Read on Twitter
Officially, inflation is 1.5%, below the Fed's 2% target.
In reality, some assets, esp financial ones & homes, are ballooning, as are some cherry-picked commodities, but not the overall commodities index.
What's going on...?
In reality, some assets, esp financial ones & homes, are ballooning, as are some cherry-picked commodities, but not the overall commodities index.
What's going on...?
There are several ways govt measures CPI (Consumer Price Index), which is the price of a "basket" of goods tracked across time.
https://www.bls.gov/cpi/overview.htm
The official calculation is controversial because it excludes energy & food. There's also lots of issues w/housing calculation.
https://www.bls.gov/cpi/overview.htm
The official calculation is controversial because it excludes energy & food. There's also lots of issues w/housing calculation.
Also, there was a secret bipartisan effort in the 80's to underreport inflation & lower official CPI as a stealth cut to entitlements (social security, medicare, medicaid), which are tied to inflation.
You can hear @EricRWeinstein discuss this on his latest @joerogan appearance.
You can hear @EricRWeinstein discuss this on his latest @joerogan appearance.
Bottom line is, the data is out there. BLS reports all versions of CPI but only uses one officially.
https://www.bls.gov/cpi/overview.htm
I think
inflation is likely from the vast printing of $'s to fund stimulus, infrastructure & health bills. The real tell will be in treasury yields...
https://www.bls.gov/cpi/overview.htm
I think
inflation is likely from the vast printing of $'s to fund stimulus, infrastructure & health bills. The real tell will be in treasury yields...
So far, we've been able to keep interest rates & payments low. But as total debt & currency creation rise, so does our risk as a borrower.
If interest on our debt go up by as little as 1-2%, at current levels, interest payments can devour a huge chunk of federal spending.
If interest on our debt go up by as little as 1-2%, at current levels, interest payments can devour a huge chunk of federal spending.
To cover rising debt payments, we'll likely print more $'s rather than default. Either way, we end up in some sort of inflation spiral and a substantially weaker dollar.
This will hurt savers, help borrowers (more cheap $s to repay debts) & help what exports we have.
This will hurt savers, help borrowers (more cheap $s to repay debts) & help what exports we have.
This would also empower China as an alternate currency provider, if they can maintain greater stability & convince investors, oil producing nations to replace $s w/RNB.
Crypto may also play a role of it is viewed as a stable alternative states can't manipulate.
Crypto may also play a role of it is viewed as a stable alternative states can't manipulate.
If inflation is likely, this is a good time to borrow & buy investment property or a home. You'll repay w/abundant, cheap future $s.
Also a good time to own appreciating physical assets (land, collectibles), gold, stocks and (gulp) maybe Bitcoin.
Also a good time to own appreciating physical assets (land, collectibles), gold, stocks and (gulp) maybe Bitcoin.
If you enjoyed this thread, share & follow @ideafaktory for more futurism+innovation+economics+culture+wisecracks.
And get The McFuture newsletter/podcast at https://stevefaktor.com/newsletter
And get The McFuture newsletter/podcast at https://stevefaktor.com/newsletter
The Bitcoin-as-Chinese-financial-weapon conversation is inseparable from the dollar-devaluation one.
As w/Covid, an outside enemy may be targeting us, but what steps can we take to make its job easier or harder? It's vaccine+lockdowns vs treadmill+salad. https://www.bloomberg.com/news/articles/2021-04-07/peter-thiel-calls-bitcoin-a-chinese-financial-weapon-at-virtual-roundtable
As w/Covid, an outside enemy may be targeting us, but what steps can we take to make its job easier or harder? It's vaccine+lockdowns vs treadmill+salad. https://www.bloomberg.com/news/articles/2021-04-07/peter-thiel-calls-bitcoin-a-chinese-financial-weapon-at-virtual-roundtable
Hopefully, this is how it plays out. https://twitter.com/Claudia_Sahm/status/1380843169043132417
