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Is Amazon Lowering The Global Rate of Inflation? (businessinsider.com)
An anonymous reader quotes Business Insider:
Another investment bank analyst has signed on to the idea that the internet is holding down the rate of inflation. Bilal Hafeez, the global head of G10 FX strategy and head of EMEA research at Nomura, published two notes last month on whether the value of the dollar was being held down by Amazon and its ilk. In one note he called it "the Amazonization of inflation"... [O]nline commerce typified by Amazon is making the supply and distribution of goods so cheap that "Amazonisation" itself is now a deflationary force at a macro level, Hafeez argues. He writes: "While globalisation was the meme of the 2000s, this decade's has to be the 'Amazonisation' of commerce. Given the bulk of the cost of goods is distribution costs, Amazon's unique distribution model and widening range of products could impart a new disinflationary impulse on goods prices."
This idea is becoming more popular among analysts as the months roll by. Back in September 2016, we told you about the "Spotify problem," in an interview with HSBC's James Pomeroy. His theory is that the internet allows consumers to shop around and compare prices incredibly easily. It also substitutes cheap digital goods over more expensive physical ones. For instance, people stop paying £20 every month for a CD when they start paying £10 a month for endless music from Spotify. The result is that businesses are aggressively driving down their own prices because consumers simply won't go to the ones that charge more, and are no longer trapped into shopping in their own neighbourhoods. Sweden is so advanced as a digital economy that it may be importing its own deflation via digital shopping, Pomeroy argued.
This idea is becoming more popular among analysts as the months roll by. Back in September 2016, we told you about the "Spotify problem," in an interview with HSBC's James Pomeroy. His theory is that the internet allows consumers to shop around and compare prices incredibly easily. It also substitutes cheap digital goods over more expensive physical ones. For instance, people stop paying £20 every month for a CD when they start paying £10 a month for endless music from Spotify. The result is that businesses are aggressively driving down their own prices because consumers simply won't go to the ones that charge more, and are no longer trapped into shopping in their own neighbourhoods. Sweden is so advanced as a digital economy that it may be importing its own deflation via digital shopping, Pomeroy argued.
How about discussing how Linux is being used successfully to help businesses?
It all depends on what factors you use to calculate inflation.
For merchandise possible to purchase via Amazon, Ebay or other similar large scale web source then it's holding down inflation since prices are severely pushed down. But for other merchandise like food and similar that don't do well on Amazon and Ebay then inflation can be quite different.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Ignore the steadily rising cost of housing, (restaurant) food, and transportation, your perishable goods and entertainment items are staying the same price!
When you have amazing rates of deflation pushing against amazing rates of inflation, it doesn't mean that the inflation is gone.
Amazon puts people out of work. Automation is now to the point that it has put people out of work. People are therefore worthless. They will accept less pay for more hours. That is deflation.
I also find it cute that robbing every dollar holder of value is somehow "a good thing" because inflation is such a good thing because someone says that 2% inflation rate is such a "good thing" yadda yadda yadda. The dollar has lost 96% of its value since the private bankers took over with the Federal Reserve. It's as "Federal" as Federal Express. A federal charter for a private banking cartel does not make it a government entity.
when the price wars are over, the monopolies will prosper
Amazon is using the classic monopolist approach: sell at unbeatably low prices until you drive the competition out of business. At that point, with no competition you can raise your prices to whatever you like, and, with no competition, people have to pay.
1 ...
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3. Profit!
Some people who would read this might not even understand what deflation is and might not understand why this might be a bad thing...
For years economists relied on various metrics to measure the health of the economy e.g. employment rates, inflation etc. The problem is that tech is already changing the very behavior of these variables and that's before we have things like self driving cars & advanced everyday robots... It's very possible that we are heading for another meltdown and won't have the obvious warning signs because the economy might seem fine to the experts.
TFS: the idea that the internet is holding down the rate of inflation. Bilal Hafeez, ... published two notes ... on whether the value of the dollar was being held down.
