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The Swarm Lounge
General Investing and Economics Discussion - No Politics
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<blockquote data-quote="Deleted member 2897" data-source="post: 810501"><p>Printing money is by itself inflation by definition. The way inflation is calculated (as you pointed out w/respect to used cars) is crazy. If a computer doubles its processing power but keeps the cost constant, it represents a 50% reduction in inflation. So there's a lot of other crazy moving parts to how we calculate inflation. I think we also bastardize numbers like wage inflation, because we don't count any of the unemployment/PUA numbers or PPP loans for owners as personal income in this way as it applies to inflation (a lot of people made a lot of extra money last year, but it won't show up in wage inflation numbers). All these things will sort themselves out eventually over time (as you also point out) as comparisons year over year are not now to a wacky shut down period and then we'll really know where we stand. One interesting side point the markets are probably not thinking about is that a 6% GDP growth number doesn't look so good when inflation is almost 6% - that implies that real GDP is basically flat.</p></blockquote><p></p>
[QUOTE="Deleted member 2897, post: 810501"] Printing money is by itself inflation by definition. The way inflation is calculated (as you pointed out w/respect to used cars) is crazy. If a computer doubles its processing power but keeps the cost constant, it represents a 50% reduction in inflation. So there's a lot of other crazy moving parts to how we calculate inflation. I think we also bastardize numbers like wage inflation, because we don't count any of the unemployment/PUA numbers or PPP loans for owners as personal income in this way as it applies to inflation (a lot of people made a lot of extra money last year, but it won't show up in wage inflation numbers). All these things will sort themselves out eventually over time (as you also point out) as comparisons year over year are not now to a wacky shut down period and then we'll really know where we stand. One interesting side point the markets are probably not thinking about is that a 6% GDP growth number doesn't look so good when inflation is almost 6% - that implies that real GDP is basically flat. [/QUOTE]
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