Inflation is NOT under 2%, what a joke! (debt, buying, interest)

[ilovemycomputer90]

A high COL living like LA does not represent the entire country. Southern California is notorious for being astronomically expensive.

Food is pricey, but there can be cutbacks and substitutes. Less meat, more pasta and couscous. Bake a potato for under $2 (including toppings), buy a frozen pizza for $5 rather than paying $15 at a pizzeria. Even cheaper if made from scratch. Just have to get creative. One thing I've noticed are packaging sizes getting smaller, especially with cereal. Crazy expensive now. That said, I still buy it as an easy snack or dessert (there are cheaper options but I'm too lazy). Another way of saving is by getting multiple meals out of one purchase. I bought a roasted chicken for $5 and got like 4 meals out of it.

Gas is cheaper despite recent tax increases in NJ. Property tax growth has slowed down due to a cap but still go up every year. Can be appealed if your assessed value is higher than what you paid/market value of comparables. Probably not an option in hot real estate markets. Cheaper to buy than rent. Rents are high and you're at the mercy of the market and a landlord.

Everyone's situation and region are different.

[lchoro]

Originally Posted by Quietude

Nothing is being falsified, not as such...

You don't know anything the actual details of the CPI survey and how it's constructed. Why make a blanket statement about it? It has nothing to do with this administration, although they would inclined to do more doctoring of data and do so openly.

They are still moving goods and services in large quantities. Companies and industries report the sales of goods and services because they are in the business of managing inventory. There are specific datasets in the CPI which substitute artificial polls when there are publicly available surveys. The criticism is based on the results being uniformly lower than that experienced in the real-world surveys.

[Quietude]

Originally Posted by lchoro

You don't know anything the actual details of the CPI survey and how it's constructed. Why make a blanket statement about it?

But you're qualified to. Got it.

[sll3454]

Originally Posted by john620

No but you can eat the savings of once big ticket items like TVs, Ipads and non apple laptops and use it to pay for slightly higher food costs. Or of course you can use cheaper substitute foods to replace higher price food items and not have an impact on your food spending.

If you buy such things to begin with.

[Quietude]

Originally Posted by sll3454

If you buy such things to begin with.

Nobody buys that "food" stuff except for, you know, morons.

(Yes, equating savings on luxury/discretionary items with a rise in real earning power is pretty stupid.)

[Mircea]

Originally Posted by k374

I rent, just got my rent increase which is annual and it's 6% (Los Angeles area). Everywhere around I see prices rising more like 4-5%. Inflation is more like 5% going by anecdotal evidence. Yet, the government insists inflation is under 2% and now they are going to CUT interest rates, madness.

Here's an opportunity for you to learn something, so that at least you appear to be educated.

There are several forms of Inflation. Each form of Inflation has its own unique cause and so it also has its own unique solution.

Wage Inflation is caused by rapidly rising wages in certain limited sectors of the economy.

It's happened twice in US history, once in the late 1930s and again in the late 1960s. It is not possible for the US to ever experience Wage Inflation again without a world war requiring the Draft and at least 15 Million would need to be drafted, or the introduction of new technology for which there are no transferable skills. Sorry, AI, machine language and automation do not qualify.

Both FDR and Nixon stupidly levied a Wage & Price Freeze, when the correct course of action was simply a Price Freeze.

You're still paying for FDR's grotesque error in judgment.

If you haven't figured it out, the Federal Reserve is powerless to do anything about Wage Inflation.

The second form of Inflation is Cost-push Inflation. You are the cause.

You elected the people who raise taxes and enact laws, rules, regulations and ordinances affecting the prices of goods and services.

So, you vote for property tax increases, then get mad when your rent goes up. Well, of course your rent went up. You just voted for a property tax increase.

Note that the Federal Reserve is powerless here, too.

The third form of Inflation is Demand-pull Inflation. You are the cause.

You are consuming in excess of the available Supply.

You have two choices:

1) stop consuming. That will prevent Supply from being depleted; or
2) increase Supply to match current Demand.

While increasing Supply to match Demand sounds easy, it really isn't.