Confused dog is confused. Holding down the rate of inflation implies keeping the value of the dollar up.
Science and technology are lowering it. We are slowly going to have to face the fact that our economic and social models are obsolete. We will have to accept that not everyone needs to work and we are in an ocean of abundance, but forcing each other to operate as if it's the Bronze Age.
As usual, it's not the countless scientists and engineers that designed and built the machinery that allows this abundance, instead, we focus on one person who had nothing to do with it, and he gets all the credit.
Please tell me more stories about how good is Amazon. https://en.wikipedia.org/wiki/Amazon.com_controversies
a lot of this seems to be pulled out of thin air with no numbers to back it up - is buying a physical music CD which will last a lifetime under normal storage conditions and a CD player which is cheap to replace compared to a digital player REALLY cheaper than a $400 iPad or iPod Touch and buying the same music digitally? where are the numbers to back this up? yes, we have less physical clutter with digital media, but is it really cheaper? especially if you have to keep buying the same stuff over and over on different platforms - as for me, i would prefer to see some hard numbers, such as the TCO total cost of ownership of a CD collection over a decade versus renting music and playing it on a digital player - until someone does that, these articles are worthless
... the banks can used borrowed money to help you drive the price out of your reach. All that money saved on amazon is soaked up by interest payments on your house.
Then the market crashes, the banks get the houses, and hold them off the market until the next crop of suckers is ready to pay too much for fear of being left out.
Rinse, repeat.
No.
For instance, people stop paying £20 every month for a CD when they start paying £10 a month for endless music from Spotify.
This assumes that people generally buy music monthly, and that the music costs a certain amount. It also assumes that the same selection is available on Spotify as in the record store.
When I buy music on a physical format, almost exclusively CD, it's almost always used. If it's not used it's because it's a new release and is not available used, and if my interests are not top-40 or top-100 then it's probably not available on Spotify either.
I'm going to hazard a guess that Spotify isn't displacing as much physical media or purchased media files as it is listeners of satellite radio and FM radio, where listeners got tired of excessive numbers of ads or of not getting enough of the music that they want, or of paying for stations that they don't listen to.
It's often commented that 80-90% of one's business comes from 10-20% of one's customers, the die-hard, repeat customers. Based on my own observations, with music this seems to hold true. Sales to the very occasional buyer of an album are not insignificant, but they're not as important as sales to those who feel that they are connoisseurs and make regular purchases. Those in the latter group are probably going to still buy, it's the casual buyers that will be lost to services.
Do not look into laser with remaining eye.
Walmart has been having the same effect (one of many) since the mid 90s.
Why name this after Amazon?
* Transit fares have gone up continuously; e.g. https://globalnews.ca/news/235... And pennies have been withdrawn from circulation in Canada
*A new 1974 Ford Maverick, V8, automatic transmission cost under $4,000 in Canada, and probably around $3,000 US. Try getting a 2018 Ford Focus for under $20,000 today.
* Food prices have kept rising continuously
* Rents and housing getting unaffordable here in Toronto
* Cable bills keep shooting upwards, which is why "cord-cutting" is now a thing
* A new 50 inch plasma TV was $3,500 in 2007 dollars. Today a 50 inch LED TV can be had for $300
* A basic IBM PC with 640 KILObytes of ram, 10 MEGAbyte disk drive, and 320x200 siaplay CRT came in at around $5,000 in 1983 dollars. Today's $1,000 machines walk all over it.
Problem... you can't live in a PC or TV; you can't eat a PC or TV; you can't ride to work in a PC or TV. The upper or upper-middle class are better off today (what's left of the middle class, but that's another story).
Meanwhile. a lot of ordinary people, especially those in minimum wage jobs, have extreme difficulty paying for basic necessities. Is there an inflation index for necessities, i.e. food/shelter/clothing and transportation? And by transportation, I mean local stuff. A flight to Hawaii might cost less today, but the average person is more worried about commuting to work, and getting around town.
