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Comment by jfengel | Hacker News Reader

I'm surprised they're surprised. Inflation makes people want to buy things before they get more expensive. Even if inflation cools prices will never be this low, and savings will be worth less tomorrow than today.

Seems like reasonable behavior to me.

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This effect was observed in Weimar Germany also, during absolutely insane inflationary times. History books tell the tale as though people rationally bought things because they held value more than cash, but now having lived through this relatively smaller inflationary era, I wonder if there's more to it, and it's a more subconscious thing.

Inflation has come down, and rates have come up. As a result, real rates are higher than they've been for more than a decade.

So, now it makes more sense, economically, to delay consumption, than in a long time.

https://fred.stlouisfed.org/series/REAINTRATREARAT1MO

https://fred.stlouisfed.org/series/REAINTRATREARAT10Y

It seems reasonable iff you have money sitting around.

If you're buying at 22%APR, it makes a lot less sense. Every "saving" you make will be realised on you several times over.

Are we in the ‘it’s time to start worrying’ phase? When you think about this more and more often, which I personally am, what types of discussions should we start having?

We are not in any particularly worrisome period. The reason you are thinking more often about this is that we're in a "vibecession" where the media are all being unusually negative about everything.

This is causing historically strange results in financial surveys right now where everyone says they personally are doing fine but that they also think the economy is bad because they heard they were supposed to think that.

I'm not doing well economically, and there is nothing for me to find upward mobility with yet. West coast, progressive region too.

Where are the jobs?

What kind of jobs are you looking for? The unemployment rate is fairly high so there are of course fewer jobs overall compared to the number of applicants.

If you ask the consumer finance media, it’s always time to start worrying. Worrying sells and breeds more worry.

I’m not being dismissive of the odd situation we are living through, but I’ve not found the worry level of other people to be that helpful a guide. Those preppers with bugout bags are still waiting to be proven right.

I dont think so. I've been hearing that it's a time to worry for over 20 years, thru three major once in a lifetime events. If none of those were a time to worry, I dont see why this is.

Sounds like survivorship bias.

All those events had an impact on someone. They destroyed many lives and set back countless others.

It can happen to you, unless you continue your lucky streak or your continued survival was/is due to wealth.

I mean, maybe?

If the weatherman is consistently wrong, is it me who is experiencing different weather wrong, or the guy who made the prediction in the first place?

"Huh? What flooding?" asks the man comfortably lounging on a yacht, as millions of regular folks get swept away by the rushing water.

I've been the guy swept away, repeatedly.

In the end the next time the billionaires blow the thing up, they'll get a bailout and I'll get a haircut, so I might as well get my slice of the pie now.

For all the crowing, the implosion from consumer debt has never come, I suspect part of why debt keeps rising is harder to obtain bankruptcy.

I think that logic is usually applied to deflation and why it is so insidious (wait to spend and tomorrow will be even cheaper, grinding economy to a halt).

The inverse for inflation seems possible, but somewhat flawed because you will need even more money in general in the future, so hoarding cash to grow it could also be an impulse.

I feel like Keegan’s baby sitting coop has some parallels to the “unexpected” outcomes from human responses to market forces

The krugman coop story: https://slate.com/business/1998/08/baby-sitting-the-economy....

I've never had the thought "let me spend a bunch of money on disposable things because it'll be more expensive a year from now"

I don't think that's how most people think about their purchasing decisions at all.

I think people definitely do exhibit this behavior. It’s part of what causes FOMO.

They also exhibit the opposite - waiting to buy things that they think will go on sale later.

Really? Because that's how I think and have been thinking since the money printer got cranked up in 2020.

The US money supply has been getting smaller pretty much all of this year.

https://fred.stlouisfed.org/series/M2SL

So you spend excessively on clothes and eating out and traveling because it’s going to get more expensive next year, despite now getting paid 4-5% for cash when that hasn’t been true for almost 20+ years?

I can understand this about an appreciating asset like a house, not buying clothes and trinkets.

I took out some loans in 2020-2022 to buy a car, go on vacation, buy some synthesizers, gamble on crypto. I figured loan rates would go up so get them while the money was cheap.

While neither of us can extrapolate behavior of “most people”, I and a lot of my middle class peers definitely this exact thought and acted on it.

Feel free to going into detail about what exactly this applies to.

I’m not talking about buying a house that is considered an appreciating asset. I mean going to dinner and buying clothes and other disposable goods/services.

I have had the thought that I should buy 'luxuries' that I've been saving for, before they get unaffordable again, even if it makes things a little tighter than I'd like in the near term.

disposable things? why do you think that's what people are buying?

so YOLO spending isn’t talking about clothes and traveling and eating and going out? what is it then if it’s not that?

Yeah, you haven't lived through actual inflation. In Argentina we're used to "buy it now because it will be more expensive next month". My laptop is more expensive used on mercadolibre than what I paid for it brand new 5 years ago.

In the US they have 5% inflation rather than 200% but the effect is still true, just less strong.

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