Sometimes it's impossible to increase Supply. That's often the case with housing. Many areas are saturated and the only possible way to increase Supply is to purchase multiple properties, displace half a dozen to a dozen families, and then build multi-story multi-family housing.

Even when it's possible, it often isn't feasible.

The multi-family housing I mentioned, well, you're going to have to use your money, plus borrow money from a bank and maybe get money from investors. You would have to charge a rent that allows you to repay the loan, repay your investors, recoup the money you spent, cover the property taxes and insurance, plus the cost of maintenance, and the cost of a property management company, plus give you a profit.

If you cannot rent the apartments for that amount, then you cannot build it.

Sometimes you have to wait until prices rise high enough before you can increase Supply.

You could buy a farm and produce corn to increase the Supply, but unless you can make a profit, you won't be successful. The bank will foreclose on you, so you need to wait until corn prices increase $1-$2/bushel so that when you start farming, you can make a profit and survive.

As you can see, the Federal Reserve is not the cause and is powerless to do anything, except to say that lower interest rates can make it easier to borrow money in order to engage in an enterprise that allows you to increase Supply.

Finally, there's Monetary Inflation. Too many Dollars chasing too few goods and services.

Congress can increase taxes and/or cut spending and the Federal Reserve can increase rates and/or reduce the money supply or any combination of that.

Your rate of Monetary Inflation has been less than 0.5% for the last 20-odd years.

Unfortunately, when your government publishes inflation data, it makes no attempt whatsoever to distinguish between the various types of Inflation. It just aggregates them all together.

That's a problem.

In the early 1950s, the Federal Reserve caused a recession with their stupidity.

Yes, Inflation was about 10%, but it was 9% Demand-pull Inflation and 1% Monetary Inflation. The Federal Reserve made no attempt to differentiate and stupidly levied a series of rate hikes "to combat Inflation" which caused a recession.

The morons at the Federal Reserve didn't understand that Americans -- meaning households and businesses --- were in a total panic, because when the Korean War started in 1950 they believed the government would start rationing again.

You have to understand that rationing had just ended four years earlier in 1946 so it was fresh on people's minds, and they didn't want to do without again.

This fear and panic by Americans -- households and businesses -- led them to start buying and hoarding anything and everything they could in anticipation of government rationing. The government never did, but this fear and panic is what caused the Demand-pull Inflation.

Anyway, whatever Inflation you're experiencing is 100% your fault, because it's all Cost-push and Demand-pull Inflation, so stop blaming government for your actions.

[lchoro]

Originally Posted by Quietude

But you're qualified to. Got it.

Much more qualified than you. At least, I've worked with economic numbers in real life and have studied the issue in the past 25 years. At least, bring something to a discussion other than empty rhetoric which can't be substantiated by facts.

[mathjak107]

Originally Posted by Mircea

Here's an opportunity for you to learn something, so that at least you appear to be educated.

There are several forms of Inflation. Each form of Inflation has its own unique cause and so it also has its own unique solution.

Wage Inflation is caused by rapidly rising wages in certain limited sectors of the economy.

It's happened twice in US history, once in the late 1930s and again in the late 1960s. It is not possible for the US to ever experience Wage Inflation again without a world war requiring the Draft and at least 15 Million would need to be drafted, or the introduction of new technology for which there are no transferable skills. Sorry, AI, machine language and automation do not qualify.

Both FDR and Nixon stupidly levied a Wage & Price Freeze, when the correct course of action was simply a Price Freeze.

You're still paying for FDR's grotesque error in judgment.

If you haven't figured it out, the Federal Reserve is powerless to do anything about Wage Inflation.

The second form of Inflation is Cost-push Inflation. You are the cause.

You elected the people who raise taxes and enact laws, rules, regulations and ordinances affecting the prices of goods and services.

So, you vote for property tax increases, then get mad when your rent goes up. Well, of course your rent went up. You just voted for a property tax increase.

Note that the Federal Reserve is powerless here, too.

The third form of Inflation is Demand-pull Inflation. You are the cause.

You are consuming in excess of the available Supply.