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user
1. Return on savings accounts: Abysmally low.
2. Have you seen a decent raise since the 80's? Not me... Not anyone I know. All decent raises happen at the C-level and above.
3. Have you noticed the price of housing, education and heath care are all skyrocketing? These are the essential things everyone needs. Will food be next?
4. What about that trend towards precarious employment (temps, gig work, etc.) have you been affected? Jobs are essential too.
5. All the stuff not required to live decently has not been inflating... (Well maybe except for cable TV, airline fares, and insurance).
6. Have you noticed the hyperbole in politics? This is a distraction to keep everyone from noticing the detrimental changes to society.
7. Have you noticed the government can't get anything done? Me too.
8. Have you noticed a trend to marginalize the rights of ordinary citizens? (Binding Arbitration, Non-compete agreements, Federal preemption)
9. Have you noticed a rise in hate groups, and religious zealotry, as well as attacks gay and transgender people? Hmmmm, this is like Germany in the 1930's.
Something nasty is bound to happen soon.
at least not in the United States. Here it's our aging population who've had their pensions and retirement funds raided the last 20 years. They've still got their savings though and they're using those to buy houses to flip and/or rent. That's also what caused the 2008 crash and why it was so bad. It wasn't poor people buying houses they couldn't afford. Those folks tried tooth and nail to hang onto their homes. It was upper middle class who'd over extended themselves in the house flipping market. When it became clear they weren't going to make back their investment they just walked away because they had no emotional attachment.
Basically it's baby boomers. We've left them with just enough money to be dangerous but not enough to live out their lives comfortably. They're gonna wreck our shit for the next 20 years until they die off...
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While I agree with some of your points, Amazon didn't exist in 1974. If you were to look at their effect, you'd have to limit yourself to the 10-15 years they've been operating as a significant international player. But yes, it makes sense they're only effective in the markets they operate in, ordinary consumer goods, rather than cars, etc.
Cable bills? That's a tough one - you say "They're rising hence cord cutting is a thing", but Amazon is one of the companies that's involved in that cord cutting and making it possible. People are going from spending $50-100 on cable TV to $20-40 on Amazon Prime, Netflix, and Hulu.
And Comcast has actually noticed that. They're now offering their channels as streaming TV instead. So sure, "Cable TV" is more expensive than ever, but "Having stuff I can watch on TV" is going in the reverse direction price wise.
You are not alone. This is not normal. None of this is normal.
No.
https://ycharts.com/indicators/ecommerce_sales_as_percent_retail_sales
Try central bank balance sheets, sovereign debt, and negative interest rates.
Hello, baby boomer here...
I wish I could criticize your post beyond being a bit exaggerated...
There are huge numbers of boom-generation people hanging on to what remains of their work lives and careers by the last millimeter of their fingernails. Add to that the fact that there's no such thing as a "savings account" any more: The only way to not fall behind inflation (see paragraph below) is to "invest" in equity, bond and/or international markets. Those markets are gyrating madly and some who needed to see a bit of safety for their 10 year money bought into the real estate market. They hope to put their hard-earned savings into a material investment vehicle they could see (and not evaporate suddenly), that should at least keep up with inflation. Some of them bought into the explosive adjustable rate mortgages, having been lied to by the fuckheads selling those (IMHO) fraudulent loans. My wife and I bought a house (using our 30+ years of savings) for that reason, though we would never get sucked into such a sick excuse for a loan.
Now about inflation: I think I agree that easily shippable goods have experienced reduction of inflation due to the Amazons of the world. But let's not be confused about "inflation". My wife and I have experienced increases in the costs of stuff we cannot do without far far in excess of "inflation". These things are things that cannot be shipped from countries engaged in "the race to the bottom": Medical insurance, taxes (property, sales, etc.), communication (I am a developer, my wife is a psychologist. There is no business without it.) We are grateful that another source of monstrous and damaging inflation, education (also local and increasingly profit driven) is not killing us financially as it is so many others.
My observation is that inflation has developed a bimodal distribution: services that can only be acquired locally have a high inflation rate, while goods or services that can be globalized have a low inflation rate.
