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Comment by rllearneratwork | Hacker News Reader

this is a good point. Everybody keep saying that US had a small inflation in the last 2 decades. Yes, prices of eggs/milk maybe didn't go up to0 much. But what about prices of child care, education, housing, health care, retirement. Yes all these have many factors behind their cost rise, but money printing just can't be ignored here.

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All of those things are figured into the Consumer Price Index. It's not like they're just guessing over at the Bureau of Labor Statistics.

The one thing that's not included is retirement. You're entitled to Social Security, which is inflation-indexed with the CPI.

Individual retirement accounts are usually based in the stock market, which has been doing gangbusters -- for those who can afford it. That is becoming unaffordable, and it probably is because of "money printing".

That's where the inflation shows up: asset markets. The increase the money supply but it disappears out of the consumer economy almost immediately. Consumer prices don't go up, but asset prices do.

> That's where the inflation shows up: asset markets

Because we're encouraging yield chasing in order to lower unemployment.

I apologize, but this reveals fundamental misunderstandings of how inflation is measured, and what it measures, and of how US dollars enter the economy.

Look at this post to see how many different measures of inflation there are. Each of these get at different aspects of the economy:

https://econbrowser.com/archives/2021/08/measured-inflation-...

https://econbrowser.com/archives/2021/09/inflation-a-compreh...

As for money printing. Per US law, money cannot be just printed by the Treasury. It must be borrowed from people who already had dollars to lend.

New dollars enter the economy when banks lend money; that is the main engine of new money creation, and it is responsive to the economy. Usually, banks don't lend when its too risky, and businesses don't borrow when it won't lead to profitable growth.

You can have both inflation (in terms of purchasing power) and a simultaneous decrease in the cost of goods (in constant dollar terms).

If both of these happen to balance, prices appear to stay the same.

Presumably you'd only get a true number out of something (a) with a fixed amount in circulation, (b) internationally traded, & (c) universally valued. Even precious metals are subject to production costs and industrial consumption.

The rest of the world has seen the same price increases.

In many places in Europe, four out of five items on that list are provided or managed by the state (child care, education, health care, retirement).

Which IMO explains why Europeans tend to feel more comfortable even with salaries that, on paper, are significantly lower. The American middle class is getting squeezed by this particular class of costs.

That's part of it. In most of Europe, if you want good anything, you have to pay for it. Even then, you might not get it, because the system is so benevolently "universal".

Europeans are comfortable with lower salaries because they believe they're paying taxes for the greater good. That's often not the case.

I speak from experience here and I'm sick of people putting universal healthcare and other European shit on a pedestal.

Now, butthurt Europeans and especially little angry German trolls can start downvoting, but remember, ignore something for too long and it can turn into terminal cancer.

Europe is in an even worse position than the US on debt. ECB has already had negative interest rates for the past roughly 5 years. Basically even if you don’t spend money you are losing money just like inflation, then on top of that they have inflation as well.

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