Thread by @ideafaktory

Officially, inflation is 1.5%, below the Fed's 2% target.

In reality, some assets, esp financial ones & homes, are ballooning, as are some cherry-picked commodities, but not the overall commodities index.

What's going on...?
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There are several ways govt measures CPI (Consumer Price Index), which is the price of a "basket" of goods tracked across time.
bls.gov/cpi/overview.h…

The official calculation is controversial because it excludes energy & food. There's also lots of issues w/housing calculation.

Also, there was a secret bipartisan effort in the 80's to underreport inflation & lower official CPI as a stealth cut to entitlements (social security, medicare, medicaid), which are tied to inflation.

You can hear @EricRWeinstein discuss this on his latest @joerogan appearance.

Bottom line is, the data is out there. BLS reports all versions of CPI but only uses one officially.
bls.gov/cpi/overview.h…

I think ⬆️ inflation is likely from the vast printing of $'s to fund stimulus, infrastructure & health bills. The real tell will be in treasury yields...

So far, we've been able to keep interest rates & payments low. But as total debt & currency creation rise, so does our risk as a borrower.

If interest on our debt go up by as little as 1-2%, at current levels, interest payments can devour a huge chunk of federal spending.

To cover rising debt payments, we'll likely print more $'s rather than default. Either way, we end up in some sort of inflation spiral and a substantially weaker dollar.

This will hurt savers, help borrowers (more cheap $s to repay debts) & help what exports we have.

This would also empower China as an alternate currency provider, if they can maintain greater stability & convince investors, oil producing nations to replace $s w/RNB.

Crypto may also play a role of it is viewed as a stable alternative states can't manipulate.

If inflation is likely, this is a good time to borrow & buy investment property or a home. You'll repay w/abundant, cheap future $s.

Also a good time to own appreciating physical assets (land, collectibles), gold, stocks and (gulp) maybe Bitcoin.

If you enjoyed this thread, share & follow @ideafaktory for more futurism+innovation+economics+culture+wisecracks.

And get The McFuture newsletter/podcast at
stevefaktor.com/newsletter

The Bitcoin-as-Chinese-financial-weapon conversation is inseparable from the dollar-devaluation one.

As w/Covid, an outside enemy may be targeting us, but what steps can we take to make its job easier or harder? It's vaccine+lockdowns vs treadmill+salad.
bloomberg.com/news/articles/…

Hopefully, this is how it plays out.

https://twitter.com/Claudia_Sahm/status/1380843169043132417

👆🏻👆🏻👆🏻

https://twitter.com/TheStalwart/status/1381948369837436937

Don't worry, you will not notice rising food prices as long as you ignore the extra air and fillers in your favorite food packages.