Bottom line: Some unwise boomers didn't save and may have taken advantage of the bullshit loans, which contributed to the meltdown; I suppose the temptation of a McMansion might be part of it. I pin blame for the meltdown on the lying thieving bankster fuck heads (if I believed in Hell, they belong there, they knew exactly what they were doing to their mark^H^H^H^Hcustomers). There are also "wise" boomers that have savings who are getting fucked over by the lack of any investment vehicles that can be trusted in less than 20 year time horizon.
Anytime the scale is increased and there is a competitor (both Walmart and the "competition" of all brick and mortar versus online are Amazon competitors), prices will be under pressure to stay low and can be kept that way in this case both by reduction in costs (no store fronts in prime locations) and by voluntary reduction in profit margins.
This is nothing new. If you look at what we have today versus 50 years ago from an absolute point of view instead of a relative to others of the same day point of view, we've experienced tremendous deflation. This is what tech does. It will inevitably end in either our destruction or everything eventually being free.
Global competition, cheaper prices, customer choice - aren't these the very tenets of Capitalism that has been lauded for so long? So now *too much* Capitalism is a bad thing?
Nobody's gotten a raise in decades in real terms. Wages and salaries stagnate.
As a result, who can afford to pay higher prices for anything?
Meanwhile. a lot of ordinary people, especially those in minimum wage jobs, have extreme difficulty paying for basic necessities. Is there an inflation index for necessities, i.e. food/shelter/clothing and transportation?
Sounds like a difficult figure to calculate, but you can look at percentage of spending. The lowest quartile spend ~35% of their income on food and that's relatively stable. In 1992 the AAA's driving cost gave a composite index of 38.8 cents/mile for 15k miles, which put into an inflation calculator is 67.9 cents in 2017 dollars while for 2017 it's 56.6 cents. Basic clothing I didn't really find any great statistics for and is hard to separate from design and fashion clothes but labor costs have been pretty flat from the 80s to 2010 which indicates prices on basic clothing wouldn't really get much better either. Price per square feet for a new home is also pretty flat in real dollars, even though the number of square feet per home and per person is growing.
In summary, living on minimum wage wasn't easy a few decades ago, it's still not easy now. It's hard to find some figure that's significantly worse though, though increasing disparity may in itself be a problem if you feel "everybody else" can afford to drink their coffee at Starbucks except you. That's what drives most people into financial disaster, if you accept the social stigma of being poor and just blatantly say you can't afford it you'll probably do okay. It's those who have to try pretending they have money when they don't who bury themselves in credit card debt and end up in a quagmire they never get out of. I have one buddy that is like that, he's made some life choices which has left him quite far behind us financially. And nobody's pushing him to spend, but he's constantly overextending himself.
Live today, because you never know what tomorrow brings
for a problem when they already know the cause - oversupply of both goods and labor.
So many of your examples picked high-end versions of products: V8 in the 1974 Maverick, hard disk in the 1983 PC, plasma TV in 2007. When you make it so clear that you don't comprehend what "basic" means, you also demonstrate why you fail to grasp how fungibility is holding down inflation.
I know a pair of economists who bought a Maverick back in 1975 and a Focus in 2015. While I don't know what they paid in 1975 for their new, 4-cylinder Maverick with AM-only radio, I know that in 2015 they only paid $12,000 USD for a new Focus. They accomplished this miracle because they understand what 'basic' means. Basic transportation doesn't mean luxury options like a V8 engine, an automatic transmission, a radio that can get FM, or (in 2015) remote door locks.
Of course they also never made the bone headed mistake of considering cable TV a "basic necessity" and I think they got their first cellphone in 2016 ... naturally it's a prepaid $3-per-month plan on T-Mobile with nary a web browser in sight.
The price rise from $4,000 to $20,000 over 43 years is below 4%/year, and you're getting a somewhat better car. The focus is available in a rage of prices, from $13650 to $36995.
4% a year is not outrageously high, although it is excessive: should be zero.
