PrincessNutNut

I note you avoided the question by comparing climate change to gravity. (And gravity is not undisputed these days) I'm intrigued by the schizophrenic view that you're displaying - I don't care about you otherwise. Trying to control what people think has a cost. Misinformation is free. And that's not the answer to what I was asking.

We haven't quite banned free thought or speech - that's not quite the same as open debate. Do you know a single scientist that is taken seriously that is studying or publishing something contradicting the consensus? Moral superiority complex? I think availability heuristic is largely feeding the narrative here - driven by our tiny lifespans compared to the time scale of planetary change. We know virtually nothing, but what little we do know can be spun into a seductive narrative (and we're all suckers for narratives). Somewhere earlier you were on about people writing unnecessarily complex responses when they're trying to portray themselves as more knowledgeable than they are... It doesn't, that's why it's in brackets - but I wondered if it had any. I assume that means no for that question?

It's not a new measure, and I think it proves what I'm trying to prove: The base is rising, which is making high inflation look (relatively) acceptable. Imagine I was adding £1 to the price of your pint. First year it goes from £4 to £5. Second year it goes from £5 to £6. (Excuse the shockingly realistic example.) Why is the second pound more acceptable than the first? Shouldn't it be less so, given the recent increase? Yet that's exactly what the message is from the central banks. Everything is relatively not quite as much more expensive than last year as it was last month - success! I don't deny CPI is declining y/y vs recent months. I disagree that's still a relevant measure, or that we should celebrate a return to 2% (now forecasted in 2025) after what will then be 4 years of above target inflation.

The point where open debate became morally unacceptable because "there is consensus" ("how dare you?!") is where the science died and ideology took over. Don't take it personally, but stating absolutes on the topic as a non-expert professing to be a specialist in self-deception is ironic. As a point of interest, what (economic) use is it to analyse or identify conspiracy theorists?

That's not a definitive interpretation, though it is a possibility. Personally, I interpret it as the composition of the monthly basket skewing towards larger, more expensive properties becoming available, which increases the average disproportionally. Why? Because when leverage starts to decline, it's starts with the most leveraged. (Check out what someone with a 1M+ mortgage is paying these days)

I can't argue with you there as I don't know enough about it. I do find it hard to believe that any company with 9 figures AUM has trouble with fixed costs - perhaps a symptom of the low-yield, easy money environment? Perhaps the solution is to nix most the admin, compliance and risk people? (A move that would benefit the majority of large companies in the world)

The rises aren't slowing, the base we're comparing them against is growing, that's why I'm showing the 2 year rate, which is steadily climbing. Team transitory would have you believe that all is well if we hit a 2% target eventually. It isn't. If you hit 2% a year after 100%, or 2% after two years of 10% is different than after a year of 3%. If you use a different timeframe you need a different target. But below is the 5Y rate of inflation - displaying the same trend. 2022 2022 2022 2022 2022 2022 2022 2022 2023 2023 2023 2023 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 16.95% 17.92% 18.72% 18.66% 18.85% 21.06% 21.17% 21.19% 21.14% 21.97% 22.78% 23.79%

Out side of the age of easy money, I don't think this is true. In the time of algorithm trading and ETFs, active management has become an afterthought. But as the past two years have shown, markets don't always go up. Trading uncertainty tends not to be the forte of large institutional investors. Theory correct. In practice, a diminishing of value adding labour through a combination of demographics, malinvestment (->non-jobs) and stagnation of leverage (-> yield per unit of labour) as a consequence of this and technology (-> increasing value of capital vs labour) is clearly observable. The consequence so far is the gradual restriction of access to better pensions and increasing of the pension age. Where it all comes to a head is that ultimately the government is liable for its nation's elderly (if pensions failed to do so, transfer payments need to take care of it), which means the current taxable population is liable. This is exacerbated by a little thing called inflation, where when the government tries to fix the problems (largely of its own creation) by creating new money, they're working against the principle of the pension's capital securing the yield for pension payouts.

At 8.7% it's a 0.5% beat of expectations. We had 9% inflation last April... The two year rate of inflation series (which negates base effects somewhat): 2022 2022 2022 2022 2022 2022 2022 2022 2023 2023 2023 2023 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 11.39% 12.16% 12.35% 13.38% 13.49% 15.72% 16.35% 16.48% 16.06% 17.24% 17.83% 18.49% At this rate of inflation it takes 8 years for prices to double. We're 2 years in.

There's no defect in the market. Wind energy is cheap when the wind is blowing, because there's a sudden local supply glut. The supply glut exists, because when the wind isn't blowing, there's a fossil generator providing the power. And when the wind is blowing, that generator is running on standby to make up for the intermittency of wind power. That's why there are CfDs - they're to protect renewable generators from an underlying feature of their power sources. The wrong conclusion is to draw from low wholesale prices low production costs.

