From my understanding, the metrics used to calculate the CPI have been changed over the course of the last 4 decades. I know I saw inflation on 01/20/2021 was reported to be 1.4% and is now 7.9%, but what is the real rate of inflation? Regular gas was $1.99 on 11/03/2020 it’s like $4.64. If I sold my home today the number would be minimum (sell it in 20 minutes) price 30% higher than what it was at the end of the Trump admin. Tracking prices, I see the Vortex Razor Gen iii went from a street price of like $1850-2000 to $2500-2600 and I see the MAWL C1+ went from like $2700 to $3600, these are of course 2 examples. Ammo prices are still up around 60% from pre Covid prices. New car prices going for market adjusted pricesabove MSRP when you used to be able to negotiate a lower price. Groceries are more expensive (harder to quantify, but I’m absolutely paying more).
So my question is, does anyone have any insight on the true rate of inflation at this point? Politics aside, I really don’t think this is sustainable for very long.
What’s funny is those asshats think they’re heroes by offering up these subsidies. Those subsidies were already our money to begin with, so they think they are heroes by deciding to give back a fraction of it? They got balls for sure. F them.
Inflation is a purely monetary effect that is driven by the amount and velocity of money in the economy. It drives the price of all goods, like a rising tide raises all boats. The supply and demand of individual products can drive their prices up, and down, but that is not inflation in the true sense of the word since it is transitory until the market reaches a new equilibrium. So looking at groceries would be a good one, if you look at the whole basket of what you spend per month rather than just individual items.
Now left the economist will say that we’ve been deficit spending and pumping money into the economy for decades, but especially since the great financial crisis. But the difference is and I think the proof of my theory is that that money stayed in the high end of the economy. It stayed with banks and corporations, and the people that make their money off of that. That’s why you saw all kinds of new billionaires and tech money, that fed billionaire lifestyles, but we didn’t see inflation at the more normal levels. Even with the great financial crisis, the prices for mountain homes here in Colorado and the demand for them never dipped. That’s because we are shoving money at those upper hundreds of a percentile people. This time with Covid they dump money in the economy again, but more of it leaked out into the lower income levels, and that’s why you’re seeing more general inflation.
When the recession hits, there most likely will be a deflationary period like in 2008. Demand will go down on most everything because people either won’t want to buy certain things or just plain can’t due to affording necessities. Unfortunately the prices of necessities more than likely won’t go down because demand stays the same. It is already starting to happen in the housing market. Why do you think all those billionaires have cashed out and holding boatloads of cash? They are waiting for the bargains to be had soon. The rich get richer - wash…rinse…repeat.
I don’t have any numbers, but it certainly feels huuuuge. Fuel has doubled, food has doubled, ammo has doubled, my home value has doubled in the past few years. I’ll have to double-check, but I think my tax burden has doubled as well. Noone would confuse me with an economist, but I saw this coming in spring of ‘20. A broken watch is occasionally right.
I have no idea how fixed income dudes are getting by, and consider myself fortunate.