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There was a time 300 years ago when food was over 50% of a median person's spending. For 250 years the price of food dropped but now it only makes up a small portion of the basket because I can only eat so much. Housing on the edge of a city hasn't gone up faster than inflation and if we define the cost of housing in terms of distance to the edge of the urban area it isn't going up that fast. One other point about housing in North America is that the amount of space per person has increased significantly. So outside of urban cores, the cost per square foot may not have kept up with inflation. Cars - The car that is in the basket of goods today is a far better car than the one 30 years ago. It is more reliable, will last longer, pollutes less, has air conditioning, is far safer, gets more gas mileage, etc.,br> There has always be some part of the basket of goods that the consumer uses that drops in price. This won't lead to deflation over all though because I can only have so many TVs, computers and Spotify accounts. Maybe initially the drop in price will cause me to buy more of these goods but in the long run the portion of my spending on them will decrease and I will spend more on something else that has probably gone up in price. On exception to this is anything that rapidly decrease energy or transportation costs. Then we could have deflation - no canals, rail roads and internal combustion engines did not rapidly decrease transportation costs, they took many decades. Nuclear almost gave us cheap power in the late 60s but the environmentalists killed that (and saved the coal industry).
Is there an inflation index for necessities, i.e. food/shelter/clothing and transportation?
for food there likely is, this is official "inflation" numbers i believe is based on "commodities"
of course, that is > 2000% (roughly $1 silver dollar, specie, silver coin, an actual dollar == roughly $20 FRNs or make-believe "credit") .....
so, to compare actual inflation (siphoned off wealth by the banksters for generations), first divide any numbers by 20, to get rough "actual dollar".
once you are back in reality, then a $800,000 home is supposed to be $40000, a $20000 car is supposed to be $1000, etc.
at this point, you are probably foaming at the mouth and ready to strangle any "banker" who is not only counterfeiting dollars, siphoning off 20x of everything, but also having the nerve to charge "interest" on the make-believe "credit" they make up out of thin air.
also, (paraphrase) "he whose assets are at risk [for a loan] should receive the benefits thereof" www.dict.org, bouvers law dictionary, "maxim" (these are common alw of the land, see also "specie" and "paper money" )
at this point, you will see people are owed all the "national debt" as "credit" ... because that is stealing of people's credit. and they are owed taking of private property (debt free specie, actual dollars) for public use...such is allowed, but people need to be compensated for that 2000% taking .
so, once you know reality of "dollars" ...i think your worries of "inflation" are miniscule.
we are talking 18 trillion (just current number) of fraud.
technically this is "press ganging" (inland piracy) ...$50 is capital offense. so, as a final calculation, divide 18 trillion by $50 to see how many times the banksters should be "hung at the liberty tree"
also good (paraphrase) "a delegate cannot delegate" (implies exclusion of anyone not named) ... so "Federal Reserve Board" and Andrew Jackson's comment (paraphrase) "if they [congress] has the power to print currency, it was meant for them to use themselves, not to grant to a bank" was solid basis in law too.
see www.annavonreitz.com if you would like to see more actual law and dollars and war crimes going back centuries.
Is there an inflation index for necessities, i.e. food/shelter/clothing and transportation?
also see www.annavonreitz.com on that too...there is a committee tasked with this...but with everything being make-believe "credit" nowadays (not "Cash" and not "specie" just imaginary siphoned off credit that people have to "work" for and pay "interest" on credit that is rightfully theirs in the first place) .............the committees trying to decide the worth of things has basically said they dont know anymore....
so, there would be one........but none of the "dollars" have had any basis in reality for a long time.
long story short, if you can get central banks everywhere, and inflate at the same rate...and ban everything else (or at least, mandate your funny money as "legal tender") .....then you can just siphon off/prnit funny money forever and ever, at least theoretically....enforced at gun point, but in that sense, your "dollars" may be worthless, but you just make everyone elses as worthless
(if that sounds conspiracy-ish, central bankers have actually done this before...inflation is less bad if everyone else is equally worthless, and people have no choice...)
so, if they have their way, they kind of factored that in already.....that it will always just be made up...but everyone else will be worthless too! so they can just loot and steal forever.