You have two choices:

1) stop consuming. That will prevent Supply from being depleted; or
2) increase Supply to match current Demand.

While increasing Supply to match Demand sounds easy, it really isn't.

Sometimes it's impossible to increase Supply. That's often the case with housing. Many areas are saturated and the only possible way to increase Supply is to purchase multiple properties, displace half a dozen to a dozen families, and then build multi-story multi-family housing.

Even when it's possible, it often isn't feasible.

The multi-family housing I mentioned, well, you're going to have to use your money, plus borrow money from a bank and maybe get money from investors. You would have to charge a rent that allows you to repay the loan, repay your investors, recoup the money you spent, cover the property taxes and insurance, plus the cost of maintenance, and the cost of a property management company, plus give you a profit.

If you cannot rent the apartments for that amount, then you cannot build it.

Sometimes you have to wait until prices rise high enough before you can increase Supply.

You could buy a farm and produce corn to increase the Supply, but unless you can make a profit, you won't be successful. The bank will foreclose on you, so you need to wait until corn prices increase $1-$2/bushel so that when you start farming, you can make a profit and survive.

As you can see, the Federal Reserve is not the cause and is powerless to do anything, except to say that lower interest rates can make it easier to borrow money in order to engage in an enterprise that allows you to increase Supply.

Finally, there's Monetary Inflation. Too many Dollars chasing too few goods and services.

Congress can increase taxes and/or cut spending and the Federal Reserve can increase rates and/or reduce the money supply or any combination of that.

Your rate of Monetary Inflation has been less than 0.5% for the last 20-odd years.

Unfortunately, when your government publishes inflation data, it makes no attempt whatsoever to distinguish between the various types of Inflation. It just aggregates them all together.

That's a problem.

In the early 1950s, the Federal Reserve caused a recession with their stupidity.

Yes, Inflation was about 10%, but it was 9% Demand-pull Inflation and 1% Monetary Inflation. The Federal Reserve made no attempt to differentiate and stupidly levied a series of rate hikes "to combat Inflation" which caused a recession.

The morons at the Federal Reserve didn't understand that Americans -- meaning households and businesses --- were in a total panic, because when the Korean War started in 1950 they believed the government would start rationing again.

You have to understand that rationing had just ended four years earlier in 1946 so it was fresh on people's minds, and they didn't want to do without again.

This fear and panic by Americans -- households and businesses -- led them to start buying and hoarding anything and everything they could in anticipation of government rationing. The government never did, but this fear and panic is what caused the Demand-pull Inflation.

Anyway, whatever Inflation you're experiencing is 100% your fault, because it's all Cost-push and Demand-pull Inflation, so stop blaming government for your actions.

As always your posts make a lot of sense...i have adopted some of your views from your posts.

I make it a point to steal the thoughts and ideas of those a lot smarter then I am in many areas so you are one of my go to people for my views in this area

[mathjak107]

Originally Posted by lchoro

Much more qualified than you. At least, I've worked with economic numbers in real life and have studied the issue in the past 25 years. At least, bring something to a discussion other than empty rhetoric which can't be substantiated by facts.

We never let data and facts get in the way of good stories here

[lchoro]

Originally Posted by Quietude

But you're qualified to. Got it.

Much more qualified than you. At least, I've worked with economic numbers in real life and have studied the issue in the past 25 years. At least, bring something to a discussion other than empty rhetoric which can't be substantiated by facts.

Originally Posted by john620

No but you can eat the savings of once big ticket items like TVs, Ipads and non apple laptops and use it to pay for slightly higher food costs. Or of course you can use cheaper substitute foods to replace higher price food items and not have an impact on your food spending.

Instead of reaping savings, the new tech products have to be replaced more often due to incompatibilities. Forced obsolescence and shorter life cycles are more common now. During the days of the previous tech bubble, cell phones were being replaced every 6 months as people constantly switched service providers. Now there are fewer competitors.

Usually, substitutes to reduce cost are for a lesser quality good, such as a cheaper cut of steak or chicken instead of beef. It is one of the many things missed in the quality adjustment technique used in the CPI.