Comment by hedora
4 hours ago
In related news, diesel is $7/gallon, and peets coffee is $25/lb, and computers (hardware and cloud) are up 25-50%.
The official numbers claim 3% inflation. Does anyone actually believe that? We were seeing 30% YoY before Iran here in California.
The discrepancy is so large, I’m wondering if there’s an official explanation or some reasonable explanation, or if they’re just not bothering anymore.
so every inflation number has to be understood by following (a) when is it measuring and (b) what is it measuring. For when: a lot of economic data is lagging indicators, e.g. last quarter - and inflation is usually % more year over year, whereas a lot of people seem to care about inflation on the 2-5 year time frame instead of just 1 year. For the what - we'd have to dig into whether it's national averages, state averages, or local; what percentage of the measurement is rent vs housing prices vs groceries (and what grocery items) vs clothing vs computers vs utilities etc etc. It's very likely that the idealized basket of goods that they are measuring the cost of doesn't actually match your expenses or even the average household expenses for your area. Or possibly even, for the whole country.
The meta problem is that price data - assuming we can even reliably observe it - is super high dimensional, and we're trying to reduce it all to a single number.
Entry level Dell servers that used to cost 1,700 US are now going for 17,000!!! I'm talking absolute basics with 16GB of memory etc. Wild times.
Diesel is $5 in the Southeast, what kind of supply chain issue could cause 40% diff? Should we hire some tanker trucks and arb this?
None. But you don't put a non refined cruide oil in your diesel, it not only has to be refined but DELIVERED to your country. Depending where that country is, delivery could be even 60% of the final price. And when, you know, tankers with oil explode due to drone attacks, you will see quick large spikes in pump price.
EDIT: also, oil is a commodity traded worldwide, and downside of this is the price of oil is directed by future contracts bet on said oil. In other words, if enough people assume there will be future upticks related to raising cost of transportation insurance, they buy more futures. If they buy more of this virtual contract on price going up (called "long") then eventually real price of oil catches up. Sure, this is upside down, but markets live in this setup for many years now where tail wags the dog.
I dug up walmart ads from 8 and 16 years ago. In the first 8 years, a case of pepsi went up 5%. In the last 8 years, it went up 200%. Make of that what you will.
> We were seeing 30% YoY before Iran here in California.
We didn’t even see that across the board during the height of Covid-flation. What metrics are you using to get that number?
Food, fuel, utilities, insurance, electronics, services and digital goods.
This administration is America slitting its wrists.