Quote:
Originally Posted by Gatordash
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The reason I'm mad (I'm not mad) is that if the government literally did nothing we would be in a much better place right now. The government thought they could get everyone to stay home and artificially keep the economy going by printing money and then when the virus passes, yeah inflation will go up a little but it won't be that bad and its like we never had a recession so everyone is happy. They came up with this term, "transitory" which essentially just means that. "Yeah inflation is going up for a bit but everything will be back to normal soon so no big deal."
But if they are wrong, and inflation is not transitory, then they just compounded the fuck out of the problem by printing all this money and are probably artificially creating a giant economic bubble that is ultimately going to burst and screw over a lot of people. (Me included because I have to buy a house next year) (Actually mad)
So that is why I argue with Juris. He'll post the inflation number the government puts out and be like, "look inflation isn't that bad, used car sales are weighted a ton in the CPI calculations so that is why this inflation number is high." Yeah obviously the government wants you to think inflation isn't that bad and obviously they want you to think they had nothing to do with it and its all the virus' fault.
In the case of housing, the lower a mortgage rate is the more house you can afford because your monthly payments are lower. The government has spent over a trillion dollars to keep those mortgage rates at all time lows. So yeah, people want to move to the suburbs cause they can work from home now, but they can also afford a much more expensive house because their monthly payments are lower.
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That's like me saying "obviously Wallstreet wants prices to go high" in response to linking the case-shiller index. Yea -- maybe that's an ok assumption if this was a review site. But these are entities that provide people with information that they need. They are only as credible as they prove to be accurate over time. If their data sucks too much -- some academic comes up with a better model and then we switch that.
Heres what the CPI says about rent overall:
https://fred.stlouisfed.org/series/CUUR0000SEHA
The Index 1982-1984=100, with the most recent number being 351.255 or a 351.25% increase on rent since 1982. The data is inferior, but is there really some massive difference that paints a completely different picture about the rent market here?
If you adjust some of the data sets to 2015 (the earliest OCED date available) You get:
Case-Shiller: 156.1 (
https://fred.stlouisfed.org/graph/?g=k7pa)
CPI: 124.7 (
https://fred.stlouisfed.org/series/CUUR0000SEHA)
OECD Rent: 122.1
OECD Nominal Housing Prices: 155
OECD Real Housing prices: 139.1
The difference between these number is significant enough -- but they all show a pretty similar long-term trend. Also it would appear that the CPI is much closer to rent pricing -- rather than a good measure of home value. Case-Shiller seems to be the opposite.
There are so many people that need these numbers to make important decisions -- I tend to think they wouldn't pump the numbers just to make an administration look good.