Oddbean

"so what's the real inflation rate? it's a vector right it's not a scalar a scalar is like two percent, no it's not it's like an n-dimensional vector and there's a different inflation rate for everything in every place for every time period dynamically evolving right? Once you understand that you realize that there's probably two inflation rates of interest one inflation rate is the rate at which uh cost of living is going up for a middle-class family that's not the CPI because the CPI is a manipulated market basket set by a politician or a bureaucrat" #Inflation #Bitcoin

Have you listened to Eric Weinstein talk about this? He echoes similar points - essentially cpi is a BS quantity (scalar) when inflation should be represented more like a vector field. It’s like saying the average temperature in the United States is 52 degrees. What does I even do with that information if I live in Montana? A weather map with information dependent on location is a much better description. He discusses it in his most recent conversation with Chris Williamson. If that interests you then I will look for the time stamp.

It’s even worse than that, because it’s a metric-less measurement. They are literally putting out a data point that essentially says “the size of 20 inches has been changed by 2 inches.” It’s meaningless, because the very notion of attempting to measure it has no foundation. The money IS the measuring tool. Trying to use a “basket of goods” means that every single change in the market, liquidity, quality, production process, innovation in organization, energy cost, and thousands of other factors that go into those things work *against* it having any meaning at all. In short, the CPI is just flat bullshit. It works in the govt favor in almost every way. The only data point that matters is how much money did the govt or banking system counterfeit into existence. Which can’t even be easily calculated. That is the number of what was stolen from us or misallocated in the economy. Everything else is nonsense. (Analogy: the CPI is like trying to measure how far you threw a football without being able to compare it to the ground, instead you compare it to a bunch of people in the area, the leaves on the ground, the football players, cars on the road nearby, the water flowing in the creek next to the field, the clouds over head - and making the argument that if you have enough of these things, we can figure out where the ball went. Then the wind blows a little or it rains, and all of the measurements mean Jack shit in trying to make sense of what happened to the ball.)

I think that makes sense. But it seems like - and please correct me if if I’m wrong - you are equating “money printing” to inflation in consumer prices and I’m not sure that there’s a direct causation between those two things. (Money printing meaning, in part, the increase in the M2 money supply). At least that was my understanding from Jeff Snyder when he described inflation versus “money printing” and the Eurodollar. Are you familiar with his framework for inflation, the macroeconomy, and the Eurodollar?

I’m saying the opposite: They are trying to hide money printing by saying the only thing that matters is consumer prices. My argument is that the arbitrary creation of new money is the entirety of the problem, and the only thing that matters to measure.

Yeah, I think Snyder’s view is nearly opposite. Although “opposite” implies two possible answer at different ends of a spectrum and it’s not really that. Anyway, he would argue that the FED can’t “print” money. Mostly what gets “printed” ends up on bank balance sheets but doesn’t make it out into the real economy. Are you familiar with his thoughts on this? He had a discussion about this very thing at last year’s Bitcoin conference with @LynAlden .