Tero's Crypto Corner

Discussion in 'General Discussion' started by terosis, Jun 20, 2017.

  1. Samassi Abou

    Samassi Abou TZT Abuser

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    The wage-spiral model is definitely an established theory. I understand that expectations play a role, but how sustained can high inflation be without incomes rising? Large parts of the population live hand to mouth, so if prices go up and their incomes don’t, they have no choice but to cut back on consumption, which itself will reduce price rises.
     
  2. Samassi Abou

    Samassi Abou TZT Abuser

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    Nah, I think that inflation has been turned into a bogeyman. No real evidence exists for long-term inflation having a negative effect on an economy at rates of 0-10%.
     
  3. BanedenHR

    BanedenHR TZT Neckbeard Lord

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    just be careful with lumber apparently

    and asphalt shingles

    but pringles are good
     
  4. Kanmuk_Sealclubber

    Kanmuk_Sealclubber Yes

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    What about inflation of housing prices, specifically?

    That’s what I’m concerned about (and lumber is an extension of that). I don’t care about inflation in a general sense. I know fuck all about it, though.
     
  5. Samassi Abou

    Samassi Abou TZT Abuser

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    As I say, I don't think there can be sustained inflation without income rises, so currently higher prices will likely be a blip. Eventually the stimulus money will either run out or be invested in cumrocket and with no likelihood of wage rises in the near future, the inflation spike will die out.

    But housing prices tend to be independent of building costs. For example, there has been little inflation (of goods and services, including building materials) in the last 20 years, but massive asset inflation (property, stocks, dogecoin, cumrocket).
     
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  6. Luthe

    Luthe TZT Abuser

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    [​IMG]

    Coming to America like Prince Akeem
     
  7. Utumno

    Utumno Administrator Staff Member

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  8. Octavionn

    Octavionn Non-Financial Advisor

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    There's been a LOT of chainlink vids on Youtube lately... Like a LOT.
     
  9. Grandasaur Egg

    Grandasaur Egg Groor.

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    Indicative of a bubble
     
  10. Octavionn

    Octavionn Non-Financial Advisor

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    4,357
    Or.... the bubble is about to grow!
     
  11. Agrul

    Agrul TZT Legend (seek help)

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    have a reference to where you've seen the wage-spiral model before? just curious

    re: incomes held constant -- if the money supply is also held constant, then i think that would imply an upper bound on the velocity of money, which in turn would imply a bound on how high inflation could get (EDIT: maybe even more strongly, an upper bound on how high prices could get, actually). i expect that once inflation expectations are strongly positive, though, wages would start to adjust to track them as well, albeit messily and haphazardly (and, more and more unpredictably, the higher inflation got). in a world where all consumer prices are doubled, say, it would certainly be strange if all wages still remained at present levels; that would be like businesses in NYC or LA paying the same wages as businesses in rural alabama, which we know an't true
     
  12. Agrul

    Agrul TZT Legend (seek help)

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    maybe what you've seen is this? i believe it is agnostic as to whether wages or non-wage prices begin the spiral, though, which is more in line with how ive seen it normally framed
     
  13. Samassi Abou

    Samassi Abou TZT Abuser

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    I actually think I first saw it in Shiller's book Narrative Economics which has a section on narratives over inflation, but I've always thought that wage rises were assumed in inflation-expectation models. As you say, surely there's a limit to how much prices can rise without growth in income.

    Would there be pressure on wages to rise? There might be, but I suspect that it'd be (1) too inadequate and (2) too slow to create a 70s style inflationary cycle. People have a sort of learned helplessness when it comes to modern wage stagnation.
     
  14. Samassi Abou

    Samassi Abou TZT Abuser

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    Just to be clear, I'm talking about non-wage prices beginning the spiral. For example, the 1973 oil shock: (1) higher oil prices increase production costs, which are passed on to the consumer. (2) Consumers demand wage rises to cope with the higher prices, etc etc. It's this second part that breaks down now since unions aren't as powerful as they used to be and people are less likely to demand wage rises.
     
  15. Agrul

    Agrul TZT Legend (seek help)

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    oh, i see. i don't think there's much reason to expect (2) to break down -- unions are an extremely important tool to offset differences in bargaining power in normal circumstances -- but i dont think they're at all necessary to cause the wage part of a price spiral to occur. i understand what you mean better now, though, at least
     
  16. Utumno

    Utumno Administrator Staff Member

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    Is there enough rich tech bros and billionaires to cause the wage part to go upwards enough for serious inflation?

    Cuz you know that all-important cumrocket indicator suggests there's ppl w/way too much cash to throw around
     
  17. Fais

    Fais TZT Abuser

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    My only issue with the whole @Samassi Abou "Housing prices independent of building costs." I think we have a weird pressured housing market right now, and then you throw in >100% increase in building costs. I'm not sure I remember a time when both of these were hitting at the same time. I read that the increase in the average building costs to a new home is $36,000 because of the lumber alone. The average home is ~300k. Labor costs are up and we have lost 75% of the normal supply of homes. I'm not kidding when I tell you that 95% of houses are selling right now on the day of listing for 10% over listing price. All the shit combined surely isnt sustainable in our local market. I know many places are better then others. Shit like that worries me.
     
    Last edited: May 7, 2021
  18. Kilinitic

    Kilinitic 6,000 feet beyond man and time

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    All the cumrocket in the world isn’t enough 2 buy a house here rn bc everything sells in 0.1 s w/ cash and cumrocket transaction times are like 0.2s
     
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  19. Grandasaur Egg

    Grandasaur Egg Groor.

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  20. Octavionn

    Octavionn Non-Financial Advisor

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    Hmmm.... i’m feeling its almost time to short doge. >=]

    If it passes bnb I’m going to enter a short position with $1k just for fun and see what happens. Lol