You need to watch or read The Big Short
Are we talking about the same Amazon whose prices are higher than most other stores? Who seriously thinks Amazon has cheap prices? Walmart is much cheaper pretty much always.
I've never had food poisoning. Where the hell have you been eating?
gee what shitty explanation, just look statistics of salaries of common folk vs top earners... its pretty much clear that since 1970's in western world, some countries its dated decade or two later, has crunched through inflation to point where average peep actually has so much less to spend theyre forced to look up cheapest shit they can find... and thus retail surplus that used to be there is diminishin, that top 1% of high income population simply doesnt buy 20x more diswashers and tv's+beds and what not than average joe...
thus rate of money in circulation in masses slow down... and eventually its going to hit deflation where rich dangle dollar in front of poor to do their bidding... and next day its 90cents...
Lowering prices vs other end point delivery services is not related to inflation at all. It is a price change.
Inflation is always and forever monetary. Changes in the monetary base for the fiat currency (USD, GBP, EU, YEN, whatever). When central banks print money, or virtual money they create inflation. That makes goods and services more expensive and the segment of society least able to cope is the poor and the middle class. Yellen targeting 2% inflation is a war on the poor.
Amazon is pulling a Wal-Mart by eliminating the middleman and increasing concentration of distribution centres and performing some of the endpoint delivery functions. They also squeeze their vendors to produce in low income countries which is of questionable ethics and patriotism and even self interest as the domestic market they serve becomes systematically poorer.
Having a degree in this stuff just pisses me off. I suggest drinking.
See subject: Whoever the fool is attempting to "impersonate me" only proves that I've REALLY 'gotten to them' somehow (thanks).
* I am with you on something though - there is a TON of bogus downmoderation but as the saying goes? "When all your opposition has is censorship you've obviously won" (& I am highly against the LOON(s) who shot all those folks up in Vegas - I think it's somekind of falseflag OR an attempt @ further dividing our nation up ala the KING of bogus evil in that capacity, George Soros paying off groups like BLM & Antifa to do so...) - but GUNS DON'T KILL PEOPLE - people do. NO reason to ban guns!
As far as "AssFux" Ash-Fox? That whimp's a weasel who ALWAYS starts w/ me (he's 'butthurt' I've busted him up on tech issues is all that is)...
APK
P.S.=> Provoking weasel reactions like yours is all the satisfaction anyone needs... apk
Quite simply, this is wrong. Inflation, or deflation, happens due to demand driving prices up, or lack of demand driving prices down.
Lowered costs can decrease inflation and inflationary pressure, but it cannot drive deflation. The reason why should be easy to understand.
Costs can push inflation, but they cannot pull deflation.
Assuming constant demand, costs increase for Producer X so it increases prices, reducing supply sold to that constant demand.
Assuming constant demand, costs decrease for Producer X so it has two options: take the Profit from those decreased costs, or decrease the price. If it decreases the price, assuming constant demand, it will sell more so supply will increase.
Let's assume that demand is not constant. For cost decreases to pull deflation, demand would have to also be lowered due to that cost decrease. When costs actually decrease, what likely happens instead is that consumption is then shifted into other areas. Even if that consumption is shifted into savings instead, that is not caused by the decreased costs, but by lack of demand. In essence, a shift into savings is a shift of present consumption to future consumption.
This idea is pernicious and idiotic: it's similar to the lump of labor fallacy, arguing that the reason for the global deflation we are facing is anything, ANYTHING other than the fact that demand is low because people are poor and can't spend money due to the growing wealth inequality in developed countries. The only way to turn it around is for governments to quit this austerity idiocy and spend money to get out of these deflationary spirals.
amazon is not "significant" outside US...