It's the very definition of the term. Yes, and the next transaction with the same money will also be recorded inflation. Because it's the transaction that sets the price. If the price over all of our collective transactions rises between two points in time, that's measured as inflation. No. Velocity is how often the same money is spent between two points in time, i.e. the number of transactions. No, but the total currency available sets the ceiling for how much can be agreed per transaction. As the homo economicus is fiction, and we're by and large monkeys spending every penny we can get our hands on, it is the single most important factor to setting prices.

The economy includes the profit made by the interest and property transactions. So that's only correct if you mean that the money would otherwise be better invested. Which is possible, but not guaranteed in a ZIRP world.

No, sometimes history is written with false narratives. Yeah. You were talking about inflation for most of the post. The sum of prices paid in transaction compared between two points in time = measure of inflation. They're not the same, but there's a strong relationship between the two. This is a flaccid argument, just as "if we exclude XYZ, inflation is only ...%". Especially if you look at the real composition of the baskets (which works against your argument, as staples are in the minority). The correct conclusion to your hypothetical scenario isn't inflation, but starvation. Yes, food prices rise. But as it's prioritised over pretty much everything else, those prices fall in response - if money supply is constant. Because inflation is when the sum of what all of us pay for all of our transactions increases, it can only exist if we collectively have more to spend. See above. The economy was shut down. Meanwhile, governments increased to record deficit spending. People got paid for not adding value by money that didn't previously exist.

Because he (and his advisers) thought it would make a good impression with his voter demographic. Sometimes the simplest answer...

Inflation is a monetary phenomenon. You cannot have inflation over a national average basket of goods unless the population on average has more money to spend. It's disingenuous to make your argument when money supply has increased as massively as it has in 2020-2022. Given the level of intellect of most MPs, I doubt there's this level of strategising going on. (This kind of thinking doesn't even happen at FTSE100 companies - any larger group of people is hindered by herd dynamics, in that its weakest members slow it down.) Also bear in mind intentionally losing a GE means losing seats, which means for MPs to intentionally lose their jobs (and for some of them their political career). Therefore I find it hard to believe that any party will be acting any other way than to win the most elections possible at any given time.

The substance is all the text you're choosing to not engage with.

Insolvency is only contagious if the banks are left to deal with the fallout themselves. We know already that the FED/FDIC step in to absorb most of the losses (see SVB, SB and FRB). What will be interesting is if we have another tranche of failures, how that affects the debt ceiling (as any gov bail-ins/outs will be Treasury backed, the FED can only offer monetary stimulus measures). The big banks are the pickiest in choosing their creditors, and small-medium loans are often too high risk/low reward (for the effort) for the too big to fail (TBTF) banks. Regional banks take on the smaller, local loans, which make up bulk of loans to the SME tranche of the economy. If regional banks are all absorbed by the TBTF, it'll starve the smaller borrowers of credit access in the short term (until the gap has been filled somehow). Credit contraction is deflationary - but in large inflationary tailwinds, it's hard to draw that bottom line conclusion. (My bet would be stagflation, i.e. this contributing to lowered, but still high, inflation, but ultimately much more harmful to economic growth)

We're the testing ground for CBDC. Sunak is of the WEF as well.

The news here is that the debt ceiling has become a topic much more quickly than was generally anticipated.

This is not about executing math, but understanding the concept the math is modelling. Your calculation isn't wrong. But you're doing the wrong calculation and using it to come to a conclusion that isn't universally true. You're right that without increasing leverage there's only one way a levered asset market can go over time. But there's a subset of potential buyers (those who weren't at the limit of their purchasing power) that are still able to eke out some more leverage. I.e. buying smaller for the same money & extending duration. Wealth doesn't prescribe intelligence. And a dumb beast learns slowly.

Enjoying the discussion on Real GDP - all I know is if you use older methods of measuring inflation (or your personal inflation metrics) it is indeed hard to believe we're not in recession. The average Briton can be spending more, even if it means more overall poverty at the left tail of the income/wealth distribution. The distribution isn't linear, but exponential. (Median £34k, Average £40k household income). This is 2022, for example: Just as House Price Inflation manifest on the marginal purchase, where it only takes one person to buy the product for it's price to be set for the entire street, it only takes a subset of the total supermarket purchasers to buy Lurpak at £7 instead of £4 for the supermarket to decide that they can charge £7. The rest of potential demand then distributed into substitute/alternative products and non-purchases (and a subset of the latter would likely end up at the food bank).

You're wrong because you wrote something that's nonsense. Again, read previous posts instead of making up something I didn't say: Or keep deflecting and trying to have the last word - it's the same to me. I think after the thorough indoctrination of the British people over the past 3-4 decades that house prices always rise over the long term, it'll take a while of continuous price stagnation/falls before that behaviour manifests on average.

I agree, but the stat's don't lie (or do they?). https://www.ons.gov.uk/economy/grossdomesticproductgdp Which is not nice, but how many more is that than normal - and more importantly how is it causally linked to inflation? Because if you look at the below, it looks more like the trend is continuing as it was before even Covid hit, impacted for a year by government bungs.

Strawman, read my post from Tuesday 3:03 again. You're trying to be right when you're wrong - that's what's going on here.