9%, 8.5%, 8.3%, 8.6%, 9.1%, 8.5%. So this value has been jumping around a bit as it has been going up. This drop is being taken as good news -- but I worry whether this is really a meaningful drop or whether we are just over interpreting what could be a fundamentally noisy metric?
Nope, last number is well within the limits set by the variation of the previous numbers. Depending on how sensitive you feel like being to false alarms, I wouldn't even say there's been a clear trend this year.
I'm not familiar with this, does this method require that each value is measured independently of the others? Because in that case, you'd want to use monthly inflation rates, rather than monthly estimates of inflation relative to 12 months prior, right?
Ideally, yes. I read too quickly and assumed that these were annualised monthly measurements.
However -- the technique might work anyway: the signal would be smaller, but so should the variation. Yes, one decreases as the square root and the other does not, but over just 12 months that might not make a big difference.
Only backtesting or a more thorough theoretical investigation can tell!
Edit: actually it doesn't have to be very thorough at all, it's a factor of 3. Probably important!
I assure you Deming knew what he was doing, and my statistics knowledge is not limited to cargo culting the more popular SPC tools. However, they are useful for teaching the general public about accounting for the internal variation of data from the same population.
That said, as I've admitted in a more constructive parent comment, this tool was misapplied here due to my misreading of the GGP.
Corn seems to be a good leading indicator here[1]. Cash bids were $4 in 2019, $5 in 2020, $6 in 2021, $7 at the start of 2022, $9 when the war in Ukraine broke out, down to $8 in June, and now at $7.50 where it has remained stable at since the beginning of July. Which suggests that things are indeed slowing.
[1] Which likely ends up being a proxy for oil, but as a farmer I watch food commodities much more closely.
The issue has to do with the harvest coming up. The next harvest will come from fields with less fertilizer and higher fuel prices. We can expect corn prices in the fall jumping significantly.
Next year will even be worse, we are using a fuel reserves now and fertilizer will still be an issue (unless peace is made with Russia). I’m expecting a significant increase in the next 2-3 months then again in 15-16 months.
Your concern is not reflected in the market. 2023 crop is down similarly over the same timeframe, with cash bids at only $6.80 presently. Your scenario is not unrealistic, to be sure, but current behaviour is not acting in accordance with it and inflation only tracks actual, measured, behaviour, not what could have been.
Certainly, it is possible for inflation to slow and then ramp up again. It is not a static value by any stretch. But it remains that current indicators suggest that it is slowing. Not only in the actual inflation metrics but other also in other indicators.
Agreed on our farm the cost of fertilizer and fuel doubled since the last purchase. The current price is good for us considering we bought before the hike, but next year is going to be another story entirely. I expect the price of grains to continue climbing until local production begins in maybe 2-3 years.
Per the discussion, it only ends once sanctions are lifted, and that requires a willingness from "us" to make peace with Russia. If there is feelings of spitefulness for what they did the sanctions could continue even after Russia pulls out.
> and that requires a willingness from "us" to make peace with Russia
This is false. It requires a willingness from Russia to stop invading Ukraine. What you're writing here is appeasement, and it it's a very bad idea both generally and specifically with regards to global economic stability.
Yes, Russia can attempt appeasement by leaving Ukraine, but we have to accept that gesture for peace to be made. There is no reason why we have to lift sanctions just because they tried to appease us. We probably would for a number of reasons, but we don't have to make peace if we don't want to.
No, Russia would have to appease the West to see sanctions lifted. If the sanctions were lifted first to please Russia, what motivation would Russia have to leave Ukraine?
What is your opinion on whether or not Russia is justified in its invasion of Ukraine?
Because nobody here is talking about lifting the sanctions to please Russia, Russia would have to stop invading Ukraine, which is explicitly not "Appeasement"[0] considering they're the aggressor and the ones creating the conflict.
The only way you could see Russia as not the aggressor here is if you think Russia is justified in its invasion of Ukraine...
> Because nobody here is talking about lifting the sanctions to please Russia
Right, as the ball is in Russia's court to appease the West to see them lifted, and so what political, material, or territorial concessions are being made by the West to avoid conflict? In reality, Russia is the one who must concede on Ukrainian territory for sanctions to be lifted.
> The only way you could see Russia as not the aggressor here is if you think Russia is justified in its invasion of Ukraine...
This is a logical fallacy. One's feelings towards the matter have absolutely no relevance to the topic at hand.
Not really my area of expertise. Any opinions I have would be pure tribalism, which is rather meaningless, and completely off-topic. I came into a discussion about the use of language, not geopolitical relations. What was wrong with the original subject that you feel the need to change it?
I think their definition of "Apeasement" they linked above can specifically only be used when talking about an "aggressive power" (cf. wikipedia)
Thus, to solve the problem of what would be "apeasement", you need to resolve the question or which of the parties involved (Russia, Ukraine, "the West", the US, etc.) should be considered "aggressive".
And that's why this question, which i think is an attempt to understand who the aggressive party/parties are in your opinion, is not a change of subject
> which i think is an attempt to understand who the aggressive party/parties are in your opinion
Appeasement is defined as policy that avoids conflict. The conflict in Ukraine hasn't been avoided and remains ongoing, so Russia does not fit no matter how you slice it. Nor does the West, to be fair. Conflict hasn't been avoided full stop.
If, for argument's sake, conflict has been avoided, it is important to understand what concessions have been made to Russia, if Russia is the aggressor. It matters not who the aggressor is if nobody is performing appeasement in the first place. I am not aware of the West providing any concessions to keep Russia happy as it pertains to this. Instead, sanctions has been imposed against their wishes.
Russia pulling out and conceding Ukrainian territory back to Ukraine to keep the West happy is how sanctions will be lifted. The West is not the aggressor in the war, but could be considered an aggressor when it comes to sanctions. They were very much intended to be putative. If appeasement is relevant (which is debatable), that is where it fits given the subject of what it will take to see sanctions lifted.
One's feelings about whether or not Russia is justified is irrelevant and a change in subject. Furthermore, use of language needs to be introspective of broad interpretation, so even if personal opinion would serve to skew in some fashion, it does not hold relevant to understanding language use in a community.
> Appeasement is defined as policy that avoids conflict.
You're simply using a different definition from them
> Furthermore, use of language needs to be introspective of broad interpretation, so even if personal opinion would serve to skew in some fashion, it does not hold relevant to understanding language use in a community.
As a matter of fact, languages I know (including English) are not built like that.
The closest "language" i know from this property is mathematics.
What is it that you thought? Your comment is unclear. That you, deep down, knew your appeal to emotion would fail? Being from the West, my uneducated, tribalist-driven opinion says that Russia is not justified. But, again, not my area of expertise and not a subject I have much interest in. I do, however, enjoy the subject of language which is why I am participating in this conversation about the use of language. Let's stick with that.
Bringing this back to the topic at hand, how do you see the West appeasing Russia leading to sanctions being lifted?
I don't care about Ukraine nor who started it. It's none of our business. What I do care about is the supply chain going back to normal. Let's make peace with Russia.
Natural gas is needed to make most highly efficient fertilizer and natural gas has just about doubled from prior to the war - this will increase the cost of food down the line, unless natural gas starts flowing freely from Russia again.
Your post violates HN posting guidelines. We can have a better conversation if you engage with people's points rather than speculate about why they said them.
Pretty sure we’re just supposed to flag stuff; not comment on breaking guidelines.
I appreciate the comment though :)
I often stay comments that unintentionally trigger particular personalities. That said, HN generally tends to be one of the more open areas on the internet to discuss facts and opinions.
Plastic is showing similar trends. $0.45 prior to Covid, peaked at $1.35/lb, and is now back down to 0.75-0.80/lb. This drives a lot of consumer inflation because of packaging.
International freight, also. Ningbo-LA ran from $3,500 pre-Covid up to $22k last August/September, now down to around $9k.
Overall, still up a lot compared to 2019, but substantial drops in many commodities compared to peak.
Be careful using the YoY number, you need to factor in the base effect. (i.e. the change in YoY number each month factors in the new month of data but also the month 13 months ago that is no longer included)
MoM is a cleaner way to look at things in volatile times like these.
I realized when monitoring COVID data that rolling numbers like this can be heavily impacted by the number that’s rolling off.
Take, for example, a 7-day COVID case count of 100. The next day this drops to 90. That’s great, right?
Well, if yesterday’s 7-day values were all 100, and today’s are 100, 100, 100, 100, 100, 100, 30, then yes, that’s great!
But if yesterday’s 7-day values were 700, 0, 0, 0, 0, 0, 0, and today’s are 0, 0, 0, 0, 0, 0, 630, then that’s potentially very bad (depending on other context).
This is obviously a hyperbole, but it shows that looking at and comparing rolling numbers can be tricky, and you need to look at other context to get the full picture.
It's not a drop though .. If you read, it's saying the gasoline index (alone) dropped nearly 8% which resulted in a net-null even though ALL of the other indexes continued to inflate...
This isn't great.. And on top of it look at the number 1 comment here.. People are making concerted efforts to reign-in spending .. Which is excellent financial discipline.. but it's potentially very dangerous for this type of economy if everyone stops spending into this 'easing'
Is it really a noisy metric? I think not. It's just that this year has been very tumultuous from a supply side. I would wager these are fairly precise measurements of real effects (ignoring the basket of goods issue). I'm not an expert.
Almost by definition any "year over year" metric that is taken monthly will be at least somewhat noisy.
And if you think about it, reducing "inflation" to a single number will always disguise some things - gas prices adjust multiple times a day if necessary but things like leases only get renegotiated once a year or even longer.
Not for heating oil, since most installations that use gas for heating do not gace the capacity to switch to oil. And those who have the capacity to switch their heating system would choose a heat pump over oil (better yield).
But oil (&coal) may be bought to generate electricity (to replace gas, not for heating but for electricity production. Some European countries such as Germany are heavily reliant on gas for electricity production), and that may still drive petrol up
I suspect most houses don't have the capability to switch between different modes of heating: if you have a gas furnace, you're not going to be burning heating oil in it instead.
I believe the plan in case of shortage is to reduce the amount of natural gas flowing to power plants, and to make do with whatever alternatives for electricity are readily available (which is probably coal, although maybe nuclear decommissioning will be staved off).
I'm not 100% sure they did this but with the SPR you can actually smooth out the price curve for oil.
Much of this period, the spot price of oil was high, but oil for delivery 6-12 months out was much less expensive. The SPR could sell into the spot market but buy oil for delivery 6-12 months out. This actually could mean a much more sustained drop.
We won't know if it's noise or not until several months in the future when we can see a clear trend line. So come back here in a year and we can tell you whether it was noise. Any answers you see today are just educated guesses.
I suspect a noticeable part of the drop was a decrease in ocean freight rates. Down about 30% from peak, but still about 3 times higher than 2 years ago. I'd expect them to drop by another 30-50% over the next year, that should help a bit.
Since the baseline fear level was "inflation will keep going up and the Fed will keep raising rates, sending us deeper into a recession in the process", this seems extremely encouraging. If inflation has peaked and is starting to fall, we will get out of this much less painfully than prior recessions.
I tend to think the NBER definition is a good one: "a significant decline in economic activity that is spread across the economy and that lasts more than a few months"[0]. It is not at all clear that we are already there. The reason employment matters is that it is difficult for businesses to hire if there is a widespread and durable decline in economic activity.
This entire line of argument over whether we are in a technical recession is pointless and dumb. We are in a uniquely weird economic situation that is clearly bad but less bad than a typical recession, and it would be improved if inflation fell.
> For most people growth means that the economy is getting better and recession means that the economy is getting worse.
That's a fine shorthand, but the reason the standard data and interpretation of it matters is that otherwise all you have is what people feel about the economy, which is not very useful information.
Seems like EV uptake rate, while still just a fraction of total sales, is probably high enough to contribute to demand destruction. Gas prices have come down pretty fast. I wonder if EV adoption goes fast enough that we'll see a period of time when gas prices just crater for a while. A sweet spot of owning an ICE vehicle, but then gas stations will start to close up and ICEV owners could face the same problem EV owners face now but without the easy ability to refuel at their house.
I agree, it will take some time for EVs to really take off. And the dynamics are difficult to predict. If even 5% of cars become electric, it will really move the needle on the retail gas pricing, which might slow EV adoption, etc. I expect it might go in waves. Although EVs have such a dramatic running cost advantage that as capital costs and range anxieties are addressed, the adoption rate will probably be supply limited for years.
EV growth of the last few years was nothing compared to the increase size of the average car (more SUV and pickup sales in proportion, compared to standard “cars”).
So really the EV market is still insignificant and gaz consumption for the average household has gone up, not down.
>gaz consumption for the average household has gone up, not down.
Historical data shows that overall gas consumption is more strongly linked to the frequency of highway travel than to recent changes in car purchases. See:
There's a drop during the Great Recession, a rapid rise during the recovery, and a roughly flat line during the Trump administration until another crater during the COVID pandemic.
When ppl talk about EVs overtaking petrol all I can do is shake head.
Infrastructure is not there and is not going to be there for EVs for a long time.
Its not only gas stations but also power plants, transit cables, personel, supply chains, technology, laws and other.
If we make good investments it will take around 50 years in some developed EU countries to reach appropriate infrastructure levels. In less developed countries probably 100+years.
Oh, not this again. If you have a standard household outlet accessible where you park, you probably don’t need charging stations outside of road trips, because you’ll be getting 60+ miles of charge overnight. The load at a given time is like a third that of a central air conditioner. I think we can handle it.
Moving all private cars to electricity will increase total electricity consumption by 19% (https://phys.org/news/2015-07-cars-electric.html). This number is not something worrying in any way, and well manageable by the current incremental improvement of the electricity grid.
And the charging is primarily done during the night, where the grid (typically) is less strained. The biggest issue is that it currently doesn't align very well with things like solar.
In my buildings parking garage there are 150 cars, where probably a good 30-40% of cars are BEVs. We're pulling a maximum of 32kW, or 400V/80A. I have yet to find my car not fully charged in the morning. It's a load balanced system, so usually I get full effect of 11kW when charging.
I think you all can figure it out, it’s not a huge percentage increase vs people’s normal usage, and there’s plenty of time to incrementally improve - battery production is currently a pretty hard bottleneck on the production rate.
Excellent point, although I haven't seen this actually be done in practice either at grid scale or household scale. Do current EV's charging electronics support this use case?
Yep, it’s not going to work for everyone immediately. But it will for the majority, and over time, it will for everyone. As they become more common, the culture will shift and make this resistance seem more and more obviously ridiculous.
How long does grocery shopping take you? I can do it in under 30 minutes, definitely under an hour. And in that half hour, my car charges… about three miles (@ 3.6kW)? That’s about how far the trip to the grocery store is. 50A 240V (10.8kW) only gets me up to 7.5 miles of charge in a grocery shopping trip.
Thats... extremely pessimistic. I have a VW eGolf, with our 7.6kW home charger it can go from empty - full in 4 hours. It has a 36kWhr battery w/ a range of 150 miles, so in 30 minutes that's on average a little under 19 miles (probably more because you get faster charging at first and slower when closer to full).
But more to the point, how many people have a regular commute, only have street parking at home, and ALSO couldn't be expected to have their employer provide charging at work? Are they doing on-street parking at work as well?
I know a lot of folks in the city who own a car but use it for errands and trips but not commuting. They're the people best served by slower charging at grocery stores, movie theaters, etc. 20 miles isn't a lot but if you're topping up every-time you use the car anyways it adds up or at the least means you only need to use the fast charger once every few months at the most.