Amazon can't lower the increasing costs of basic goods because of climate change, environmental deterioration, raw materials depletion, nationalist idiocy and wars. Most of what Amazon sells aren't basic goods, and gadgets shouldn't count much toward a meaningful inflation rate.
Also, how would lowering the exchange rate of the US dollar against other global currencies lower the global inflation rate? Does not compute.
Why the fuck is this modded -1? Its not trolling, its not offensive..its quite insightful. Some moderator clearly has a political position that was offended by this information. Fuck you. Mod that in your ass.
What a lot of people aren't seeing is that Amazon is slowly working towards removing all of the overhead involved in distribution of goods. Eventually, Amazon's private air cargo service can pick up a few pallets of Chinese manufactured goods directly from a supplier it practically controls, ship them on their own carrier to their own warehouses, and eventually use their own delivery service to get them to your door. At every step in this process, they've removed overhead and labor form the process. The supplier is under similar terms that Walmart extracted from them years ago, so they're making a tiny profit on their finished goods or selling at a loss to get product placement. If Amazon isn't paying shipping companies to send their goods to the US, then those shipping company employees don't have jobs. Once the goods are in the warehouses, Amazon uses their near monopoly power on low-skilled labor to drive the box-packers as hard as possible. And of course, there aren't any store employees or stores in Amazon's system (yes, they now own a grocery chain, I know...that's going to be a whole new universe of disruption.)
It's just end-stage capitalism. No one will be able to afford any goods once all their jobs are gone. I just don't think we're ready for the level of hardship everyone is going to experience. The vast majority of jobs are middle-man in nature. Some are huge wastes of money- just look at realtors and insurance brokers - but that doesn't mean their industry doesn't support millions of good-paying jobs. It's going to be a big culture shock when these jobs move to minimum wage in a warehouse from a nice office and a decent middle class living.
My observation is that inflation has developed a bimodal distribution: services that can only be acquired locally have a high inflation rate, while goods or services that can be globalized have a low inflation rate.
Mathematician here. This is a minor quibble, but your wife can back me up on this (psychologists are typically pretty good at stats). What you're describing is a unimodal distribution: one maximum and a direct, one-way correlation between variables.
It wasn't the boomer's McMansions that caused the crash. It was their desperate attempt to secure their finances after their pensions were raided by the Bain Capitals of the world.
I suppose there's a case to be made that the Boomers allowed the deregulation that made that kind of pension raiding possible, but well, there was just a Nobel prize given out for why people make bad decisions. For esoteric financial regulations it can be surprisingly hard to keep them intact, especially when you have multi-millionaires and billionaires attacking them non-stop.
What I'm saying is those boomers weren't necessarily any wiser, they were just lucky. A savings account was never going to see you through retirement. That's why folks came up with pensions in the first place. And that's why an entire industry sprouted up to raid those pensions...
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Every economy story on Slashdot becomes a shit storm of ignorance.
What the article is describing is basically an improvement in information. A competitive market with perfect information would cause deflation. What we are seeing is that we are a little bit closer to perfect information with all the price comparison websites out there. It's not even an interesting or original insight, it's Economics 101.
I am not fully getting the link he is trying to establish. Inflation is a result of increased monetary supply, which has been controlled by the central banks—depending on how you want to see it—the *latest* with the introduction of the floating exchange rates. This article makes it seem like inflation is somehow reduced by increasing productivity, specifically by reducing the costs of basket products as opposed to increasing their quality, i.e. cheaper things of the same quality every year rather than identically priced items of higher quality every year. That is completely besides the point and has nothing to do with the reason we have low inflation rates, being quantitative easing.
Why the fuck is this modded -1?
It was not moderated at all. Check the history for yourself. Roman posts at -1 because his karma is in the toilet here on slashdot. He earned that awful karma by attempting to turn slashdot into a recruitment tool for his favorite cult, and for his general degree of extreme dickishness towards people who disagree with him.
The comment you are looking at is just roman doing some karma whoring, in the hopes of getting an approving moderation to help move his score back up towards posting at zero. He also at times feels that his recitations of the gospel are too important to wait for that to happen, which drives him to use at least one known sock puppet account.
