inflation

[dismalist]

Package sizes are shrinking too:
https://wtop.com/asia/2022/06/no-youre-not-going-crazy-package-sizes-are-shrinking/
Posted on WTOP online 6/8/22

Not too, hmaraia. This is inflation being disguised. No woik after we pick up the trick. And we pick it up pretty fast.

[Hibush]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

[dismalist]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

No, buying less alone does not whip inflation. The extra savings would have to be held in the form of money to fight inflation. Buying extra financial or real assets with the extra savings doesn't help, either: The money would just go to somebody else. But of course the extra savings held as money loses value at the rate of inflation, so nobody does it. :-)

[jimbogumbo]

My measure of how inflation affects the "normal" citizen is the menu at my favorite (sue me) fast food breakfast location. A Sausage McMuffin (no egg) has been on the dollar menu for years at, well, $1.00. Price after early this year is $1.59.

No change in ingredients or size. One English muffin, one sausage patty, one slice of American processed cheese-like food.

[dismalist]

My measure of how inflation affects the "normal" citizen is the menu at my favorite (sue me) fast food breakfast location. A Sausage McMuffin (no egg) has been on the dollar menu for years at, well, $1.00. Price after early this year is $1.59.

No change in ingredients or size. One English muffin, one sausage patty, one slice of American processed cheese-like food.

The classic error of confusing a change in the overall price level with a change in relative prices! :-)

Subtract the overall inflation rate from the McDonald's price rise rate, and get the relative change in McDonald's price.

Of course everyone's overall inflation rate is different from the headline CPI series. 'Ya gotta reweight all price changes with your personal consumption expenditures.

[apl68]

The thing is, a number of things that average people buy on a very regular basis have seen conspicuous price rises.  Things like gas--which most people have to buy regularly--and familiar fast-food specials, and some common foodstuffs at grocery stores.  Dramatic increases in conspicuous items that many people find it hard to do without creates a perception that inflation is far higher than the carefully-calculated official rate.  It's hard to convince people that the true average rate of inflation is "only" 8% or so when people see multiple items that they buy regularly going up by far more than that.

And, again, food and fuel prices, especially food, are going up so fast in many of the world's poorer countries that there's a real threat of hunger.

[Juvenal]

I saw that my portfolio went up by $33 yesterday.  I laugh at inflation!  A rather hollow laugh, however.

[pgher]

The thing is, a number of things that average people buy on a very regular basis have seen conspicuous price rises.  Things like gas--which most people have to buy regularly--and familiar fast-food specials, and some common foodstuffs at grocery stores.  Dramatic increases in conspicuous items that many people find it hard to do without creates a perception that inflation is far higher than the carefully-calculated official rate.  It's hard to convince people that the true average rate of inflation is "only" 8% or so when people see multiple items that they buy regularly going up by far more than that.

And, again, food and fuel prices, especially food, are going up so fast in many of the world's poorer countries that there's a real threat of hunger.

Also, the things that change price quickly are the things that we can actually control what we spend. My electric, water, mortgage, whatever--those are all fixed costs, essentially, meaning I pay whatever the bill says. I can decide how much I spend on groceries, or rather, how much I eat based on what I'm willing and able to spend.

[dismalist]

The thing is, a number of things that average people buy on a very regular basis have seen conspicuous price rises.  Things like gas--which most people have to buy regularly--and familiar fast-food specials, and some common foodstuffs at grocery stores.  Dramatic increases in conspicuous items that many people find it hard to do without creates a perception that inflation is far higher than the carefully-calculated official rate.  It's hard to convince people that the true average rate of inflation is "only" 8% or so when people see multiple items that they buy regularly going up by far more than that.

And, again, food and fuel prices, especially food, are going up so fast in many of the world's poorer countries that there's a real threat of hunger.

Also, the things that change price quickly are the things that we can actually control what we spend. My electric, water, mortgage, whatever--those are all fixed costs, essentially, meaning I pay whatever the bill says. I can decide how much I spend on groceries, or rather, how much I eat based on what I'm willing and able to spend.

The guys who make the indices try to handle that with calculating "core" inflation, i.e. Consumer Price Index excluding food and energy, on the rationale that these prices are volatile, à la Pgher. [I'm in at least two minds about this, likely more.] At the moment the "core" inflation rate is just a tad below the whole inflation rate.

What is surely making our observations different from the published Consumer Price Index is that the CPI is precise for a consumer unit [family, household, individual] with mean income. Consumption structure changes with income, and mean income is pretty high. E.g., mean family income in 2021 was $80, 000. Wish they calculated for consumer units with median income.