So in California I can just dig up the HOA's land without permission to run a wire to my parking space? Or if my HOA has a parking garage I can just start drilling through the walls of the HOA's building to stick a charger in, no permission needed? Surely this can't be how it actually works in CA? I'd like to see a lawyer's take on whether this is an "easy legislative fix."
All the things you mentioned would violate the electric code in most areas. What you can do is ask for permission for a charger to be installed by an electrician. They can't deny this legally.
>Speaker of the House Sam Rayburn was a major proponent of the REA, which he helped pass in 1936 as Chairman of the House Interstate and Foreign Commerce Committee. Rayburn stated in 1959 that ninety percent of farm homes in the U.S. were electrified, compared to three percent in the early 1930s.
Furthermore, electrifying gas stations along major highways will obviously be much easier than electrifying farms scattered around everywhere.
>How many charging points do we need now vs # those farms ?
There are ~150,000 gas stations in the United States. There are 2 million farms, and that's after significant consolidation of agriculture during the Green Revolution.
>You make it sound simple, but its not.
You are simply posting 'questions' without bothering to do the least bit of research. Looking up those numbers took less than a minute. Climate change discussions benefit from informed skepticism, not intransigent fatalism.
We need around 50 million household charges, around 15 million parking spot charges and 150k gas stations.
For me thats “a lot more” than 2 mil farms.
Its realism. Consider a situation when 50 cars have to park at the station to charge back to full. The station is out of service for the next 10h…
This is a pretty common situation on highway.
We would need hundreds of those charging spots often with hotels.
Im more excited for Hydrogen cars than EVs. Its a lot cleaner and future proof solution.
If you want to replace gas stations with EV charging stations that 'full-up' your car in less than 5 minutes, you're right.
But if every parking space just gets 1KW of solar panel ~$500 and sun shines for 10 hours a day, you probably have enough power for the 30 miles of daily commute. A car sits idle for 90% of the day. We can use this time to charge it.
It's not the long road trip use case but I think will put a big dent in the resources needed to migrate to EV.
I’m not gonna spend 10 hours in an office and definitely not from sunrise to sunset. Also, 10 hours of sunshine in a day is a rarity in most of the US, especially during the winter.
Every parking space will have a 1KW charging panel so anytime you're not using your car it will charge. No need to stay at the office. Go about your day and every time you park your car it'll recharge.
I'm not saying EVs are going to overtake ICEV anytime in the next few years. But a 10% reduction in demand for gasoline would be huge.
Not sure I'm feeling as pessimistic on infrastructure. A bunch of the infrastructure for EVs already exists and is wired to every house. Even if we converted 100% of all newly sold vehicles to EV today, the grid build-out required wouldn't be any harder than what we've done in the past.
I agree and I see a lot of people concocting additional premises to make this seem like humanity's largest challenge. I would suspect many people are starting from where I am mentally on this topic. In my household we want to move to one gas/diesel vehicle, and one electric. If everyone did that it would be a significant shift in just about any related metric.
You could leave everyone in rentals with gas vehicles, and if you have every single two car household with just one EV that's a massive change from today.
No reason to go further than that at this point in time. Even if we do go beyond to create a doomsday scenario for EVs, it will be worked out because few of these things are unanswerable open questions. If this were hinging on some technological homerun like figuring out fission or the Alcubierre drive then I would feel differently about it.
(1) HOME CHARGING. In sparser areas where people live in houses with garages, duplexes, and even to some degree rowhouses, it's easy to run an extension cord and get a full charge nightly.
(2) STORE PARKING LOT CHARGING. In denser places where people live predominantly in apartment buildings and perhaps some rowhouses, there is enough density to have rapid chargers in store parking lots. You drive to the grocery store, park for half an hour while you shop, and you have enough charge for the rest of the week. There is also enough density that daily milage is much less so you can get away with charging once or twice a week instead of daily.
(3) OTHER TRANSPORT CHOICES REDUCE RANGE ANXIETY. Also at least in the USA TONS of households have multiple cars -- especially in sparser areas that are more car dependent and have plentiful parking. This creates an easy in for the plugin EV -- if one of your (typically two) cars is still ICE or hybrid, you don't have to worry about range anyway (while still putting most miles on the EV). Conversely, in denser areas (USA or EU) it is common to own zero cars or one car that isn't even used every day because public transit covers some of the transport needs. In either case, range anxiety becomes not much of a problem because the EV isn't your sole option for getting around (but, at 250mi range, range anxiety is kind of obsolete anyway)
So once again, whether you're in a sparse or dense area, there are dynamics that make it easy for many people to get started with an EV. Does it work for 100% of people, today? No. But that's how change works. Once a lot more people, starting with those who can easily do so, get EVs, it becomes more normalized, and there's more infrastructure, and the cycle continues.
Good plugin EVs like the Bolt or Leaf with 200+ mi of range are now in the $20-$29k range. It's starting to become pretty practical. They're not competitive with getting the cheapest camry shitbox you can find on craigslist and running it into the ground, but they're competitive with a lot of ordinary cars ordinary people buy.
Your numbers are way off. The MSRP for the cheapest Nissan Leaf with 200+ mi of range is $36K (plus sales tax and registration fees, so total cost out the door is significantly higher). And that's if you can even find one; most dealers are out of stock, or are gouging customers with additional mark-ups. Federal EV tax credits can bring the net price down for some customers but that depends on their individual income tax situation.
The Bolt is about $26k. I looked it up last night while fantasizing about car purchases. I guess the Leaf is more expensive now, oops? Not sure why my point wouldn't still stand?
The new car shortages are real but I don't see how they speak to long term EV viability which is what was being discussed. ICE cars are just as affected, and it's bound to get better eventually.
EDIT: It appears you have lied. The price you quote is for the fancier model of Leaf, but the base model is available for $27,800 according to Nissan's own website. I got here by searching "nissan leaf" on google. Not sure why you didn't do this. https://www.nissanusa.com/vehicles/electric-cars/leaf.html
Prices were already going up before July 2021, so this is not necessarily that positive (the amount of price increase is relative to an already heightened baseline).
And remember that year-over-year metrics depend on the baseline of the previous year. The first half of 2021 was still artificially low for economic activity with pandemic-suppressed demand for many things.
At least some of the 2022 numbers are only an artifact of being compared to that low baseline. And the apparent drop in the second half of 2022 is an artifact of comparing to the second half of 2021 when demand got mostly back to normal.
Idealogical capture has invaded the expert class.
Getting straight answers without spin is basically impossible now.
You have to start tracking things yourself to see real world effects.
I highly recommend just looking at energy since it's an input cost into nearly everything
"In the fall of 1972, President Nixon announced that the rate of increase of inflation was decreasing. This was the first time a sitting president used the third derivative to advance his case for reelection."
It would be the 3rd derivative. Inflation is the first (rate of change of prices). The increase of Inflation is the second (rate of change of inflation).
Therefore the decrease of the increase of inflation is the third
Yes, because inflation is already the first derivative of cost.
So the 'rate of increase' of inflation is the second derivative. And to say that the second derivative is decreasing is another way of saying the third derivative is negative
Third I think. First is the inflation rate itself (some positive number around 8%), second is how that rate is changing (some positive number meaning we expect the inflation rate itself to increase next interval) third is how that change itself is trending (negative I think? meaning that we'd expect the still overall positive increase to the base inflation rate to be somewhat less than it was in the previous interval).
Take that with a grain of salt, I'd welcome any corrections if some one sees fit.
Is it believed Nixon understood the literal meaning of his words? He was very clever, but did that extend to quantitative domains?
The suggestion seems to be "yes", and that he was playing a game of telling a literal truth that was not however the good news 99.9% of the electorate would take it to be.
Good news I guess. But my electricity price literally doubled. My house insurance is up 30%. My gas bill is up by a lot. Have you seen the price of oreos? The $5 box at Taco Bell is my splurge and I'm trying to cut back on everything I can.
The inflation on food due to high fuel and fertilizer prices won’t really kick in until October -> February during harvest.
Next year food will be far higher, largely due to
- people skipping fertilizer a second year in a row
- the feed price increases from year prior will impact next years meat
- much of the cow herds have been reduced due to hay prices skyrocketing (but beef rates staying far lower, due to sell offs)
- if Ukraine doesn’t surrender, we can expect less food production and potential oil disruption to center Europe
- Russia is not likely to renew trade relationships baring a reparations for seizing assets. They produce much of the fertilizer and oil
- 10% reduction in nitrogen targets for EU countries and Canada will further reduce food production
Yeah, a drop here or there isn’t indicative of a major change in inflation. I don’t see how we can get lower general inflation in the next 3+ years. FED has said as much.
In way of an explanation, hay prices have tripled. It’s expected they’ll at least double again tin the next 12 months. That’s one of the feed for cattle. That’s a 6x expected increase to feed cattle (the largest expense). To put it in perspective, that’s likely going to mean $12-20/lb ground beef; $25-$30/lb steak in 18 months.
>- if Ukraine doesn’t surrender, we can expect less food production and potential oil disruption to center Europe
If Russia doesn't surrender. Don't put the responsibility of global food prices on the people being repressed and killed in their own homes. Do it on the aggressors and war criminals.
I’m stating what I see as facts. Russia will not surrender. The longer the Ukraine is in the war, the higher likelihood the people of Ukraine starve.
We can make an argument that they shouldn’t surrender. That’s a moral position.
I’m pointing out if we don’t figure it out within the next few months you’re not going to get the food from the region, as people are fighting over it. I don’t care who’s fault it is. We should recognize the situation so we can try to mitigate the issue.
What the OP is saying is you could have phrased your comment like you did in your last paragraph here.
Nobody disagrees that until it ends the situation will create further instability; but it can end with Russia giving up or surrendering as well. There is no global objective truth that Russia will not surrender; so by saying "I'm just stating facts" you're actually making a normative claim instead of a descriptive one; which can be viewed as problematic.
If the war in Ukraine continues, we can expect less food production and potential oil disruption to center Europe.
No need to comment on how to get to this outcome, or thoughts about who will make a concession leading to a big conversation away from the main point of what you were trying to say.
Keep the if statement about exactly matters, not a secondary effect/cause.
I dont see any way Ukraine can win. There’s a lot of real information out there (military reports). I’m not going to dive into that and debate it. There are also many channels covering this topic mostly neutral:
In short, for Russia to lose would be the end of Russia. They have to be seen as hitting their objectives (they’ve hit a few so far). Ukraine is massively out gunned, but has more manpower active. That said, I don’t see an outcome where Ukraine can regain any territory and will likely only lose more. That will further embolden Russia and will keep them from surrendering at the very least.
You are right there are lots of real information out there.
You have picked a 1. random unpopular youtube channel (which might be good, I couldn't verify anything from it, as I couldn't find who ran it, if you know I am happy to be proved wrong) and 2. A disbarred barrister https://twitter.com/markgaleotti/status/927087181532991489?l.... There is much better information to pick than this! Any information will have a bias, and if they claim to be neutral I personally get suspicious of what that bias is.
Your assertion that you can't see anyway for Ukraine to win is based on "If Russia loses, it would be the end of Russia". Well, if Ukraine loses it will be the end of Ukraine, so I guess by your logic Russia can't win either? (TBF, everyone losing to some degree is right with war).
I won't get drawn into a discussion about how the war will go. People qualified to make a guess have been wrong and wont make prediction. Neither of us is qualified, so I will not be weighing in on this except to say that unexpected things happen all the time in conflict.
If you want a take from the former general in charge of US forces in Europe rather than randos and disbarred barristers, this stuff is more optimistic:
There was also an interesting take on the business before the war even started by Mikhail Khodarenok - ex-head ... of the Main Operational Directorate of the General Staff of the RF Armed Forces, Colonel https://nvo.ng.ru/realty/2022-02-03/3_1175_donbass.html In Russian but Google translate works well. It points out a lot of difficulties that seem to have come to pass including:
>It is also worth recalling that the mighty Stalinist NKVD and the multi-million Soviet army fought the nationalist underground in Western Ukraine for more than 10 years. And now there is an option that the whole of Ukraine can easily go into the partisans. In addition, these formations can easily begin to operate already on the territory of Russia.
which seems to be playing out just now with stuff blowing up in Crimea and Belarus.
> Your assertion that you can't see anyway for Ukraine to win is based on "If Russia loses, it would be the end of Russia". Well, if Ukraine loses it will be the end of Ukraine, so I guess by your logic Russia can't win either? (TBF, everyone losing to some degree is right with war).
One big difference here is that Russia has nuclear weapons and Ukraine does not.
Nuclear weapons are too taboo to use for anything other than existential crises. Losing the war would be incredibly destabilizing, but as long as Ukraine doesn't suddenly start advancing to Moscow, they won't be used.
Argumentation via hyperbole. The US lost in Vietnam and Afghanistan, so what.
There's zero indication that nuclear weapons are relevant.
80,000 casualties in 140 days is shocking and unsustainable for Russia.
If western accounts are correct, western military support is increasing the weapons imbalance, leading to greater Russian losses and fewer Ukrainian losses.
Finally, I'll point out that pundits have been calling doom for Ukraine from the start, and have all been wrong. So, the onus is on you at this point to "dive in and debate."
Or don't, and accept your downvotes lol. It's just social media.
Ukraine can't win in the sense of achieving an outright battlefield victory and ejecting the Russian invaders. But NATO and the EU can keep Ukraine from losing by continuing to support them, and maintaining sanctions on Russia. This will bog down the bulk of Russia's expeditionary military capacity in a quagmire, just like with Afghanistan in the 1980's.
Unfortunately this will have some bad effects for the rest of the world in terms of food supplies, but it's a price worth paying to eliminate Russia as an effective geopolitical player for years to come. Remember that it's not just about Ukraine. If the rest of the civilized world pressures Ukraine into ceding territory to Russia as part of a peace settlement then next year Russia will try to take a little slice of Poland, a little slice of Estonia, etc.
Yes! Putin didn't start the war because everything is peachy in Russia.
It was a controversial measure to buy time, but it worked in 2014 with Crimea. Nothing has changed in Russia since then, so there's no reason to think it will stop with Ukraine. Even Putin himself says he wants more.
It's not such a far-fetched idea. Russia (the empire) has been falling apart since 1991 (possibly even 1917, but that's a scale that doesn't matter much for the outcome of this war).
> I believe -- and this is a personal belief here at MFAN [the channel name] -- that the United States is actively flying both F-22s and F-35s -- stealth aircraft -- over the combat area. And now, are they dropping ordnance on Russian targets? Difficult to say
I don't understand what kind of bubble people are in if they think Russia is about to surrender soon.
According to the Western media they were running out of ammo in March, April, May and June. Meanwhile, with an incompetent army running out of supplies, they were apparently able to occupy 20% of Ukraine's territory.
To be clear. I agree with you, I doubt Russia will surrender any time soon.
The conclusion as far as food goes is that globally, plans should be made that do not count on any food from Ukraine, or Russia entering global markets.
I just took umbrage that OP was seemingly (and probably unintentionally) putting the blame for the situation on Ukraine and not Russia.
My interpretation is that he phrased it like that because he sees Ukraine surrendering as the most likely scenario. Not to put blame or responsibility on Ukraine.
