Or just a basic understanding of monetary economics... the Fed's actions aren't an exogenous variable, they were taken precisely because of deflationary expectations in the market.
They see the big scary market, they don't understand it, and are trying to re-invent it from first principals. As such they're just speedrunning the history of finance, and quickly finding themselves exactly where they started.
They are the anti-vaxxers of finance.
The parallel I was drawing was that anti-vaxxers don't understand vaccines and have gotten it into their heads that they are bad. The same is true of a lot of the arguments that bitcoin maximalists make, about inflation, about the central bank, about fiscal and monetary policy, about how their magic beans can save the Venezuelans.
In current popular fashion everything is political.
But also, anti-vaxx is an obviously denigrating term that’s part of the whole liberal orthodoxy. You’re drawing very broad characterizations between disparate topics.
Even the vocabulary you use is odd and one-sided. Should I call you a credit expansion maximalist?
[1] https://www.investopedia.com/terms/b/bitcoin-maximalism.asp
I keep trying to tell him that if he'd tell me tomorrow's lottery numbers we'd be much better off but alas I think he's a lost cause.
By the time you see a thread on Bitcoin going up 10% this week, you have failed to secure a position.
I've made some decent cash by shifting some money into Bitcoin on a Monday and cashing out my positions by Friday during these rallies to the tune of 30-70% profits but it's not for the faint of heart.
All of this is gambling, not some rational modeling of how the bitcoin price will move.
I'm glad that it has worked out for you.
Bitcoin's price is irrelevant if you're planning on using it as a deflation countering method but if you're looking at pricing, you're basically gambling on you not being the bigger fool.
How does bitcoin function as a "deflation countering method"?
Whether it's a pizza that later on is worth billions, or a car or something else. Your bitcoin is worth something, and is just another method of payment.
Wouldn't that make it a hedge against inflation?
Many people in this thread on the wrong side of the Dunning-Kruger curve.
I bought my first AAPL stock at ~$40 a share the first time, which I believe was about a year before their previous stock split. If I'd held it continuously I'd have 8x as many shares and a basis of $5 a share, which would mean I'd have 25x as much money as I started with.
But my portfolio would be unbalanced as hell, and I would have missed out on a lot of run-ups for WWDC and such. So I sold some, did profit taking on the rest, and occasionally bought back in, not always at the best times. So instead I have about 5x as many shares, and my basis is more like $45 a share, but now with some dividends on top, which is nice. If anything, my portfolio still has too much AAPL in it (I sold about 10% a few weeks ago)
This crowd in particular has plenty more examples than economy and immunology. We never learn.
"...people who forgot to attend ECON-101."
The real problem is people that think the neokeynsian and econometrics nonsense they learned at school is valid in the real world. Easy to detect members of that crowd, they are generally clueless about scarcity value, bitcoin/hard-money and will inevitably end up poorer than the less ignorant.
You don't even have to be a neo-keynesian, you really just have to recognize that not all price changes are "secret inflation." The markets (ie. the "real world") tend to agree with me [0].
Anybody buying the 2% inflation number doesn't recognize the actual 15-20% hurdle they have to jump over every (non-covid) year and will inevitably get poorer unless they are directly tied to a "cantillon channel"... in which case they will only stay rich thanks to what amounts to fraud.
More accurate inflation calculation - https://chapwoodindex.com
You have absolutely no evidence to support this.
The only reason the cost of living goes up in the major metros listed there is because housing went up there, and that's not inflation or the cantillon effect (which I concede exists but is nowhere near as big as you make it out to be) -- that's because city councils aren't permitting new construction.
Your comment is a manifestation of proportionality bias. You think a big change in the affordability of housing in SF has to have a big cause like the global economy string pulling illuminati cantillon magic. The reality is far more banal. It's straight-up simple supply and demand. Strong economy in and around SF creates demand for living in SF. The city council doesn't permit new construction. This limits supply. Low supply, high demand, big prices - which the well paid tech workers can afford. That's it and that's all man.
Naturally when demand fell as a result of the pandemic prices went with it.
Chapwood "Index" is produced by the same person behind many of the conspiracy theories around Seth Rich's murder [0], not really a brilliant objective source of inflation metrics. I'm not claiming the CPI is perfect, but taking a look at market expectations of inflation also gives you a pretty good picture of what is going on, and it's not a 4 year doubling of prices.
Do I think those who stay wealthy in real terms are able to do so via "what amounts to fraud?" No. Nor do I buy your 15-20% hurdle assertion: if your annual salary of say $100,000 was worth just 10% less each year (as in, real inflation of 15% minus 5% worth of nominal income growth, a generous income growth assumption) $100,000, over just five years, it would be worth the equivalent of ~$60,000 in year 0. It seems like a stretch to suggest that everybody but the rich are seeing their real incomes almost sliced in half every five years. Use the 20% number or a more conservative assumption for income growth and the numbers start to square even less with reality.
Asset price inflation is such a weird metric to rail on because that's the whole point of investing. Literally the point of assets is they go up in price over time. If you bought AAPL at $50 and it hits $300 is that "asset price inflation"? No! It's a good return on investment.
There's no personal need for affordable AAPL stock is there? Are you going to die if you can't afford AAPL? Of course not.
You know what's gone down though? Housing. Which, by the way, costs exactly the same amount now on an inflation adjusted dollars per square foot basis as it did in the 1970s across the whole of the United States according to the BLS. [1] Certain major metros are of course higher but that's simply because the city councils stopped permitting new construction to benefit existing landowners while demand increased due to the booming economy in and around these metros.
Inflation is literally defined as CPI and it factors in the necessities of life. AAPL stock is not a necessity. It doesn't matter how far up it goes if bread costs the same.
Wanna stop the inequality it leads to? Bring in a wealth tax.
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
The anti-vaxxers of Finance have been pretty lucky so far. Much more than actual anti-vaxxers.
Sounds like your analogy is off.
Is there any danger of a K-shaped recovery in which the fed is forced to accept massive inflation in parts of the economy in order to prevent deflation in others?
Has the wealth gap and ensuing social unrest caused by this bifurcated inflation historically caused nations to fall?
Inflation is an increase in prices as money becomes worth less. "Differing rates of inflation/deflation" are just the price system at work.
Since during Covid, velocity decreased, inflation dropped substantially, which required an increase in base in order to prop back up inflation.
> Has the wealth gap and ensuing social unrest caused by this bifurcated inflation historically caused nations to fall?
The wealth gap is not caused by "bifurcated inflation." It is caused by rapidly rising equity prices, among other things, but that is not the same thing as inflation.
Suppose that for every dollar the fed prints, 95 cents ends up in equities and 5 cents ends up in PCE. We can argue about what to call it but that doesn't change the outcome.