Despite high inflation, Americans are spending like crazy – and it's puzzling | Hacker News Reader

Despite high inflation, Americans are spending like crazy – and it's puzzling

npr.org

29 pointspaulpauper8 comments

Puzzling? Spending money on physical items because cash is losing value.

What is so surprising about this?

You got it exactly. When your government increases your money supply by 40% price pressure is eventually going up (albeit not linearly, and with a short delay).

Add to this the tendency of all currencies to lose value over time, and it's a wonder people don't actively try to hold as little cash as is feasible.

That and the risk that trade with some countries may be at risk. I've been stocking up on things made in China as it will take time to ramp up manufacturing in Mexico, or at least I've heard that was the plan.

I mean, the answer is in the data itself. All the nonsensical moralizing in the comments and the article are pointless when the data shows that even as personal spending rose by 1.1% in 2012 dollars, personal disposable income increased by 1.4% in 2012 dollars over the same period.

Simple. https://fred.stlouisfed.org/series/FGEXPND

Government spending are money borrowed/printed and injected into economy. Public service, contractors, military, health care get this money and spend it, circulating it further. FED can jack up the interest rates as high as they want, but it only exacerbates the problem as the government needs to pay more in interest, while the real economy is slowing and tax revenues are falling, basically killing the real economy while still maintaining the real reason for inflation: the government.

What's happening with the financial system is an end game. Anyone that can think for themselves, and understand how debt really works should clearly see that it's all imminently unsustainable. As the boomers retire turning from financial asset buyers into sellers, all over developed world, the financial system is going to deleverage which means very high inflation or deflationary crash (or a combination of both which some would call "beautiful deleveraging" except there's nothing beautiful about it).

This is why it's so hard for the fed to achieve the proverbial soft landing when trying to fight inflation.

Things are in reverse, inflation is high because there is an excess of demand over supply of stuff.

Recent "inflation" has slowly become accepted as majority-driven by corporate greed (i.e. raising prices BECAUSE THEY CAN), not because of supply limitations, overall.

I think an additional and FAR SCARIER REASON FOR EXCESS SPENDING is because people are just accepting that they DGAF, and living/buying accordingly (i.e. minimal long-term planning).

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