"...it is a risky business for a senior politician to put on public record an estimate of future events which, if wide of the mark, would provide ammunition to his adversaries. Similarly, a President who announces specific policy goals affords the public a measure of his failure if he falls short of his hopes. Hence it is common practice for officials to define foreign policy goals in the broad generalities of peace, prosperity, cooperation, and good will—unimpeachable as ideals but of little use in determining the specific objective we are likely to pursue and the time, place, and intensity of our efforts"
the problem you're alluding to isn't new: political leaders aren't likely to make the clear statement of aims you want them to make (see the quote). You should consider the fact that they might not make a clear statement, but 100% could still could be the goal.
My view is that the original ground scheme of maneuver (a strike at kyiv) points to a goal of replacing the ukrainian government with a russian puppet government, essentially a "100%" or unlimited war aim.
Putin's speech on February 24th, the day of the invasion
> "To this end, we will seek to demilitarise and denazify Ukraine, as well as bring to trial those who perpetrated numerous bloody crimes against civilians, including against citizens of the Russian Federation."
How do you demilitarize a nation by taking only 20% of it? The only way to do this would be to capture the entirety of the country.
I was talking about official statements defining the goal as occupying 100% of Ukraine's. Taking an ambiguous word in a propaganda speech doesn't cut it.
> How do you demilitarize a nation by taking only 20% of it? The only way to do this would be to capture the entirety of the country.
Really? What if Ukraine surrenders and negotiates sovereignty over the remaining 80% of their territory while dismantling (or at least greatly reducing) the capabilities of their armed forces?
That's just one of the possibilities that comes to mind which does not involve occupying the entire territory.
The idea that Ukraine would reduce the capabilities of their armed forces after 8 years of war with Russia in the separatists and constant training with NATO is nonsensical. They wouldn't have spent 8 years preparing for this war if they would just throw it all away. Clearly those years training weren't wasted because Russia has barely made any gains in the past month. Everyone was speculating the whole government would collapse in 24 to 48 hours. Now, 5 months in, and they've lost up to 80,000 soldiers for 20% of Ukraine.
We're going a bit off-topic now, but I mostly agree with you if the situation remains stalled like it is now.
On the other hand, if Russia is able to make significant advances in the coming months, and Ukraine is at a point where it cannot meaningfully defend anymore, it seems the rational choice would be to negotiate and accept a reduction in their armed forces (while maybe retaining what territories they still have under control) instead of falling for the sunken cost fallacy and trying to defend a lost position just to avoid "wasting" 8 years of NATO training.
A reduction in armed forces will not happen because all it does is weaken you for the next invasion. Russia will not be content with just the eastern parts of Ukraine. They need to take the entirety of it, or else the war would be pointless. A reduction in armed forces will never be on the table because it just guarantees a war you will lose.
In the real world, we all know Russia isn't going to surrender, and Ukraine is going to lose. That's why western leaders are putting distance between them and ukraine
Western leaders have stopped visiting because they just did a few months ago, they don't need some official state visit merry-go-round to show support.
Also we do not "all know Ukraine is going to lose". In the real world, this is looking like a complete embarrassment for the Russian military. Hell we all knew the Taliban lost in Afghanistan in 2002 as well, and this is going much much better for Ukraine than it was for them.
The most likely outcome is that neither side surrenders or loses. Instead the conflict will just grind on indefinitely as a slow war of attrition. While some western leaders are distancing themselves from Ukraine, others will continue to support Ukraine as a way to bleed Russia to death and discourage future invasions of other countries.
Putin won't live forever. So the goal is just containment until he's replaced by someone less aggressive.
> - if Ukraine doesn’t surrender, we can expect less food production
I doubt that Russia would prioritize food production if they win the war, considering the huge list of "enemies" they've added to their list.
Most likely, they send food production to allies and they'll attack the next neighboring country in a few years by keeping exports (Gas/food) towards "enemies" at a minimum.
Wheat and other grains are somewhat fungible on the world commodity market. If Russia sells more grain to select allies then there will be more available to other buyers from different sources. Transportation complicates things a little, but generally that's how it works.
I'm not trying to be glib or intentionally controversial, but: is this a "market correction" for beef not really being as sustainable at recent consumption levels? Is it a bad thing if beef becomes significantly more expensive?
My father has worked in the meat industry his entire life and said that over the decades, he was shocked how unnaturally cheap meat has become.
I'm in no way anti-meat, but a lot of people have normalized eating a huge amount of meat per day at ultra low cost, and internalized this as some basic right. Natural consumption of meat is to eat meat sporadically, not 3 times per day.
I'm not questioning whether one likes meat, I do too. I'm saying you don't need it in these amounts nor should you expect it to be this cheap forever.
> Natural consumption of meat is to eat meat sporadically, not 3 times per day.
This is just an appeal to the way things were 70 years ago in the US. Much further back you had Native Americans absolutely eating tons of bison meat in the western US. Other tribes easily got fish for every meal. Others have been heavily vegetarian.
Natural and cultural are not the same thing. Culture is made up, nature is not.
Overconsumption of meat can lead to bodily issues as does a lack of particular plant foods. Particular meats are processed/digested in different ways, and have different pros and cons on what it does to your body and health.
So there very much is a "natural" way to consume meat that is most compatible with the capabilities and constraints of our body.
What is recommended/natural is an entirely different concept from what people actually do, which was entirely my point.
I'm imagining a farm household hundreds of years ago, growing their own crops and having a herd of 4 cows, killing one or two a year for lots and lots of meat.
Google says hunter-gatherers got most of their food from meat.
And are crops not unnaturally cheap with modern mechanized farms?
I'd say a good definition for a "natural amount" is the average amount you get in a hunter-gatherer setting. That's what most of our evolution has prepared us for.
Not judging on the value of thaat diet though. "Natural" doesn't necessarily mean "good"
Production of beef is at sustainable levels, provided cheap energy.
But increase fertilizer 3-10x and fuel 3-5x and you’re going to adjust in prices. And you’re going to get a new sustainable level.
Btw when I say “sustainable” I mean market conditions, not environment. The environment can likely handle far more cattle, but it requires input (fuel, fertilizer, etc) for us to produce said cattle.
Recall, there used to be millions (probably tens of millions) of bison roaming the Americas. We basically replaced them with cattle. Cattle are constrained to a region and fed food from farms. Environmental wise, I don’t see much issue with cattle (when comparing to other pollutants)
The difference between the bison and beef cows is that the bison lived longer lives than the beef cows today. Growing new animals vs. maintaining a population has significantly different energy requirements.
Insects are being promoted as a way to hit UN’s sustainable development goals [1]
There’s also an industry emerging, with big pushes from organizations like WEF, to normalize eating bugs [2]. Investors are getting in on this trend too [3]
Yea insects typically have a high amount of allergens to humans.
It's why bioreactors for things like insulin, igb, etc avoid insects cells if they can.
Are you kidding?
Insect cells used in bioreactors would be an order of magnitude safer than possible insect food ( medical grade is much much higher standard than food grade), and people still avoid it as much as possible .
That should tell you "food grade" insects have enormous risk associated with them.
Well if I look at peanuts again, an order of magnitude safer would still be something to avoid very strongly in bioreactors.
At this point I'll keep an eye out but insects are such a broad and mostly unexplored category that I'm not convinced there's an unavoidable and crippling allergen risk.
in what world will people eat bugs instead of beef, do bugs taste anywhere as good as beef? all the push from the supply side doesn't fix the demand problem.
"Eat the bugs", "Woke", "Socialist" can all be used in a positive way it's just that they are also often used by the US right wing in a negative way. You'll understand that when Alex Jones is calling a democrat "woke" he is using it in implying being woke is a bad thing. "Eat the bugs" is similar and is more common in the anti globalist conspiracist circles.
> The researchers studied ten other comparable food lists from southern England and discovered a remarkably similar pattern: a modest amount of bread, a huge amount of meat, a decent but not excessive quantity of ale, and no mention of vegetables (although some probably were served).
Simply put, you have an animal who eats a bunch of veggies. It’s gathering the calories for you. Then when you kill it, you harvest those calories. There are other means of collecting calories (farming grains, milk & honey, etc) but for most of human history (even now) meat was necessary as it contained the calories to survive.
“The scale and proportions of these food lists strongly suggests that they were provisions for occasional grand feasts, and not general food supplies sustaining royal households on a daily basis,” says Lambert. “These were not blueprints for everyday elite diets as historians have assumed.”
“I’ve been to plenty of barbecues where friends have cooked ludicrous amounts of meat so we shouldn’t be too surprised. The guests probably ate the best bits and then leftovers might have been stewed up for later.”
Leggett adds,: “I’ve found no evidence of people eating anything like this much animal protein on a regular basis. If they were, we would find isotopic evidence of excess protein and signs of diseases like gout from the bones. But we’re just not finding that. The isotopic evidence suggests that diets in this period were much more similar across social groups than we’ve been led to believe. We should imagine a wide range of people livening up bread with small quantities of meat and cheese, or eating pottages of leeks and whole grains with a little meat thrown in.”
The researchers believe that even royals would have eaten a cereal-based diet and that these occasional feasts would have been a treat for them too.
Agreed, and a great alternative is chicken. Delicious, very versatile to cook with and an ecological foot print that is 4 times smaller compared to beef.
Not to pull the "facts don't care about feelings" card... but markets don't care about long-term sustainability so long as medium-term growth can be expected. Such a correction for unsustainable markets will eventually come, but not on a timescale relevant to current events.
I don't personally think rising beef prices are an issue, though. Nobody is going to starve because they're being priced out of a steak. I will be more concerned if we eventually begin to run short of beef-alternatives, though.
I was more thinking about how subsidized beef consumption is, at least in America. I was thinking less about sustainability from an environmental standpoint, though I think the environmental cost of beef is one of the things that is hidden by the way we subsidize the industry.
I think you mean if Russia doesn't surrender. If Ukraine was to surrender, we'd have bigger problems than an increase in beef costs. I don't see any universe where Russia wins this war.
"At present, however, several Russian advantages and Ukrainian weaknesses are leading to an attritional conflict that risks a protracted war, eventually favouring Russia."
It will tell you a lot of things, including that Ukraine's losses are far higher than the general public estimates, as Ukraine successfully hid/minimized the awareness of its losses from phase 1 of the war.
I also recommend the War on the Rocks podcast with Michael Kofman, whose assessment of the situation is also not too rosy.
I am extremely pro ukraine. But that's the reality. At the moment Russia is winning and Ukraine is losing, just very slowly.
It seems to me that they are right about the "attritional conflict that risks a protracted war" part, but that the ability to accurately forecast the outcome of such a war is extremely limited. If one side were winning easily and quickly, it would be easy to predict the outcome. With a long tug of war conflict, forecasting is much less useful.
You're right. That's the current situation on the ground, but RUSI certainly can't predict the future, and they do suggest that with increased deliveries of Western weaponry, it's possible Ukraine will succeed.
Problem is that in the current situation Russia surrendering would imply a regime change or at the very least very heavy turmoil within Russia. Since this isn't a regime that will let itself get toppled without trying almost everything, there will likely be an escalation before Russian surrender is actually something that is visible on the horizon, which does not bode well for anyone.
Sucks for it to be this way, but having an autocratic regime with imperial ambitions sit on a huge proportion of the world's commodities means you really pay for not appeasing them.
>Russia is not likely to renew trade relationships baring a reparations for seizing assets
Russia is quite ready to sell on the following conditions:
- Remove sanctions which forbid (or make it difficult) the Russian export in the first place.
- Pay in rubles (i.e. you have to "sterilize" your cache through the Moscow stock exchange) like was done with the gas export to Europe.
- Remove sanctions which forbid export to Russia. It has no interest in selling stuff to the West, if it can not buy the stuff it needs in exchange. We already can see that its export-oriented economy sectors suffer from the strong ruble.
Russia has answered to the frozen reserves by freezing financial assets owned by foreigners. Interestingly enough, both numbers are quite comparable to each other.
Russian foreign reserve assets are liquid, nationalized means of production for goods outside their respective chain of production isn’t and of dubious value (eg car manufacturing).
A Sausage McMuffin and a coke used to cost $2.12 at most locations near me two years ago. Today it varies from $2.95 up to $3.85 (strangely this high value is in Detroit proper where income is lowest vs the burbs).
I notice this price varies even at the same locations sometimes, but it's WAY up in general by a solid 50 percent in 2 years.
That is less about inflation and more about pricing power. An Egg McMuffin is a low-grade foodstuff in one community (probably higher income), but a "treat" or extravagant breakfast in another (probably low income). The Egg McMuffin has far more pricing power in Detroit than it does on Rodeo Drive.
This happens with things like Medium Ground Beef as well. But T-bone steaks can be quite cheap in lower income areas, and massively overpriced in more expensive parts of town.
Everything I care about definitely seems to have gone up a lot more than the nominal inflation rate would suggest. Maybe not 50%, but... certainly more than 20% over the last two years.
Then again that's been true since I started paying attention to this stuff almost 20 years ago. The reported inflation rate's never felt all that close to how much stuff I buy's actually going up in price (the reported rate's consistently a lot lower than that).
HOWEVER, in the specific case of McDonalds, you have to factor in that they've spent the last few years aggressively optimizing for price discrimination. If you're poor, you use the app and physical coupons and never pay menu prices, but something closer to what the prices used to be. If you're not poor you pay menu prices and wonder when fast food stopped being cheap (it didn't, they just make you trade some time and effort to get "normal" prices now)
Yea, the expert class is under idealogical capture
You got fraud in many fields like social science. depression, and Alzheimer's research were the hot fraud of the last couple weeks.
Experts are just spinning things to fit their idealogies.
Regular folks must start evaluating how inflation is personally affecting us and make noise.
Not sure. I know they push tons of deals through the apps. I know this second-hand, including from someone who routinely gets entire meals from Taco Bell, specifically, for a couple dollars—just as you used to be able to do off the normal menu. Sometimes he can get absurd amounts of food for less than a dollar—just as you used to be able to do couponing or deal-hunting. In short, what it looks like to me is the normal prices became "sale" prices, the former sale prices became super-duper-sale prices, and the new menu prices are a totally new massive-profit-margin category that didn't exist before.
This is actually pretty similar to what pizza chains have been doing far longer and to a greater degree than other fast-food joints used to—it's long been the case that you can get 30-50% off your chain pizza order with coupons, and that there are always a bunch of coupons available to suit many common orders, such that there's rarely a reason to order anything at full menu price from a major pizza chain unless you just can't be bothered to track down any of the deals (hence, it's price discrimination, with a side of psychological manipulation to make you think the "deals" are actually bargains when they are, rather, simply not rip-offs).
As for my own experience: we usually do Arby's when we want garbage food. We can easily drop $40 there at menu prices without going nuts—or we can get all of the exact same stuff for $15 or less, with coupons (the key: lots of their coupons list, in small print, a count of times you can apply it in the same visit, so you may be able to use a single coupon for, say, "$3 sandwich + fries" to buy five of those meals at once at the coupon price). Again, these places have long had coupons, but they didn't used to constantly have lots of coupons or other deals active at once, and the difference between coupon and menu prices didn't used to be so extreme. Actually, noticing that Arby's prices had damn near doubled over just a couple years (pre-pandemic) was what prompted me to take notice of this situation, which does appear to be playing out industry-wide.
For my closest McD’s it’s still $1 for a large soft drink at least (I know some franchises have the ability to change the cost of a large nowadays), but it is $2.49 for a sausage McMuffin.