Again, the concept for each individual is straightforward: Take all price changes and weight them by one's own dollar consumption structure last year. That is an overstatement of the increase in the cost of living. Do the weighting with this year's dollar consumption structure. That is an understatement. All on account substitution is assumed away in both cases.

Get both measures for oneself. Take the geometric mean. That's close to the true change in the cost of living for oneself. :-)

I don't do the calculations for myself. I just intuit or feel that my cost of living has not gone up quite as much as the CPI. I never drove much, e.g., so the rise in gasoline prices doesn't affect me much. If one has to drive a lot, one is hurt more.

[lightning]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

During the Great Recession, I made a car purchase. Some people saw my purchase as something that would stimulate the economy, if more people made purchases like I did.

I went huh? Economic citizenship? I got a great deal because cars weren't selling because no one seemed to have any money to spend, and the salesperson was willing to cut me a good deal. And, that's why I bought that car during the Great Recession. I still have that car, today, and it still runs great with no signs of end-of-life. <knock on wood>

And today, I will drive my great car, until a car salesman cuts me a reasonable deal on a new one. No takers? Fvck 'em.

[dismalist]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

During the Great Recession, I made a car purchase. Some people saw my purchase as something that would stimulate the economy, if more people made purchases like I did.

I went huh? Economic citizenship? I got a great deal because cars weren't selling because no one seemed to have any money to spend, and the salesperson was willing to cut me a good deal. And, that's why I bought that car during the Great Recession. I still have that car, today, and it still runs great with no signs of end-of-life. <knock on wood>

And today, I will drive my great car, until a car salesman cuts me a reasonable deal on a new one. No takers? Fvck 'em.

This is how a bazaar works. Wonderful! But it has nothing to do with inflation.

[lightning]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

During the Great Recession, I made a car purchase. Some people saw my purchase as something that would stimulate the economy, if more people made purchases like I did.

I went huh? Economic citizenship? I got a great deal because cars weren't selling because no one seemed to have any money to spend, and the salesperson was willing to cut me a good deal. And, that's why I bought that car during the Great Recession. I still have that car, today, and it still runs great with no signs of end-of-life. <knock on wood>

And today, I will drive my great car, until a car salesman cuts me a reasonable deal on a new one. No takers? Fvck 'em.

This is how a bazaar works. Wonderful! But it has nothing to do with inflation.

I never said my actions had anything to do with inflation. If anything, my posts (and other posters' posts) show that "inflation" doesn't have to be an all-comsuming issue for the individual consumer. Consumers are not powerless, regardless of "the economy."

[dismalist]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

You are doing your part to Whip Inflation Now. No need to feel spite, just civic pride.

During the Great Recession, I made a car purchase. Some people saw my purchase as something that would stimulate the economy, if more people made purchases like I did.

I went huh? Economic citizenship? I got a great deal because cars weren't selling because no one seemed to have any money to spend, and the salesperson was willing to cut me a good deal. And, that's why I bought that car during the Great Recession. I still have that car, today, and it still runs great with no signs of end-of-life. <knock on wood>

And today, I will drive my great car, until a car salesman cuts me a reasonable deal on a new one. No takers? Fvck 'em.

This is how a bazaar works. Wonderful! But it has nothing to do with inflation.

I never said my actions had anything to do with inflation. If anything, my posts (and other posters' posts) show that "inflation" doesn't have to be an all-consuming issue for the individual consumer. Consumers are not powerless, regardless of "the economy."

If inflation -- an increase in the average price level --  is expected, there are indeed no worries -- all prices and wages change at the same rate, and no one is worse off, past long term contracts aside, but they too will adjust. Alas, real world inflations are punctuated by attempts to stop them with monetary policy and government spending desires to accelerate them. This chaos -- unexpected inflation -- makes life difficult for all of us. Like right now. Especially if  attempts to stop it consist of idiocy such as price controls. Which we have, little noticed.

When it's a question of changing relative prices, you are absolutely correct.  Takeout pizza is more expensive, I make my own. Gas price too high? I take the bus.

I totally agree about the economy: "The economy" is a not always useful definition. The real economy is us.

Cheers. :-)

[kaysixteen]

Again, I want to come back to my original point-- I get that there would be some negative consequences to forceful government actions to repress inflation now, but so many real Americans are being slammed by it now, metaphorically murdered, that something has to be done, negative consequences be damned.

[dismalist]

Well the Federal Reserve is raising interest rates. This will get the money supply to contract or grow more slowly. That will bring inflation down, likely bring a recession, too.

There's nothing new or strange about this situation.