Meanwhile. a lot of ordinary people, especially those in minimum wage jobs, have extreme difficulty paying for basic necessities. Is there an inflation index for necessities, i.e. food/shelter/clothing and transportation? And by transportation, I mean local stuff.
The US BLS has some papers on this. See the article by Jonathan Church for a starting point. They include food, energy (not just heating/cooling/lights, also transportation), and health care.
I don't know how accurate these indices are. Energy as a measure of transportation costs seems especially suspect. In many places, policies such as rent control have forced people into longer commutes since they can no longer get housing in the community where they work - low income workers are the most affected. In other cases, policies such as minimum wage have forced people to work multiple part time jobs as a result of losing work hours in a primary job, again leading to additional commuting time. This is primarily something that affects low income workers. Thus, measuring the true cost of transportation seems likely to be higher than just the average cost of some unit of energy. Also, additional commuting time means more traffic, more stress, more road rage, more health issues, so it plays into the overall cost of living in complex ways.
But even ignoring all this, the evidence presented by the BLS is that basic necessities are going up faster than overall inflation. If we took the real cost of transportation into account, it would only make the conclusion more compelling.
Also, there are certainly other things that need to be considered as basic necessities. Things like auto repair, glass repair, plumbing (including heating and cooling), electrical repair, appliance repair, roof repair, and general handymen services are also essentials for many people (basically everyone not renting - the costs of these services also indirectly affect the rent levels). In many places, these costs have also significantly outpaced general inflation.
Clothing is yet another issue - certainly a necessity, especially in cold climates. Other fabrics are also important, including blankets for cold winter nights (and good curtains for northern homes, which can significantly reduce heating costs). There are big problems, however, in comparing the price of clothing and other fabrics. A lot of stuff today (especially that in the big box stores) is shoddy quality, arguably a lot lower quality than what was routinely available at certain points in the past. But some is decent. So the actual cost of comparable clothing is difficult to estimate.
Quality in general affects these comparisons in complex ways. We shouldn't, for example, consider unhealthy food a "basic necessity" - but not everyone agrees on what is healthy.
The price rise from $4,000 to $20,000
The Ford Maverick ($4000 in 1974) was not an entry level car. It was a high performance car. The Ford Focus ($20,000 now) is an entry level car
To get a real comparison, you would need to determine what 2017 car is the equivalent to the 1974 Maverick. I don't know.
However, according to http://www.usinflationcalculat... $4000 in 1974 would be almost $20,000 in 2017. I'm sure that whatever the equivalent 1974 car to the 2017 Focus was less than $4000.
Don't try to out wierd me, three-eyes. I get stranger things than you, free with my breakfast cereal. --Zaphod Beeblebr
Inventions happen whether there are wealthy patrons or not. Most inventions are not from "big labs", but rather either serendipity, or some technician trying to solve a specific problem for a specific product. I bet there would be more innovation if we didn't have a patent system. Smaller co's would be able to mix and match existing ideas without paying an arm and leg in royalties to conglomerates.
Table-ized A.I.
Ford Maverick was a piece of junk, maintenance-wise. Most of today's cars are far more reliable than the 1970's, and thus I'm not sure it's an even compare. But I have noticed that minivan prices seem to either be dropping or staying below inflation for the last 20 years.
Another thing is, since cars last longer, most "low end" car shoppers buy used. It's value depreciates quickly the first few years. Today's 5 year old car is probably on par or better than the reliability of new cars of the 70's. Therefore, car manufacturers target more financially established buyers. The new-vs-used curve has shifted.
In fact, a new car is a bad deal relative to say a 4-year-old car in terms of total cost. People buy new for the status, not from sound wallet logic. (If your job requires timeliness, then reliably may trump cost, but that's an exception.)
In short, the example was comparing apples to lemons.
Table-ized A.I.
Correction
Re: "It's value depreciates quickly the first few years" is supposed to go after "a new car is a bad deal..."
Table-ized A.I.