The weirdest thing I've discovered is that the app doesn't show you certain discounts (but you still get them) - there's often a BOGO discount on the sausage McMuffin (the only true McMuffin, all you egg McMuffin eaters can gtfo) where the second is a dollar (or sometimes even free!) but nothing tells you this until you add a second one to the order.
The McDonalds app is the weirdest mish-mash of modern app design with ancient CRM systems I've ever seen. It looks like they finally updated the email receipt - it used to be text-based straight from the 80s.
They just brought the 2 for $5 breakfast sandwich deal back. They've had the "buy one sausage muffin/biscuit or hashbrown and get another for a dollar", though.
I'm big on the fish sandwich and breakfast burrito. I went there the other day to use the free hashbrown coupon. They cancelled it saying they had no hashbrowns in stock. Seems pretty hard to believe that a McDonald's ran out of 5 cent frozen hashbrowns that come in industrial sized bags. I almost readded it paying for it to test the theory.
It will be interesting to see if locations start pulling tricks to avoid honoring the deals in the app.
Soft drinks are a loss leader for fast food, which is why judging McDos on the price of a single item like soda or mcmuffin is a bit oversimplified. Pricing strategy fluctuates (sometimes) independently of supply costs.
Ha ha, no. That's where the money is. They have like 90 percent margins on those syrup/water mixes.
...
I like discussions about inflation though because everyone brings up a particular item from their own budget. For instance, have you priced Little Debbie Zebra Cake Rolls lately? Did you even know they exist? It's like a mixture of a Swiss Roll and a Zebra Cake and they are completely awesome and I'm pretty sure the government is ignoring the 50 percent inflation I've been seeing on them lately. I don't know if this is incompetence or reactionary arrogance ("We'll stick with the hexagonal cakes they serve at Quadrangle Club thank you.") but I know the whole program is broken.
> They have like 90 percent margins on those syrup/water mixes.
Not really. There's this myth that it only costs a few pennies to fill a cup with soda.
I was a manager at a Subway from 2006 to 2012, so I got to see the costs of all our food. I did the math and found it cost about 1.7 cents per ounce dispensed, so a 32 oz soda cost 54.4 cents to fill assuming no ice. The cup/lid/straw cost us about 12 cents. At the time, we charged $1.69 for the soda, giving a margin of about 60%. This margin of course went up if they used ice, but went down if they refilled it.
I'm sorry, what? People drink a whole litre of soda with their lunch? I don't understand this on multiple levels. Who would buy this, why would anyone sell it, and should that even be legal?
The cost of ingredients for sandwiches was 22-35%, depending on what sandwich it was. Of course, that's only for the ingredients themselves.
About 20% of revenue went to labor. I'm sure you're thinking, "But if you can make a sub in under a minute, and you pay $10/hr, shouldn't it be less?", but there's a lot of time spent not making sandwiches, such as cleaning, baking bread, and other food prep. Sure, the lettuce came pre-shredded in bags, olives and jalapenos are pre-sliced, but we had to slice the tomatoes, cucumbers, onions, and green peppers.
And then of course, there's the cost of rent and utilities, plus franchising fees. Overall, our profit margin was under 10%.
I know this is sarcastic, but bakery outlets can be a great way to get your sugar junk for cheap if there's one nearby, though they're all pretty close to expiration.
There's a reason movie theaters push supersized popcorn and sodas. The ingredients cost almost nothing. (OK, that's an exaggeration but they're certainly high margin--especially at movie theater prices.)
Are taxes not higher in Detroit for things like fast food? I'm asking since I think Detroit does have the highest property taxes in the state and one of the highest in the country.
1) Greed isn't a variable here - McDonalds today can't be more greedy than McDonalds in 2020. McDonalds in 2020 was already capped out as far as greed goes. They have been the poster child for corporate greed for decades. If greed could make prices go up they'd have been selling $3 burgers back in 1950.
2) If prices go up by 50% without an increase in costs, profit should go up by much more than 50% and share prices should be doubling, tripling, etc. If their stock is up a lesser percent than the price of their goods, that suggests they are being squeezed. The share price going up is effectively just another effect of inflation.
Why would you pick the situation that is clearly impossible when we're talking about inflation? Of course costs have increased.
If prices go up by 50%, and then you subtract the increase in cost, then any measure over 0 is potentially a greed-driven number.
It seems unlikely that zero companies are riding the wave of inflation acceptance in the population. At least some companies must be increasing their costs because most people aren't willing to check the math.
That isn't always greed related, sure, and some companies may be hedging against further cost increases on their end, and some may be using the increased profits to recover from COVID losses. But still, saying greed isn't a variable, as you did, seems a bit naive. Or am I missing some greater economic concept?
It is a practical concept. If you think greed is a variable, then you will have to explain why McDonalds suddenly got greedy in 2022 and from 1940-2021 they've been charitably keeping prices low. Any why they aren't raising prices right now to the even higher numbers that we'll probably be seeing in a few years.
They just sell for the price that they think brings in the highest profit. That is the algorithm. Their motivations aren't a factor and the algorithm is has always been the same. They could be greedy or they could be not greedy and that doesn't change the situation.
> It seems unlikely that zero companies are riding the wave of inflation acceptance in the population.
It is possible that there are zero of such companies. The populace doesn't get to set prices - otherwise prices would be cost to manufacturer for everything. Since companies make a profit, it is clear that consumers "acceptance" doesn't influence the price.
People aren't accepting these price rises. They're saying all sorts of things about the companies doing them. Doesn't change the fact that the price has changed.
If greed or the acceptance of consumers were important then the situation would look different. Neither matter much.
I feel like there is an opportunity for an app here that lets you input what you buy and see how the price has increased compared to the competition. There seems to be a lack of automated price comparisons here. I guess people can compare prices when shopping in store but if all companies raise their prices, I'd imagine some people would just stop buying if they knew about the price collusion more easily. I thought a cool app for the Apple AR goggles is to allow you to overlay the inflation increase of prices as you walk through a grocery store.
I was thinking about something similar for a personal meal plan app.
I want the ability to keep a list of recipes, and when I chose meals for a day/week, have the app take the ingredients list and scrape price sources (supermarket websites, etc.) and then give guidance on exactly where I should purchase each ingredient I need. Then simply track the scraped prices over time for the nominal inflation that you've mentioned.
As an addition to your excellent idea: recommend recipes with ingredients that haven't inflated as much as others.
I read somewhere that this summer strawberries have inflated a lot less in price compared to other fruits. It then led me to having this conspiracy theory that this is why I saw nonstop promotions for strawberry related products/promotions this summer.
Their increased costs are already factored in because we're talking about profits though so I'm not sure how much use deducting that again would be for determining that.
It is not about deducting but adjusting. In an inflating currency with a constant profit margin, you are basically always going to report "record profits" because a 10% margin on $11 is nominally more than a 10% margin on $10 from a year ago but if the currency inflated 10% in that year, your profit isn't really record because it buys you the same amount of goods and services as it did a year ago.
Their profits account for inflation already in some ways because the increased costs are already accounted for when we're talking about profits by definition.
>> And their stock is up 30% in the same timeframe. That's not inflation hitting supply chains, that's just corporate greed
You're assuming the stock price reflects increased profit. I don't doubt that, but it is not a given. IMHO the stock market has been going up for 20 years due to the 401K plan thing - the highest income people are indiscriminately dumping part of their pay into mutual funds every month. This is part of the reason white-collar jobs were more protected during covid, while hourly folks got told to stay home. If they made people with 401K stop working the market would have collapsed.
So, why did these greedy companies not raise prices to this rate when times were good? Surely there's more money exchanging hands when times are fine and dandy.
I think a lot of this is a combination of "because everyone else is doing it" and "because we can". I've seen a huge price increase in branded and prepared food products. Staples like fruit, veggies, eggs, etc. has gone up in price but much less than the branded.
I also think a lot of companies are running near capacity. Labor market is tight and the supply chain is still reeling from Covid. So there's not really an opportunity to lower/maintain prices to get market share.
The whole point of this inflation is, times ARE good. People have too much money to spend, the job market is too hot, which is why the fed is raising rates so fast
When times are bad, McDonalds sales go way down, then they re-introduce the $1 menu
I don't get people like you. You're saying that on one hand, McDonald's raises prices unreasonably high because they are greedy. But on the other hand, you're saying that other corporations are not eating up McDonald's market share with lower prices because... why? Because those other corporations are not greedy, and just want to help McDonalds out?
I was shocked when I went to buy my last 3.3lb bag of cat food and found it had gone up $4. My cats eat a 50/50 mix of baked chicken and dry food. At $3/lb chicken breast is way less expensive than the $7/lb dry food. I can only imagine how much people are spending on their medium to large dogs to feed them.
We've stared buying the cheapest "people" tuna cans for our elderly cat; I think they've cheaped out too far on the cat food and its not really "food" anymore.
Literally the first car I searched for to answer your question (audi s5) had starting prices:
2020 $51.9k
2021 $52.5k
2022 $55.3k
So, yes I can find such a car and it was quite easy. You should reconsider how likely people are to over-estimate the changes in prices compared to a systematic approach to tracking inflation like the BLS performs.
There were manufactures and dealer rebates before. My coworker bought Odyssey years ago for $6k off MSRP. I am not in the market for a minivan, so I don't know what rebates were year ago.
Everything seems to be going up, but interesting that you brought home insurance up? Any particular reason why you mention it?
I guess if house prices and building material and labor costs are increasing, it makes sense that insurance would too. (Although I'm sure if everything dropped, insurance would remain the same)
Coastal and flood prone insurance is rising in the US at a higher fixed rates the next couple of years because of federal policy changes that reduce the insurance cross-subsidy for riskier areas.
This was my experience while living in Florida. Hurricane/Flood risks made it so there was no "shopping around". I had a house (built in the mid-60s) with a ton of tree cover. There was basically one company who'd even talk to me. I can't imagine what they'd charge me these days.
As a Florida resident, the florida situation is screwed but not because of hurricanes and flood risks.
The problem is our laws about assignment of benefits and how insurance lawsuits get punished. So what happens is anytime any storm comes in you get swarmed with roofing companies wanting you to assign all benefits to them and they offer you a "free" roof. They then keep telling the roofing companies their previous estimate for roof was too low and they needed more money to fix the roof. At the end of the day the insurance companies end up paying double the cost of the roof because that's cheaper then the roofing company suing them, having to prove the costs they are being quoted are excessive, and if they fail they have to pay it out anyway + attorney fees.
We saw this ourselves when we had a hail storm at our house and didn't know any better. We did the AOB to a roofing company. That company never even looked at the roof. They called the insurance company, who sent an adjuster who looked at the roof. The insurance company wrote us a $15k check for a replacement roof. 3 months later (when the roofing company hadn't even looked at our roof still, let alone given us an estimate) we get a notification from the insurance company that the roofing company told the insurance company it would cost an additional $8k, and the insurance company wrote them a check.
We cancelled the roofing contract and shopped around. Got our new roof replaced within a month for $13k (we had 3 quotes from different companies, no company quoted more than $14k).
This is why insurance is going up so much in Florida, and why insurance companies are leaving the state. Last I saw, Florida leads the country in insurance litigation cases per year by a ridiculously wide margin to the 2nd highest.
And I'm not an insurance company defender or anything, but all home owners and renters in florida are all paying the price for this.
Why would the insurance company pay more than the adjuster's estimate? Isn't that the point of them sending a loss adjuster, to determine how much they should pay?
When the adjuster comes out, the roof shingles are still there on the roof. No demolition has occurred yet.
What happens is the roofing company claims to the insurance company that they had to replace more boards, they needed more nails, and a bunch of other material costs they claimed they needed. Since the policy states that the coverage warrants a replaced roof (of the same type) in this instance, the roofing company is claiming that a replacement roof costs more than the estimate and thus should be covered.
The insurance company could send another adjuster out to verify that the replacement roof costs as much as they did, but they'd have to verify how many boards are replaced (which means going without a roof until the adjuster verifies all the damaged boards), material cost for the roof, etc... That's a lot of investigation they need to do to fight a supposed excessive cost when the laws of the state make it very hard (and costly) for the insurance companies to win a denial that gets litigated.
It's not unusual for insurance companies to pay more than an adjuster's estimate though. An adjuster can't always see all the damage (they can't see behind walls, can't see under existing roof shingles, etc....) and if the policy covers fixing the damage then that means covering all costs it takes to fix that damage (minus deductible). So it's a balance between making sure insurance companies have the ability to push back against scamming of policies and consumer rights of making sure consumers get paid out what they are adaquately owed. Right now the balance in Florida is too far in the consumers favor and that's causing insurance companies to get scammed, and thus leaving the state, causing all consumers to ultimately suffer.
The situation is SC is similar. Many insurers have packed up for the same reasons they left Florida. The same roof repair scams have been running here as well. What I don't understand about the scam is how the insurance adjuster comes out and agrees that a new roof is warranted when so frequently that is not the case. If the adjusters kept the lid on things none of this would be possible I think. It's baffling, but in the end is bad for everyone (with the possible exceptions of the roofing companies) My house is not in a flood zone, but we definitely need insurance. (we actually have flood insurance despite not being in a flood zone.)
Many house insurance companies give you a 10-50% new client discount, that slowly goes away year by year. The only choice is to jump ships every few years.
I have an insurance agent who shops it to every carrier. I jump around every year but it doesn't help too much because the insurance for the insurance companies are tightening their belts.
I was complaining about Oreo prices to my friend group on Discord literally last night!
It's been a long time since I've had an Oreo but I cannot bring myself to pay $6.99 for a 14oz package of oreos when I can bake my own cookies for pennies.
Not quite the same as an oreo though. Target had a store brand oreo-type cookie that was IMO even better than the real thing. Used to be $1 for a 14oz package but they've since stopped selling it...
My electric bill doubled and my electricity provider (Xcel Energy) added salt to the wound by suddenly terminating my Ecobee smart thermostat Eco+ cost savings program for the following reason: "not a single family home." Gee, thanks for discriminating against non-homeowners in the middle of all this.
I know that, at least in the New Orleans area, Entergy effed up and undercharged people for a year, then decided it was a smart idea to reconcile their screwup by hitting people with a $600 bill last month for a home that usually uses about $300 in electricity.
Do you have a source other than hearsay about the doubling? I find nothing in their rates (or rates published by watchdogs) that indicates a double payment. I only see places like Fox News style "some people have claimed..." stories.
The only actual stories with solid data say the increase is due to natural gas prices, which have not nearly doubled, so it'd be surprising that the end product doubled. And stories showing how unusual high heat waves have caused people to use more energy, which naturally results in a higher bill.
Also, that's completely different than inflation caused, and I doubt the higher bills would last long if that double monthly bill is true.
Also, if people were undercharged, then they owe the money. Basically they got a better deal by paying less early.
You can go to the New Orleans subreddit and find people who are complaining about their electric bills there. I never mentioned inflation because it's not really big on their list of complaints, and there's nothing about that group which would make me believe that they're lying.
I looked at some of those. I find plenty of cases where someone had a broken meter, was undercharged, then was charged to catch up. The electric company allows them to pay over time if needed in all cases.
I looked through New Orleans rates. They never doubled.
I find zero cases where the electric rates doubled, which is what the person here claimed.
As far as complaints, I can find people here complaining their rates doubled, when in fact they did not. Going to another place is not much different than here.
As far as I have found, no electric company doubled rates, contrary to lots of hearsay.
I've heard from friends in the Gainesville area (GRU) that their bills have been in the 800 - 1100 range!!! Before I moved in 2010, I had a almost 500 bill and even that was just insane. When I look at the population of that area, I ask, "how many of your customers can actually afford rates like that? That's like a mortgage payment!"
