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Inflation surges to its highest since 1990

62 points| kull | 4 years ago |npr.org | reply

51 comments

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[+] jstx1|4 years ago|reply
It's helpful to have a look at the graph in the article and to remind yourself that the numbers are reported year-on-year. Inflation spiked up in the first half of 2021 and the comparison is between the current month and the same month last year so prices could stay the same and you would still report high inflation for a while (until the back end of the comparison window catches up to the moment in time when inflation went up).

I think it's important to clear this up because people say things like "high inflation of over 5-6% for months now" which is kind of misleading. Prices can go up 6% just once and then stay the same and you'll still report 6% inflation every month throughout the following year.

This isn't to say that things are great and high inflation isn't happening. The month-to-month increase is 0.9% which is very high (see the graph).

[+] pfortuny|4 years ago|reply
Totally right in your assessment.

But notice that, following your indication, monthly increase is a steady >0.2% and mostly >0.4% since May 2020, way above average.

So, yes: high inflation has been going on for at least a year.

[+] jacquesm|4 years ago|reply
Also note that due to the compound nature of inflation 2% or 4% is an entirely different ball game in the longer term.
[+] foota|4 years ago|reply
Were bad things happening in 1990? Iirc it was the start of one of the most prosperous periods in recent American history.
[+] piva00|4 years ago|reply
USSR disintegrating after 91 and the opening up of markets around the world from the wave of neoliberalism helped a fucking lot, movements such as Latin America slowly dropping its market-protection practices, former Soviet states adopting free market ideologies and so on created quite a high demand, it was the start of globalisation as we are used to nowadays.

Most of the most prosperous periods in American history are following large shifts in the world order, WW1 and 2, collapse of the USSR, starting the Age of Information, etc.

[+] m4rtink|4 years ago|reply
Soviet block and its client states disintegrating.
[+] vbg|4 years ago|reply
Inflation is complete bullshit because it’s careful to measure a subset of prices and exclude a large range of other prices.

Meaningless crap, designed to support government narrative that everything is great, nothing to see here.

To have any credibility at all, inflation MUST include rent/mortgage payments and house prices.

[+] skohan|4 years ago|reply
If that's true, wouldn't it be a warning sign if this metric purpose-built for making the government look good started going downhill?
[+] planb|4 years ago|reply
True. But as those are very dependent on where you live, does it even make sense to report inflation for the whole country?
[+] ur-whale|4 years ago|reply
Inflation is boiled frog style taxation.

Unfortunately, it's taxation that makes the weakest suffer the most.

Oh, and the govt would like you to believe they have a way to control it.

Yeah sure, I'm going to turn that knob that is one input of a perfectly chaotic system, and I know what is going to happen.

Let's see how that empty promise actually turns out.

[+] pa7x1|4 years ago|reply
Inflation does not affect (relatively speaking) the poorest more. On the contrary, it's a tax on people that have a lot of cash or cash-equivalent assets. That's not the poor. The poor have either very little cash or even negative (via debt), so inflation benefits them.

And you can see this historically, too:

Historical inflation rate chart: http://www.aboutinflation.com/_/rsrc/1369736825466/inflation...

Wealth gap inequality: https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2F...

You can literally see how the wealth gap inequality nose dives in the high-inflation environment of the 70s and then continually increases after low-inflation rates become the norm for decades after around 1982.

Inflation is a tax, should be seen as such but is a tax on the rich in cash (I keep insisting on the term cash because that's what inflation taxes, if you are rich in other assets inflation may or may not result in an effective taxation of your wealth). Monetary and fiscal policy should be designed with this in mind.

[+] neximo64|4 years ago|reply
And also in a way the opposite.

If there was a scale of value in terms of being between the borrower (people in debt) and people lending (people with cash). It swings heavily in favour of people in debt.

[+] jstx1|4 years ago|reply
Taxation is deliberate and easily measured. Inflation is much more difficult to measure and it results from many parts of a complex system interacting with each other. The only thing in common is that people end up with less money.