Just yesterday I was checking Project Sunroof [0] to get an idea about how much I can save(based on my location this app says I have 1,634 hours of usable sunlight per year) and I am seriously thinking about installing Solar Panels.
I'd love to know what Duke is going to do. I have a 1950s block home with less than 3 inches of insulation in the attic (Duke Energy efficiency audit put it at a charitable R-11) and original windows that I was told by the HVAC person "leak like a sieve". Electric bill this month may hit $400.
Original windows are likely the biggest offender. You could just replace the largest windows if budget is a concern or place plastic over the inside portion to create an “insulative” air barrier between the plastic sheet and the window. The plastic trick worked amazingly for me when renting an old farm house on a city plot. Looks ghetto ugly though.
There’s clear plastic shrink wrap which truly does become nearly invisible once you run a hair dryer over it. Last one I used was “Duck” brand and worked great. People would walk up to the windows and be surprised to hit the plastic that they didn’t see.
My previous plan was 8c per kWh, it's now 16c per kWh. I live in Texas where you shop for rates. Before you're quick to crap on comments give a little benefit of the doubt.
> My previous plan was 8c per kWh, it's now 16c per kWh
Didn't ERCOT allow the Texas energy resellers to "recoup" the winterstorm losses (running into billions) from their customers over a decade? That increase was not primarily driven by inflation, but by good old socialization of losses while privatizing profits.
> Consumer price increases are inflation, no matter what drives them.
Yes, but I never argued it's not inflation.
Most suppliers lean on the crutch that costs have gone up for them (due to supply constraints or inflation) so it can get recursive: some consumer price increases are driven by inflation - the most obvious being inflation of fuel increasing the price of shipping.
The price increases on the Texas energy market deserves a special call-out because it's a hypocritical corporate bailout with public money on a so-called open energy market, without fixing the root cause. Throw in once-a-century storms happening every decade, and you got a stew going.
Texas generates more wind energy than any other state (in gigawatthours). I'm unsure if any other state has a higher percentage of their total production in wind. Texas is around 20% of total in wind on ongoing basis (and another few percent in solar).
During recent heatwave solar and wind provided nearly 40%, "
Several experts told CNN that it's owed in large part to strong performances from wind and solar, which generated 27 gigawatts of electricity during Sunday's peak demand -- close to 40% of the total needed."
Yes, Texas is the #1 producer of solar (by far) and #2 for wind.
I had solar installed on our house last year - just before supply chain issues got really bad - and so far this summer, it's generated enough to power our house every day. Of course, not every circuit is connected to it though, so I get to deal with the bs of "net billing" but the capacity is there.
This also tracks with my experience. I know tons of conservative people who are leasing their farms out to build windmills or installing their own solar panels.
Because of partisan divisions like the parent comment was trying to further. Conservatives have no ideological opposition to renewable energy, some are just starting to oppose it because "the team likes it" and politics is becoming more about tribalism than actual policy. If people stopped trying to paint people on the other side as "the enemy", we wouldn't have these kinds of issues forming.
There's a big divide between politics rhetoric from political parties, and what's actually going on economically on the ground.
Not only is Texas installing massive amounts of solar, wind, and battery storage, it's also mostly going into rural areas that are more politically conservative.
I wonder if they get the same conservative "No Industrial Solar" propaganda that pervades rural Iowa. A little bit of searching seems to indicate rural opposition to renewables to be fairly common.
Most rural people have no problem with industrial development unless it's highly polluting (and by "highly" I mean "orders of magnitude above and beyond what it takes to make people here hand wring").
Declining support for renewable energy seems to be a result of team politics.
Painting with a pretty broad brush there. Rhetoric and reality frequently don't match. The strongest Trump-supporting conservative in my family happens to be one of the few of us who owns an EV, as well. Money talks.
Food is all over the place these days as long as that place is "up".
We just stopped going to Taco Bell all together. It's kind of crazy. I can't find a reason to go there any longer. As a kid, they were so cheap[0], the running joke was that $20 worth of food there would kill a person. It was about properly priced -- despite being a fan of Taco Bell, their consistency between restaurants (better, today) was terrible in the 90s -- you'd get anywhere from 1/4-3/4 filled shells with random mixes of cheese-lettuce-GroundMeat ratio.
I took my kids there last weekend ... it was over $30.00 and I didn't eat. Fast food -- across the board -- has gone up. In my area, and I suspect most places, it's because they need to pay upwards of $18.00/hr to employ enough people to keep the store (and now restaurant) open. I expect a lot of automation is coming (and I hope like hell McDonald's fixes their terrible in-store ordering kiosk ... and that's one place where it's becoming increasingly expensive to avoid their app).
My grocery bill went from ~$100/trip to $250/trip if I don't do the majority of my shopping at ALDI. So I basically stopped grocery shopping anywhere other than ALDI[1] for anything ALDI carries. I only avoided it, before, because I have 4 options within 2 miles and ALDI is 6 miles away (I love ALDI).
I've started buying a lot of "the maintenance things[2]" at the dollar store (now $1.25, and the independent ones are now $1.00 - $5.00). You have to be careful with those because some items are a terrible deal there and some of the products are fscked up[3] but we've gotten lucky with a few trips -- consider that a 32oz bottle of the same shampoo was almost $8 at the other places and after purchasing a "test bottle" we bought out the rest and two other local stores in the chain. We do that when we find a good one and end up with enough to not have to think about it for a decade.
The saving grace, I guess, is that I haven't had a commute in two years and won't be getting having, again. I also replaced much of the rest of my driving with a OneWheel. I'm filling up my gas tank less than once a month when I was filling up more than once a week, before.
[0] At one point they were running $0.49 tacos -- mid-90s.
[1] While everything went up there, too, it went up less ... although the frozen pizzas that are a guilty pleasure of mine still land around $2.39 (they never go on sale for $1.99 any longer, though).
[2] Shampoo/Conditioner/Soap/etc, things like Band-Aids/Toothbrushes (they carry fancy manual toothbrushes which my kids use)
[3] I've gotten Shampoo from a well known brand that I've purchased at a grocery store which was "separated". I guess I could have called the 800 number; guessing it was counterfeit/meant for destruction and ended up back in the gray-market.
Kind of a side issue, but I too have noticed that Taco Bell has gone from one of the cheapest fast food places, to actually being more expensive than other fast food options. This started before the pandemic/recent economic weirdness, but perhaps has become even more so.
I've noticed that too, though you can maybe still escape with the $5 box for now.
Amusingly the "Dominos Coupon pizza" has stayed constant through all this, whereas everything else around here has gone up - high enough that the difference between going to Culver's or going to the bar or an actual restaurant is basically nil again.
All this talk of Taco Bell and you reminding me of the '$5 box' got me to go there today -- there is no more (or wasn't currently) the "$5 cravings box" there used to be (like even a year ago?) that had a truly ridiculous amount of food in it, including fancy items like chalupas or whatever, and more than I actually want to eat in a meal.
There IS a $5 "classic combo" that's large drink, one crispy taco, one beef burrito, chips, and a drink. Which is still way more than you can get anywhere else for $5 these days, if that's what you want to eat. While the rest of the menu is going to result in a more expensive meal than you'd get most other fast food. Although maybe I'm wrong about that, I think maybe my local McDonald's has some "combo meals" at like $13 even?!
All the decent Papa Johns e-coupons went away. I used to be able to get a large 1 topping pizza at either place for $7 using the app, now it's only Domino's
> I took my kids there last weekend ... it was over $30.00 and I didn't eat. Fast food -- across the board -- has gone up.
This trend predates the current inflation.
Several major fast food chains appear to have worked out more effective price discrimination schemes that involve raising their menu prices to much higher than they used to be, then offering crazy discounts in their apps or via coupons.
It's always been possible to get significant discounts on fast food with coupons, but before they seemed to think they needed to keep their menu prices at least non-crazy or it'd hurt business. Something changed and a whole bunch of them decided they no longer needed to keep menu prices in the realm of sanity—10-to-1 this happened so fast and uniformly because one or more of the big-3 management consulting firms pushed new "best practices" across the whole industry in short order.
Now the menu prices are WTF high, but you can get 50-90%(!) discounts using the apps and coupons and eat fast food daily without ever paying anywhere near menu price.
I haven't been to fast foods in a handful of years but was in a hurry last week and stopped at BK. A large combo was a few coins short of $15! Whoa. This used to be about ~$6.
If that's the norm I don't see how fast food will survive. Instead I'll go to the authentic taqueria next door, which used to be about double the cost for lunch (so I didn't go so often) but now it is actually cheaper and much better.
When I do fast food these days I almost always get off the bargain menu (inflation means it's not the dollar menu any more). I assume they made money from it but I doubt anyplace could survive if all the orders were that cheap.
It's plenty of food, if you skip the soda it's like $3 for a small burger and fries, or a taco and a bean burrito.
I see some BK combos are within striking distance of $15. Add sales tax, easily over $1 in many locations, and there you are.
Oh and the quality is going down. Inching down the yogurt in the cup. Reducing nuts in the cereal. Nutty bars taste like plastic. Corners are being cut.
Electricity is going up like mad in England too, they’ve recently changed the rules so suppliers can increase the price every 3 months instead of 6 months to allow more price changes.
Your electricity bill is probably correlated to heat wave more than inflation (depending on where you live). Also, the headline number is a very broad indicator. Inflation hits different sectors and different regions very differently. It's not a uniform force, it's derived from thousands of data points. Also, bear in mind that a "drop" is a drop in the rate of increase. Not an actual drop in prices which is something that never happens by design.
My gas(for heating, not petrol) has literally just gone up 600%. You look at these numbers posted in the media and you think "what are they on about? What 8.5%?".
For me (I also use gas for heating), this would mean an increase of monthly expenses around 5-8% during winter months. (assuming 6x increase in the last winters bills). Though I don't live in an 6 bedroom glass house, so other people mileage may vary.
Though average food/fuel prices have also gone up quite a lot, so the total monthly expenses have gone up more around 20%, which is a lot more closer to actual inflation in my region.
I'm with octopus. 7.34p/kWh is their flexible tariff, 18p/kWh is their fixed deal at the moment. My old 3p/kWh just expired and I'm not risking the price increasing even further, so I think the fixed deal is still the right way to go, even though it means increasing my price 6x right now.
My natural gas bill used to be $16 before I used a single ccf, now it's over $20. This winter I'm going to keep the heat at 60. 1500 square foot house. My winter heating bill maxed out at like 60, I'm looking at double that this winter.
It’s costs me about $100-$160 a month in the winter for gas to heat my home in the Deep South.
My area is upgrading gas lines and now the base surcharge is $35. However that’s not a forever charge.
My price per therm has more than doubled when I renewed this year. That won’t mean my bill doubled as there about $40 or so in fixed costs before gas use is accounted for.
Yes I do feel better. By energy efficient do you mean newer construction? I assume it wouldn’t be old stone construction (EU/UK old world stuff) that would be sucking up heat in winter.
Insulation, construction style, and usage makes a gigantic difference. Two houses of the same size right next to each other could be using 400% different amounts of energy.
Around 2,200sqft but that doesn’t include a half basement (heated) and half garage (unheated but gets some heat). Updating my numbers above $170 was an exception.
Of course it goes down. Take a look at this chart, expand to 10y or max; inflation was about -0.75% in early 2020. In fact, it went into negative territory many times in the last decade. Prices go down during recessions, particularly.
OTOH, the Fed has goal of maintaining a 2% inflation target; so in the long run you can expect it to go up. For many many years before the pandemic, it failed to achieve that goal. Inflation was too low; which means job growth, wage growth, and gdp was below potential.
Prices are an index and very rarely is the index not at an ath. Even in The periods you mentioned, the index was only off ath for a month or 3 and that’s mostly noise from
Energy prices, so no it never reached a new equilibrium below where it was (that would be disastrous)
We have seen unemployment fall slightly below 2019 levels, but the more significant result of greater demand stimulation would have been reaching those levels of unemployment much faster, rather than taking a decade to recover from the great recession.
What are the actual metrics they use to measure inflation? My electric bill is 33% higher than previous years, my gas bill is similar. City/Water/Sewer doubled. Trips to the grocery store are up close to 20%, and gasoline doubled.
Everything you actually purchase day-to-day is up far more than the inflation benchmarks, so much so it’s beginning to feel like propaganda.
I overnight went from thinking “I make good money” with a respectable savings to going backwards every single month, and I am generally a VERY frugal person.
The short answer is, the BLS samples prices of many consumer products in various categories (some from direct observation, some from consumer surveys) and calculates a weighted average[1] of the prices. The result is the Consumer Price Index (CPI). The consumer price inflation is calculated as the percentage difference of the current CPI compared to twelve months ago.
There's no way to do "the main inflation number" and make everyone happy - because they have to try to find some way to include housing, and that either drags it way up or way down relative to how you "feel".
If all other prices double, but you own or have fixed rent, you're going to feel it but the numbers will be muted; if all prices stay the same but your rent doubles, you're still going to feel it but the numbers will now seem off again.
But they have to do something like this right? I mean, consumption patterns have obviously changed since the 1960s. I understand maybe the way they adjust isn't correct but if you think this is a really easy problem you probably haven't considered it enough
No they don't have to do something like this. The change in consumption patterns is caused by inflation and should be measured. If someone has to switch from buying steak to ground beef, it's not a change in preference. They've stopped buying something they can't afford.
> The change in consumption patterns is caused by inflation and should be measured
While inflation can change consumption patterns, its not the only factor. For example, how do you compare your current spending on a mobile data plan or video streaming service compared to how consumers spent their money in the 1970s?
I am squinting at print media, broadcasts, and maybe live performances as a form of data. For example in the 1970s I expect my family had a book budget. My book budget has been subsumed by my ISP budget and they both effectively accomplish the same thing (reading material).
I know that this specific example wasn't crucial to your overall point, but I thought it was an interesting tangent to take literally.
And par for the course for Weinstein, he makes an interesting point while wrapping it in a vale of needless conspiracy mongering.
Yes, the rate of inflation is slightly different for different products and services (it is a "field" rather than a "scalar"). Yes, it would be nice if the government reported the entire inflation "field" rather than just the top-of-the-line aggregated inflation number.
Does this mean the government or economists are "lying" (his word)?
Well, not really. The government DOES report the entire inflation "field". They have done so every month, as part of literal press releases, for years. All the data is available on bls.gov for anyone who is interested. And many people are interested and have made use of the data, which -- again -- is entirely public.
>"Does this mean the government or economists are "lying" (his word)?"
The way I see it, it is in the government's interest to "lie" about the rate of inflation because it is advantageous for them to do so. Inflation is used as a tool in monetary and fiscal policy. "Inflating away" debt is a real strategy and policy.
"Lie" is a loaded term, and perhaps this is a limitation of our vocabulary. Because inflation has no universal definition or universally accepted measure, economists and statisticians have leeway when they calculate what the rate of inflation is. For the sake of argument, let's assume there is a "real" inflation rate. Having an "official" number lower than the real number means the government saves money on expenses that are indexed against inflation, and they get to repay debt with inflated money. The converse of this is costly for the government, as an official number higher than the real number means they have to spend more than expected. Therefore, it makes sense to me that the government is incentivized to under-report, and that they can do so because of how complex the calculations are. Is it a lie to switch to a different model, one that happens to result in lower official numbers? That's up to your own interpretation.
thanks! I didn't know shadowstats was just adding a constant to the BLS data. I thought they were actually re-calculating using the pre-1980 method as they claim.
That's specifically the Bay Area though, and inflation is a national average. Most other cities have not had that kind of housing price growth. I like to occasionally look at the sale prices of the houses I grew up in (partly because the listing photos are interesting to see how the new owners have redone the insides), and they've gone up about 2x since 2000, or annualized 3-4%.
Two examples: 3bd house in the Chicago suburbs, sold for $190,000 in 1999, and $420,000 in 2021. 5bd house in the Houston suburbs, sold for $290,000 in 2003, and $480,000 in 2022. If there were 5x price growth, these houses should be selling for $1m-$1.5m.
What percentage of household spending did they allot for high speed home internet access in the 1970s inflation statistics? How about people's budgets for cell phones and personal computer hardware?
Yeah, the problem with inflation is that it compounds year after year. If the inflation rate remains stable at 7%, it only takes 10 years for the value of the dollar to halve.
You should be suspicious of any metric that attempts to whittle inflation down to a single number. The purpose of single number measures of inflation is so that the people who get judged by those metrics can manipulate them.
Yes, any single number that measures unemployment or inflation can be misleading which is why there are in fact multiple measures.
However, the public generally is used to a specific unemployment measure and a specific inflation measure which is what's generally reported in the news.
They're used to half ass analysis from news outlets that report on that single number instead of doing their job and adding detail/nuance to the discussion.
It is propaganda. I don't see how anyone can think it wouldn't be. The BLS is part of the executive branch and therefore has a vested interest in making the executive branch look good. If you gave a private company the responsibility of auditing itself, most would regard the audit as worthless, and I think rightly so. But for some reason people still trust the government to have totally pure and disinterested scientific intentions, and I have no idea why.
It is interesting, at best, aggravating mostly, that folks are still adamant that we can apply the heuristics of the past to conditions in the present. Evidence suggests we cannot. Governments, government bodies and other vested interests around the globe are covertly managing (taking liberties with the "numbers"?) the downward spiral in order to maintain some semblance of control and not have everything derail too quickly or catastrophically [1]. This includes but not limited to all the movement on digital currencies and ID's, and the dreams of the WEF and associated minions. The climate crisis and the emerging reality that we can no longer live on a finite planet with goals of infinite growth [2] will force discontinuities and catastrophes that are hard to fully imagine, never mind prepare for. There is solid evidence that fossil fuel availability - the cheap to extract kind - is in steady decline now [3], so excitement over falling pump prices is misplaced. The economy is energy and energy is the economy and all of the impacts of our economic and cultural decline have yet to reveal and play themselves out.
[1] In economics there is a proposition known as Dornbusch’s Law that states: Crises take longer to arrive than you can imagine, but when they do come, they happen faster than you can possibly imagine.
While I don't doubt that governments like to bias the numbers, if they are doing it this year to convince us we have no inflation issue, they are doing it very poorly.
No freaking way! My rent just went up 15% (and last year too, which forced me to move out and look for a cheaper apartment), all groceries are up 30% across the board compared to last year, I know because mobile apps show my previous receipts.
These are the times I feel dumb for not being a homeowner (despite technically being able to afford it, just didn't want to get locked down in an area for 8+ years to make the rent vs buy math work out, though at these rates of inflation the math would turn around much quicker).
Everyone that recently bought houses made out like bandits- two consecutive years of 20% appreciation AND historically low interest rates. And as a bonus, owning a house is a great hedge against inflation!
No? In the US a residential mortgage is almost always fixed rate, locked in for the entire term (i.e. 30 years). So it can basically never go up, just down if the opportunity arises and you can willingly refinance your loan as interest rates drop.
That's interesting, in the UK it's generally fixed for 2/3/5 years but then reverts to a pretty lousy rate (unless you remortgage to another fix). If you're lucky you fixed just before this all started, and won't have to remortgage for another few years when rates might be dropping again.
Your principal and interest payment can never go up, but your property tax (which is included as escrow on your mortgage) definitely can. I live in Texas, and my mortgage will be $400 a month more next year because of rising property tax.
But that would go up at the same rate as renting, no? I imagine you're replying mostly to the "mortgage stays fixed" comment, but relatively speaking i think it still holds true. Sure, taxes may change, but so does the value of the dollar, etc.
In theory every cost you pay as an owner, you pay as a renter - just with less time investment as a renter. It's a convenience fee.
Mortgage payments are composed of: principal, interest, taxes, and insurance. Some people may have their HOA dues also bundled in, but most don't. In any case, HOA dues are usually pretty small (like less than $500 per year), unless you live in a condominium or a neighborhood with really expensive stuff owned by the HOA, in which case they can sometimes exceed the other components of the mortgage payment.
Most folks in the United States have fixed rate mortgages. So at the very least, the two largest portions of a person's payment will not go up: principal and interest.
The last two (or three, if you include HOA dues) generally go up over time, especially in places like Texas that use property taxes in lieu of a state income tax. Insurance will go up too, as the actual amount the policies cover (e.g. the cost of replacing the house) rise over time as well.
Of course, maintenance goes up over time as well--as do utilities. Not part of the mortgage but certainly part of the cost of living in a house over time. Value often increases over time as well but this isn't cash in hand over the course of living in a house.
> Value often increases over time as well but this isn't cash in hand over the course of living in a house.
You can "cash out" the value increase without having to actually sell the property by remortgaging the house, but that only makes sense when rates are low.
Taxes are escrowed and bundled in with the monthly payment to the mortgage provider though.
My taxes went up quite a bit this year, which reflects in the monthly payment. Of course the mortgage part of it stays the same, but the overall monthly payment which includes the taxes and insurance goes up.
And if you have been renting and saving money to buy a house, your purchasing power is exponentially lower when both factoring both home prices and interest rates all while your rent is increasing.
Anyone answering “no” to this is wrong. A mortgage payment includes insurance, various property taxes, principle, interest, and sometimes other items such as mortgage insurance.
Principle and interest are fixed for most people. Mortgage insurance, as an example, is fixed. Everything else is variable.
The vast majority of buyers will see huge changes (increases) to their property taxes and insurance over the lifetime of a mortgage.
There’s also opportunity cost from all the upfront and ongoing capital, and homeowners practically never include that in their monthly costs estimates. Opportunity cost grows over time, too. Not just from compounding growth, but from maintenance and repairs that you otherwise wouldn’t make.
TLDR owning a home isn’t a fixed cost, and it’s usually way more expensive and variable than people are admitting or calculating.
I have a very detailed spreadsheet where I modeled everything, maintenance expenses, taxes, fees and the opportunity cost of all those maintenance expenses going up over time as opposed to invest them in the market. I couldn’t find any online calculator that was as thorough as mine, as they all suffered from some variation of what you are describing.
In almost every single test I’ve done, buying becomes way cheaper than renting and investing the difference after 5-10 years. Pretty much the only case where renting gets ahead is basically if the house appreciates less than the rate of inflation (again, painting broad strokes here, please do not interpret me too literally), or if one wants to move too frequently (my case).
This is not because housing is some magic investment, but because fixed cheap leverage is. If I could get a 30 year fixed-rate cheap non-callable loan to invest in market indexes, it would be a similar situation, but margin is an incredibly riskier different instrument.
I didn’t say buying wasn’t cheaper in the long run. I said it’s not as cheap as people think, and it’s not as fixed as people think. There are people on this thread claiming that owning a home guarantees fixed costs for 30 years. That’s outright false, and naive.
Given all of the COVID money, trillion dollar spending bills, supply chain issues, etc have been building up over the last few years, why does inflation ramp up suddenly all at once? Shouldn't it be more gradual?
roughly, changing prices has transactional and psychological effects, so suppliers hold out on price changes as long as possible, then do bigger changes (especially in non-liquid markets). So we see fewer big step changes in prices than smaller continuous changes (except for things that are traded frequently, like commodities).
Also there is a herd effect with consumer pricing. Once a market leader raises a price, that makes it 'safe' for other firms to match the price change.
COVID money also came with lockdowns, which reduced spending and thus delayed inflation. It also naturally takes time for inflation to travel from assets to commodities to consumer goods.
Furthermore there was no justification for raising prices other than "there's now a lot more money floating around, it's a free market baby".
Citizens wouldn't accept that, especially as most of them didn't get much richer from COVID money (mostly only asset owners did). But they can accept inflation when it's "caused" by a war instigated by a foreign dictator villain.
That's how it works. Inflation is not a force that acts on all prices. It is a measurement of a weighted average change in prices. One thing can be up a lot while another thing is flat, or even cheaper.
But the point isn't specifics. The point is that the existence of some things that went up by more than 8.5% over last year is not meaningful evidence that the 8.5% number is a lie.
Gas is still up for the year and only went down after hitting it's record peak, and it's the first month to be down after that crazy near 2 year run up from $1.80~
Name one other thing that went down. Literally everything is 20% more expensive.
- edit (post limit) -
Not being pedantic and yes I know monthly inflation fluctuates, some things are seasonal. I'm mainly talking about yearly inflation. Name one thing that is cheaper this year.
I'm genuinely curious because looking through my expenses there's not a single thing I can see that has.
Christ. I didn't expect the third degree about an abstract statement. Surely you agree that sometimes there are things that go down in price, at least temporarily (since it apparently doesn't count as "going down in price when something goes up and then goes down but not as much as it went up). The entire point was that inflation is a weighted average, not a statement about the specific price change of any particular good.
> Literally everything is 20% more expensive.
If you are going to be so pedantic about my post, at least be pedantic about yours. It is absolutely not the case that everything is 20% more expensive.
What the heck are you buying? Piles of steak? Alcohol? I have never spent $100 on a single shopping cart, whether you're talking about 2005 or 2022. I'm not even trying to be frugal, just seems physically hard to load up that much if you're buying actual groceries and carrying them home in bags under your own muscle power.
Hey, even Spring 2020. I remember taking over grocery duty during the early days of the pandemic and stocking UP for the whole month. And it would be like 200-250. I'm talking cart overflowing, meat for the freezer, wine, etc.
Careful with that last line. Toward the end Trump was making some serious moves towards not accepting the outcome of the election, and the idea that the election was "stolen" is still the going line in Trump circles.
Say what you will about the Biden administration, at least it's not threatening to burn the house down out of spite.
I'm not sure how anyone could honestly support the filibuster. It's extremely undemocratic and has mostly been used to prevent civil rights legislation and keep racism enshrined in law in the US. It wasn't even an intended mechanism of law in the constitution - it was introduced by accident, and only "discovered" as a mechanism to delay government action decades later.
You're equating using the levers of power as defined by our laws and constitution to trying to overthrow the results of an election. And you'll find far more Republican supporters of overthrowing a duly elected government than you'll find Democrats who want to end the filibuster. We have real evidence based on numbers that indicate this. You can't "both sides" your way out of attempting to overthrow democracy.
It's a relief to see actual price drops in fuel and transport services hit before the end of the Summer travel season. Barring additional oil disruption, we can hope to see other prices (e.g. food) correct -- or at least stop growing so fast -- at a lag.
Heating oil (diesel) is still 70% higher than last year.
I'm about to delete the oil heat, so have been watching this.. I will certainly be annoyed if it crashes back to the $2s next week (right after the conversion..)
Heat pumps are 2 to 4 times more efficient, and if you are in MA you can get upto a $10,000 rebate and 0% loan when purchasing a heatpump. Why would you stick with oil heat? Even if it drops to $2 it will be much cheaper to have a heatpump.
I am in southern NH and recently went to a cold weather heat pump system.
We had an oil boiler before hand so I had all new duct work added in the basement with an air handler and 3 mini split heads in the rooms upstairs.
I got quotes for mitsubishi systems ranging from 31k to 39K. Ended up going with an LG Red system for 19k. I then installed an heat pump water heat myself so am now fully off of heating oil and it is great.
As others mentioned, heat pump is pricy, especially if you are in an area where you have to go real deep (geothermal) or need gas backup anyway.
Whereas replacing the furnace and AC was a $9k job and there were some rebates for that, too. Electric bill is already down, and gas should be down a bit.
2020, 2021, and 2022 oil prices have been a cause of rather than a result of inflation. It dropped from 2$ in 2019 to a low of 0.70$ in 2020, then hit a high of 4.40 in 2022 and just dropped to 3.30.
It is indoors, you might be right. The tank might also be from the 1940s for all I know. In Canada, you are supposed to replace the tank every 10 years.
The last time oil was this high, the heating bill was $3800 for the year. At that price the decision is easy.
What could happen is we go into more competition for our natural gas with Europe this winter. For sure the price would be much higher. Luckily (for USA consumers) that the Freeport LNG terminal is off-line..
Let's say inflation is at 0%. Then McDonalds decides to double all of their prices for no reason other than that they want more money. Measured inflation will now be greater than 0%. Was that the government stealing money from you?
Money creation is part of the story of inflation, but it isn't the end of the story.
For the individual, yes, inflation feels bad knowing that the dollar you make today will be worth less next year. But at the macro level, it encourages people to spend money, fueling the economy. An economy doesn't work on investments alone, people need to buy products and services.
I'm sure everyone noticed .. but the ONLY index that actually deflated (decreased) this past month was gasoline. .. Not energy (electric, nat-gas, gas).. JUST gasoline.. It declined nearly 8% (significant) net-nulling the rest of the indexes which all continued to increase (food, building, all-other-energy-forms).
It's always interesting how on this website the economic news is actually worse than what the indicators say. Good or bad news, they're always lying to make it seem better than it is.
I know the market is cheering this news, but isnt it depressing. That means the Fed will continue to raise raies until this number drops to around 2-4% range. Do they expect that to happen by the end of this year or will it be an year or more to get to that number. Sorry I am not an economist.
How easy this value can be verified? In other words, do we have all inputs public and the algorithm (with all its "hedonistic adjustments") is fully accessible? Can we track changes in the algorithm?
Even with the effect of high base, I am getting increasingly suspicious of official numbers (same with the unemployment statistics). Energy costs have skyrocketed and they get into almost everything an economy produces. I guess, we could get a bit clearer picture after the incoming midterms.
The truth there are different inflation measures that tell us different things about the economy. Also, when the structure of the economy changes, the indexes used might mismatch what people are actually paying. We live in wild times, and it very well might be that there is more uncertainty in the numbers, or more mismatch from lived experience, than there used to be.
Have you done it? Can you confidently say that you can completely reproduce it?
What I would like to see ideally is something like a spreadsheet with all formulas, coefficients, and inputs being inside it for every published CPI value. And every calculation input in the spreadsheets has to include its source.
As the famous saying goes, there are 3 kinds of kinds of lies: lies, damned lies, and statistics. There is a LOT of wiggle room to play with inputs, coefficients, wights, and various adjustments.
The number the authorities give out is far removed from reality. Just head over to the grocery store. Try buying electronics. Inflation is still raging and I'm afraid they are just going to tell people suck it up.
There is absolutely NO WAY inflation suddenly drops like this
The Fed has aggressively raised interest rates and signals that it will continue to do so, and there is widespread worry about a recession. We've had two quarters of negative GDP growth! (though I tend to think the numbers will revised upward eventually).
In January, they moved [1] to using 2019-2020 price data, as they have done every two years for decades. [2] This is how the CPI works, and all of the methodology is public.
"But experts on inflation say the changes to calculations over the years have made the reported rate a more accurate snapshot of how much prices are rising for shoppers. The rate under a different methodology might be higher, they say, but the effect would be small, and the alternative number would do a poorer job of reflecting the costs consumers were grappling with."
The experts thought it would be transitory, but they were wrong, and most admitted that they were wrong.
It is ok to be wrong. Especially when predicting the future. Cut the malarkey.
As for it not being real, who said that? No one I know.
Unrelated to government spending? Well, inflation is multi-causal. Europe didn't go on a spending splurge, and yet they have inflation too. Most economists believe that government spending is at least partially responsible for the inflation. However, when the government was deciding to respond to the pandemic recession, economists advised them that the downside risks of over-compensating were smaller than not doing enough. And you know what? they were right. 8% inflation is certainly high, but this is no depression.
As others have pointed out, the stated goal is 2%. Keep in mind, however, that the Fed's founding mandate is to balance price stability with unemployment. The mandate takes priority over their stated inflation target, so don't be too surprised if the Fed pivots strategy sooner depending on how the labor market evolves.
You should also keep in mind that inflation trends tend to lag behind monetary policy, so the Fed will actually pivot strategies ~6-12 months prior to when the inflation rate is projected to return to 2%. This means that the actual rate we land at will be a lot more imprecise -- potentially as high as 4% or as low as 1% -- while policy gets dialed in. The Fed has historically been fine with a sine-wave pattern of this nature so long as it averages out to 2% over time (there will also probably be some magical thinking in underweighing the past 12 months of extraordinary inflation for the purposes of such averages).
One last thing: the Fed typically uses the core PCE for measuring inflation, which excludes food and energy prices, since they're prone to price shocks. The year-over-year core PCE was 4.8% for the month of July. They'll probably choose to overshoot this measure, however, since inflation sentiment over the CPI is highly negative.
Yes, well... they make their own predictions, so it's not really a matter of whether the public trusts the Fed as long as they are internally unified.
Public inflation expectations certainly do play a role in inflation, but, as Volcker showed us in the 80s, it doesn't matter how much credibility you have with the public if you're willing to slam on the brakes hard enough.
But I think a lot of the Fed's strategy was jawboning the rate increases - aka offering "forward guidance". Notice how the rate hikes were fairly measured and tepid. They didn't even start the actual QT until a few months ago. There's a limit to how effective jawboning is, and it requires the public have credibility in the Fed to do so. Eventually, you have to back it up with actions.
That's a fair point, but let's also consider that markets tend to overreact to rate hikes. The public's languid response to the Fed's inching of the interest rate may actually be a desireable outcome.
If they were truly going for shock & awe, it would have been much more effective do one single 2% hike rather than breaking it up over 3 adjustments.
I think it could have been but the underlying issues were never solved (bad enough to make inflation permanent on its own) and then energy and food markets were disrupted by escalation of war in Ukraine.
Had the federal government pursued different strategies this all could have been avoided and these rate hikes would have come at a much slower rate.
More complicated. Inflation expectations, supply chain fixes, fiscal policy, data/reporting lag, etc all play in too. If it's declining, let it decline. Fed can only influence, not dictate, inflation.
> No, the states and the federal government can too, by destroying money (IE increasing taxes).
Destroying money (taxes, when fiscal policy is viewed through the lens of monetary effects) is counterinflationary. Creating money (spending) is inflationary. Broadly speaking.
It seems that you're largely restating what the comment you replied to was saying. If not, please correct me because I may be missing some nuance that I shouldn't have. In that line of thought though, cutting taxes without cutting spending increases inflation. Because the borrowing of newly printed money doesn't stop. Without 1:1 cuts in spending it's problematic. That's what happened in 2017[0], a ~2.3 trillion dollar "charge" without increasing wages or jobs. As we see today. We were already at historically low tax rates while deficit spending, and then taxes were cut. I'm not a "supply side" guy so I'm not surprised that things didn't work out. Maybe someone will try to link growth in 10 years back to it. :)
I'm for low taxes of course. I don't know too many that aren't. But they have to make sense as well.
Oh my bad, I must’ve read the parent incorrectly. Rereading it now, I see my error. Yes I agree with you. It is a pretty simple concept. Any mechanism that reduces the amount of money in circulation has a deflationary effect.
I don't nobody loves taxes, and government wastes a lot of money, but doesn't some of that money goes back to the economy via government spending on infrastructure, workers, software, new projects, etc? So how is that destroying money?
Is that through treasuries sold by the US gov? If so, we wouldn't be "destroying" money by funding these.
The federal reserve has large holdings as well, which I believe it generated buying corporate bonds and MBS during covid - would we be "destroying" money by giving the federal reserve the cash to balance the books on all of those holdings so it can hold them to fruition (after buying them at a loss) without ever having to sell? It could then just toss away all of that money it received to cover the loss.
This could work, but I don't know the details or if this is the plan.
Just confused, and I've never had a real conversation about this - I hear "print money, tax money" but it seems too simplistic.
I'm not sure as to the specifics of this scenario, but as a general rule, the paying of debt is the destruction of money, because the debt now no longer exists on the balance sheet of the creditor. And I believe that's applicable here.
2%, but knowing this administration, it's quite likely that they just change the calculation to something that prints 2% regardless of what inflation is at the moment.
For example, based on the pre-1990s CPI calculation, inflation is currently at around 12%. No government's changes to the CPI calculation ever result in a larger inflation number, only lower!
> but knowing this administration, it's quite likely that they just change the calculation
well luckily, it's not the administration that decides the calculation method, the the BLS, and their method is also pretty transparent (https://www.bls.gov/opub/hom/cpi/calculation.htm) . Whether you agree with the method is one thing, but that method isn't just changed to suit a political purpose. And if you should so choose, you can look thru the historical methods and changes made, and form your own opinion (https://www.bls.gov/opub/hom/cpi/history.htm).
I suspect that everyone (Fed, consumers, government) will be relatively content to float around at 4% YoY CPI for the medium-term now that the "inflation overton window" (if you will) has shifted so much.
I can't imagine that policymakers are going to make precisely zeroing in on 2% their first priority given the current market anxiety... but that's ultimately a bridge that will have to be crossed when we collectively get there.
Inflation is a year-over-year measurement, not a ladder. Signal in the previous year matters too. If aggregate prices in the economy come down 1.085/1.02 ~= 6.4% from wherever they were a year ago, we're back at baseline. Within a few months the year-old number will start showing some of the elevated prices from last fall. I don't know that anyone necessarily expects to hit 2% exactly, but we'll very likely be looking at "normal" numbers again by the end of the year.
Which is exactly what all the folks trying to point out that this was a transitory effect have been trying to say, repeatedly, only to be shouted down by the inflatocaplyse cheerleaders.
(FWIW: if prices continue to come down as rapidly as they did this month, the "recession" is likely going to turn out to be a phantom too.)
The two biggest direct components to inflation are energy and housing. We have a slightly distorted picture here because the prices for both of these were in a slump during the pandemic. Moratoriums, less travel, less commuting, that sort of thing. So part of this is a reversion to mean.
But on top of that we've had a genuine demand shock as everyone has decided this year to travel. This might've been fine had the companies taken the Covid relief funds and not laid off staff like they were supposed to but they didn't. And they refuse to now pay market rates.
Reminder: there is no such thing as a labor shortage. There are only under-market wages.
But what we've had is this spike in inflation and the thing about inflation is that inflation tends to begat inflation. By this I mean that companies tend to start charging more anticipating further inflation. What does this do? It drives up inflation.
Profits aren't hurting because of inflation. The likes of Exxon and Chevron are making money hand over fist. What does the government do? Raises interest rates to tackle inflation while suspending gasoline taxes.
You can also tackle demand with taxation like a windfall tax. While inflation is above, say, 4%, you could simply charge an additional 30% corporate income tax.
Reminder #2: corporate taxes are only paid on profits.
You could then use this money to help those most hurt by inflation.
As for inflation dropping, that's not surprising at all. The writing was on the wall months ago as gasoline inventories started to rise as the demand-supply mismatch started to correct itself. Next year you'll probably be paying $2.50/gallon for gas.
If inflation hadn't been incredibly low for 20 years we'd probably be facing similar prices today without all the fanfare and complaining that comes with a sudden correction.
All I know is the stock market is really antsy and wants to be done with this whole “inflation/recession crap”. They want to leave that behind and go back to the old times of worry free trading. Any moderate or neutral news is taken to positive and there is going to push it up
Price levels actually did drop compared to June. If anything I bet people are more likely to interpret this incorrectly by believing that prices are still rising compared to last month, just at a lower rate. They are not, it's just that with a n indicator that compares current price levels to price levels a year ago it takes a while for the rate to come down, even if prices stay still or slightly decrease.
Isn't the change in this yearly inflation number saying only that this July's inflation was less than last July's? So going up or down depends only on the monthly rate a year ago.
Which makes sense because all other things in the CPI use oil to make and distribute goods. I've stopped paying attention to inflation numbers because they are all lies. The current CPI basket is complete nonsense. The numbers are built in such a way to always have low inflation unless oil prices go way up. Before this recent spike, inflation was "at historic lows and near zero". Really? Things aren't any more expensive in 2019 than then were in 2002? Nonsense.
2% inflation a year over 17 years (2019-2002) is about a 40% overall increase in prices. Having lived through decades where inflation was 5% or 10%, it has indeed been very low for the past couple decades.
Perhaps I misunderstood your comment, but note that "at historic lows and near zero" means that the prices in 2022 are very similar to the prices in 2021, not that the prices went back to the old values in 2019.
Of course, but there are lots of years where the inflation number was almost zero and even one year where it was negative. My allegation is that the basket is nonsense. For example, public college tuition (one of the major expenses for families) went up 250% net from 2000 to 2020 where as the CPI was up 50% net over the same time period. I think healthcare, housing, college, transportation, etc. aren't weighted into the CPI appropriately.
The percentages you listed are not equally weighted; they're weighted by what average consumers spend. People spend vastly more per month on housing and food than they do on gasoline.
So the conclusion that gasoline was the biggest factor in the overall reduction is not true.
Here's where you can dig out the weightings used from the BLS [1]
Probably actually very little - the amounts released aren't much compared to consumption; the price of gas fluctuates even under normal conditions due to large numbers of factors.
It's likely the price shot up and overshot what it "should be" (assuming such perfect price exists) and now it's settling down. The question is where the new normal will be.
I'm surprised how much everything seems to depend on fuel prices. If gas & oil goes up everything gets more expensive as production and transportation costs increase.
Let's say that CPI drops even quicker than it went up due to a combo of rate hikes working, demand destruction, and supply chains clearing up. What would the Fed do in that case?
Potentially end up with significant asset deflation. This is actually a big concern of mine.
We were in a definite asset bubble to begin with, so some correction was expected. But I'm concerned the fed's levers against inflation are slow ones and that we could see a real deflationary economy coming up here.
The economy has been fast to fall and slow to recover, so the fed is, IMO, in danger of overshooting their soft landing significantly.
Looking at the different categories, it seems fuel, energy and fuel commodities were the worst offenders for inflation and their inflation dropped the most this month as well
One nice thing about inflation is it does not matter what these reports tell you it is as you can easily calculate your real inflation value yourself (based on bills etc).
Why is food, energy, medical care, housing subject to supply and demand?
Why are the lifeblood of the species constrained on demand and flowing freely when they look away?
It certainly is convenient for you to believe the masses have to accept austerity in deference to normal humans who repeat these handy phrases and point to any old phenomena they control, assigning an immutable key-value pair to your memory.
“Gather ‘round, children; it’s time to recite the spoken traditions! Austerity is for the poor. Authority is for the rich.”
We could see this as stochastic terrorism; there’s no need to give the powers that be a free pass when it’s clear their power is built on reciting politically correct “truth” not serving the species and public.
Lucking into wealth does not place someones biology on another plane of cognition, or imbue magical powers of insight.
Edit: rest assured in proper social tradition I am indifferent to the literal state of anyone else. If some avoidable calamity should impact you or I have am in a position to empower myself at your expense, I am all in. Just optimizing for myself, in-line with the politically correct chants; Powell said there will be pain to people, not him of course but others. I’m just following the leader too.
Everything is subject to supply and demand. Why would those four things not be? Even if the money was coming from the government they would all still be subject to supply and demand. Even if money didn't exist those things would all be subject to supply and demand. What exactly do you propose to change that?
It’s pretty simple; stop coddling some peoples figurative identity. Rather than make a social game of merely “seeing” normal humans who are “special” in politically correct traditional terms, end specialness.
Subject Powell, Bezos, and the like to the same material truth as the masses.
Shift the real burden of providing something real to a bunch of non-contributors who stubbornly demand control of our agency so they can sit and engage in meta-analysis.
Make the con men yank on their own boot straps.
Economists and the likes real contribution is a whole of qualifying daily life that will occur regardless of their meta-analysis existing. History will have happened regardless of historians observing and writing books on it. Make people actually support themselves rather than ride on book sales of figurative stature. Such folks tend to use a lot more resources for output of insignificant value to keeping their meat bag alive. Why do they get to live in a bubble? They can grow some potatoes in between book deals.
Right now oil and housing are basically what are driving the narrative and as a result, fed policy. I don’t necessarily expect that to last forever but currently it’s very clear that the fed is basically reacting to monthly cpi numbers and the narrative that results from them. This fed has become very easy to predict, hence the massive moves in yields/stocks this morning. That said, if oil were to go back up for a few weeks to 110+ I’d expect the next cpi print to be higher than expected and this move to largely reverse. Kind of crazy so much is based on the price of a commodity nobody can really control, but it’s where we are.
I'm not sure there's a transient inflation camp to go back to - the cornerstone there was the idea that inflation could correct without big impacts on capital market, real economy, or fed policy. All of those ships have sailed. The upshot is it should be possible to discuss when inflation will slow down without being a denialist.
It wouldn't be transient though...it's been 1.5 years and prices aren't going down, they are just rising at a slower pace. I don't view that as "transitory." The transitory camp thought it would be a few months, it's been almost 2 years of relentless price hikes.
Because much of the inflation, especially that which hurt consumers most, was transient. That is clearly shown by how gas prices are dropping faster than ever before.
Why don't you look at something other than gas? Believe it or not but people need to eat food for example.
Also, the gas prices are still significantly higher than they were a few years ago so dropping isn't really a big deal until it becomes affordable again.
Lastly, one reason the price is dropping is due to releasing the reserves. When that stops (and it will have to eventually) the price will increase again.
Another questionable statistics. Bet in next announcement this number go up again. See if Fed will sit quiet and not raise any rate. Better tell Mark that his VR shouldnt have increase by 100 bucks! That is way higher than 8.5%. Same goes with those 6-7usd gas. Surely 8.5% on a dollar is just 8.5cent!
I think to most reasonable people, it's not fair to call it a "drop." It's a smaller increase than last month, but it's still a very meaningful increase in the cost of goods. Yes, my house is not burning as quickly, but make no mistake, it's still burning.
I'm of the mind that the Fed pulled it off. They did their job this time - crisis averted. We've got a rocky six months ahead, but there will be no recession.
Directionality is the easy battle, actually getting to 2% is going to be more difficult. Powell said its important to hammer inflation before the psychological effect takes place and it becomes a spiral. I dont think they are going to let up as long as were above 4%.
>So what are we going to be looking at? You know, we’ll be looking at the incoming data, as I mentioned, and that’ll start with economic activity. Are we seeing the slowdown that we — the slowdown in economic activity that we think we need, and there is some evidence that we are at this time.
Economic activity data is likely to continue to worsen between now and the September FOMC meeting, so I believe there's a high likelihood that they are opting for +50 bps rather than +75 bps.
This would signal that we are getting close to the end of the tightening cycle. You can see it in the price of risk assets today after the CPI data release - everything is up (markets are forward looking).
In a fake economy, money flows to the top, which includes people who have significant holdings in 401Ks. Most people never get paid enough to even fully save up for retirement by the end.
The opposite needs to happen actually. Prices for housing, used cars, and groceries are still out of control, and need to be reduced by 20-50%. Only way that happens is with higher rates (for houses and cars), and punishing suppliers for using the “supply chain issues” as an excuse to extort money from buyers (for goods and groceries).
There's a good argument to the contrary. People are struggling to fund essentials, 100% yes and need help. But higher interest rates won't help them and here's some thinking as to why:
Stagflation was last handled in the late 70s. The solution is to keep jacking rates up. We need mortgages at least 10 percent ;-) I'm assuming your comment was sarcastic. The expansion of the last 40 years has followed rather continual rate cuts which can't go past zero. We need to reset to higher rates and convince each administration not to cut rates to stimulate the economy but instead fix some things and stop insisting on exponential growth for eternity.
Hard to say we're seeing stagflation with current job numbers. It might happen, especially with the Fed being willing to increase rates, but it's not evident that's where we're at right now.
>> Hard to say we're seeing stagflation with current job numbers.
I thought the "stag" part was stagnant GDP and we are even in a recession. The inflation part is there of course. Even if it's not stagflation, the inflation part is due to dumping trillions into the economy and super low interest rates. I expect there to be a lot of pain when it actually corrects, but since there is also a trade war and companies are bringing production back to the US, we might see low unemployment for some time. I dunno, it's weird.
Remember that companies are really reluctant to part with already hired personnel. And that when recession-induced layoffs start they often look like an avalanche. We already can see the first trickles with the tech companies and it takes 9-12 months for rate changes to influence the economy fully.
You can't grow infinitely forever. Eventually, you'll never be able to hit the target and it will distort things in really weird ways. Just look at the machinations Jinping Xi has had to pull off just to keep China going.
They have had positive GDP growth above 5% since roughly 1990.
IMO, you should be watching the month over month numbers and only using YoY to contextualize. Looking at the delta of YoY data doesn't tell you much without knowing the rate for the monthly report that was dropped and the monthly report that was gained.
Well, you haven't named anything yourself. Please, enlighten us. But before you answer, remember that the UK didnt do any stimulative action like the US did and yet they have similar inflation problems. As does Europe.
Inflation is by definition the increase in prices. It is a drop because the rate of increase is slowing down. Do you think people will mistake it with deflation?
This is just going to push people further and further away into fringes and extremist views when they are lied to.
We are truly on our own now. Our government no longer serves the people but a smaller proportion of people that gets their representatives elected to spread lies about everything.
This garbage inflation number is just the beginning. Who knows what other absurdities they are willing to push to the public and punish people? I'm already seeing people who don't buy this number getting flagged on HN which is bound to have lot of affuluent ppl that benefit by pushing this number.
You aren't being lied to. if, as you seem to think, the government wanted to hide true inflation, you'd think they'd do a better job, right? you think Biden wants these high inflation numbers? what a joke. you're already on the fringe.
It isn't that the published inflation figures are falsified, or lies. They just don't truly reflect the cost of living, due to adjustments, hedonics, omissions, choice of basket items, product crapification and shrinkage, etc.
But with so many dissenting posts here getting flagged, you have to wonder.
They actually publish multiple indexes. I think it is hard enough a problem that a lot of people find can find something they don't like about any one of them.
It is the same story with unemployment. "Oh, the government doesn't want you to know how many people stopped looking for work because it makes them look bad." When the U-6 number is right there in the same report at the U-3 number.
Cleverly not false, just misrepresented. What they choose to measure and not measure is what allows for a certain ability to coax the numbers in a certain direction.
Technically but not really. Inflation will always lag at peak inflation because of the way the baskets are created. For example, you may buy butter during a low cost economy but switch to margarine when it's the opposite. In that case, the inflation figures replace the expensive item, with the cheaper, causing inflation to go down. Now if the margarine prices keep rising this year, or don't deflate, or other items don't in relation, then the next quarter, or the one after, inflation will increase.
There are a gazillion independent groups looking at economic data. What makes you think the government is able to falsify these numbers more than usual?
This is not Turkey, where they had to use all sorts of proxy measures to figure out the government was lying (and by how much).
Maybe Trump shouldn't crime so much. I for one want to live in a country where even ex-Presidents can become convicts, where no-one is above the law. Why won't Trump show us the warrant? Does he have something to hide?
And let's be clear here: I can't speak for you, but a lot of people on the right mocked all the folks marching (and yes sometimes rioting) over police violating people's civil and human rights. Not just mocked, but said that they should be given a beat-down by the police. Hell, Trump himself said that. To see all these same folks clutching their pearls over the FBI executing a lawful search warrant, signed by a federal judge, in which no-one was physically harmed, is just flabbergasting. That some are now calling for violent civil war is disgusting.
Where are the charges? I keep hearing he committed crimes without any charges laid against him. I thought we live in a country where the Justice system is based on innocent till proven guilty.
> Why won’t Trum show us the warrant
That’s not how our Justice system is supposed to work. Burden of proof lies to the state.
It is incredible to watch the fundamental concepts of western Justice system such as innocent till proven guilty, proof beyond reasonable doubt, burden of proof on plantiff being casually thrown out when it’s on the other side as if those are not going to come bite them. Once you throw out the foundations of the Justice system away, you become just as you said, like Turkey. Or like Brazil. Where if you think the opposition has a solid chance of winning against you just throw them to jail.
> where ex-presidents can become convicts
Fully Agree. But not at the expense of half of the country by mocking their political beliefs so the guy they voted for can’t run. I don’t question the warrant but why send agents? Why use the FBI even and not let the regular rule of law play out as it is? There was even another case recently where even the judge asked why FBI had to show up unannounced and exert their full force [1]
Making the Justice system and other federal agencies blatantly political has exactly the same problem as you outlined - when a corrupt official does get indicted because of an actual crime they committed many people would question the motive.
And if we are going to set the precedence by the way making presidents convicts, how about we start with a guy who lied to his entire country to send the country to war and cause thousands of lives? Or some guys who bailed out the wall street at the expense of the little guys in 2009? Or the representatives in Congress who blatantly uses insider information to get rich [2].
We're all talking about what happened, but the DOJ as a rule doesn't comment on on-going investigations. The warrant itself is all we have to go by. It is up to Donald Trump to decide whether he wants to release it to the public, but it would answer a lot of questions, and given the public interest, I think he should, particularly since he, and a lot of Republicans, are making some extreme commentary in response. Publishing a warrant doesn't say you are guilty or innocent, btw.
If Donald Trump had possession of highly secret classified documents, the FBI can't just ask for them by subpoena. Think about it. A subpoena means that Trump, his lawyers and other representatives, etc. would all handle Top Secret documents. Even Trump handling them is problematic since he doesn't have clearance. The only way to do it is for the person to voluntarily give up the documents when the FBI come to call (as they did back in June), or they can go get a search warrant, and take them.
The BLS reports inflation. It doesn't control inflation. The Federal Reserve does affect it with the fed rate, but it's independent, and the chair was elevated to his current role by Trump, so save the insinuations about this being somehow engineered by Democrats to win the election. I'm no fan of Democrats, but this is absurd.
"The Federal Reserve does affect it with the fed rate"
In general, it takes some time for this to have any impact on inflation, and in some cases effects may be uncorrelated if markets shift for external reasons.
What is a "Democrat", and how is it related to the subject matter?
While I can't seem to understand the unjust world theories... I do respect your misguided opinions.
Things you care about went double year over year? That's remarkable if true.
My biggest expense is a fixed rate mortgage, which did not go up. Followed by property taxes, which went up 2.7% between 2021 and 2022.
Electricity barely went up because my electric supplier locks in rates years in advance with long term contract. (I expected it to go up eventually but not 100%)
Food is harder to calculate because prices are variable since grocery stores have periodic sales. I just checked and Diet Coke at Sam's Club went up about 20% year over year- which is a lot but is certainly not double.
Since I tend to order the same thing at a local Wendy's based on my credit card history prices year over year appear to have gone up 4.2%.
I just looked at my older Walmart receipts. The cost of milk went from $1.35/gallon in February 2020 to over $4/gallon in 2022. Milk is just a quick and easy example. I’m sure I could find countless other examples if I took the time.
These odd local anecdotes are so silly - the benefit of having a Federal bureaucracy tracking prices is that they keep detailed records. Here's the nominal price of a gallon of milk over the last 25 years:
The average in Feb 2020 was $3.19/gallon. Today it's $4.15/gallon. So roughly 30% increase since then. The average cost of a gallon of milk since the mid 1990s has never been below $2.40/gallon so maybe that $1.35 you paid was a result of a panic during the early pandemic?
They are not necessarily lying, but they are clearly an outlier. My spending is maybe a few percent higher and prices for some of the things I buy are even down recently. Everyone has a different experience, which is why we have aggregate statistics to quantify what the overall effect is.
I generally agree that CPI "feels" to be consistently lower compared to what actual people experience.
But you can't have a meaningful discussion about it if you do not list the weight of the price hike in your expense pattern.
When gas for your car normally takes up 10% of your income, and this price doubles, your personal inflation is 10%, not 100% (assuming no other price hikes).
Just to be clear. The person did not say it his personal inflation is 100%. He said prices increased by 100-150%. If item X usually costs $3 and now it costs $6. The price of that item increased by 100%.
Perhaps he is only spending 10% of his income, but it doesn't really matter for what he is talking about.
What he implied with the term "conspiracy theory" in relation to inflation is that there's a vast mismatch between reported CPI and experienced CPI, hence the reported CPI is a conspiracy theory or corrupted.
Typically statements like "this increased 100-150%" are used to support the theory. The only thing I'm saying is that individual price hikes are meaningless without any information about the total expense breakdown.
That said, I do agree that CPI is typically slightly optimistic.
Gas prices doubled in my area (Southern California) for a short period of time a few months ago. Some of our gas stations were just a few cents short of $7. They have now down a bit (in the $5 - $6 range), but at one point it did get to double. I don't have any receipts to give you the exact dates and prices though.
I would say that you can't just look at average prices for the US. Look at the California version of that chart [1].
July 2021 to July 2022 is an increase of about 38%.
If you look at June to June it is 50%.
While not double, it is quite a bit more than 30%. Depending on the area the person quite possibly did recently experience double the price like I did.
These inflation numbers, as I assume other flagged posts have already pointed out, are extremely misleading. Does anyone really think that housing, food, gas, or any other major consumer expense has only risen 8.5% since a year ago?
CPI collects certain things some people have decided represent the economy as experienced by ordinary people. How well it works in general and for your experience in particular depends on the choice of items in the basket and how well they match your reality.
edit: There's a Planet Money series on GDP. I wouldn't be surprised to see a follow-up on CPI soon.
Except that they are constantly changing the basket to be a basket of cheaper goods. It's pretty bold to be so open about it, but that's what they do - it's manipulated.
Your "except" creates anticipation for disagreement, but you seem to be agreeing with me aside from the claim about manipulation. I didn't say it was accurate.
You should provide evidences for your claim — What have been changed, over how long period, and how are they cheaper goods compared to what they used to be?
Inflation is not a force that acts on prices. It is a weighted measurement of price increases. 8.5% CPI is perfectly possible even with 100% increases in the price of gasoline. "Wait, but this thing rose by more than 8.5%" is not a coherent argument. In fact, you can go look at the breakdown by price category and see the categories that have gone up by higher amounts.
Right, all my food staples are +20% from a year ago-ish.
I guess TV's are cheaper (and 'better'), so they use that double-plus-goodness to bring down the headline inflation figure. Nevermind you can't eat your TV (which now has ads, by the way) or ride it to work. You could burn it to cook on and heat yourself, I suppose.
Unless they just redefined inflation. I'll believe it when the prices stop jumping.
Also, given that the government is ultimately responsible here. And we pay taxes to the government. You'd think they might cut us some slack on that. Having fucked up and all.
Nah, the IRS is in complete shambles, as anyone who’s had to deal with them over the last couple years can confirm. It seems pretty likely that they’re just trying to unshamble it.
It might, the auditing level right now is extremely low. I was saying that it’s probably not the main point of the additional funding, though, so much as getting closer to a baseline of reasonably functional taxing authority. They’re currently drowning in even basic processing.
Pretty much everything is still going up, and it'll all be be even more expensive next year. A reduction in inflation doesn't mean things get cheaper... they just get expensive slower than before. Doesn't change the fact that things became insanely expensive really fast the past couple years, and we're not likely to see real relief for a long time (if ever).
I live in a small college town in the midst of farmland and forest. Very poor. Some of the lowest income in the country.
But taxes are crazy high. Property, sales. Higher than some big cities.
It's stupid expensive, unless you are on the dole. About half the population is on the dole here.
(We do have a very nice state-of-the-art triple-sized police station tho. And two marijuana dispensaries)
That really is the only solution to this mess. Put everybody on the dole. Like medieval serfs except with cellphones. Abandon freedom and property. Let daddy government take care of you.
Median income in 1990 was $50,500. Adjusting for inflation using CPI, that's $102,700 in 2020 money, but median income for 2020 was actually $67,500. Since 2020, this has been kicked into overdrive.
I believe wholesale goods inflation is somewhere near 30% since the pandemic began (inflation numbers look lower because services -- aka wages -- don't increase at the same amount).
The only people immune to inflation are the rich who have hard assets that aren't affected by inflation.
If people really understood how badly they are getting screwed by inflation, there would be riots.
im always curious about people (not you, the person you are replying to) who pop out metrics like these and mis-interpret them (not maliciously I'm assuming). I always wonder how many people they've repeated those facts to (most of whom won't fact check or think twice about it) and how many of THOSE people repeated them to other people THEY know.
I'm less interested in the people since it's pretty obvious why these "factoids" are so appealing to believe & spread. I find it more fun to catalog the more common ones and track their origins. Two of my favorites:
- "Medical debt is the #1 cause of bankruptcies." This goes back to a handful of papers by, among others, now-Senator Elizabeth Warren and colleagues at the Harvard School of Public Health. There was a lot of back-and-forth at the time, but I'll sum up the objection to the thrust of the papers and the factoid: People who go into bankruptcy tend to have all kinds of debt, and the authors made no rigorous attempt to establish the specific "but-for" causality of medical debt.
- "40% of Americans are living paycheck-to-paycheck." This comes, AFAICT, from the annual Federal Reserve "SHED" survey on household economic well-being. There's lots of good data in these, but downers somehow latched onto the "How would you handle an unexpected $400 expense?" question and interpreted any response other than paying it off in cash or equivalent as "living paycheck-to-paycheck". FWIW, the "pay it off" response has become more popular every year of the survey's existence, rising from 50% in 2013 to 68% in 2021[1].
I'm also stuffing my freezer with meat and have a year's supply of non-perishables, not because I'm a prepper but because I know it'll be so much more expensive next year as to be worth it.
Also my rent is up 6.9%, but that's because I locked it in for two years. Would have been 10.5% for a one-year lease, and that's on top of last year's comparatively conservative 4.5% increase.
And my salary is up a mere 4.5%, and that only because I took on stretch assignments at work.