Cyclical Prices
Remember when everyone complains about petrol cost?
It's legit a constant complaint that we see, especially here in America where everything is spread out, public transportation is ineffective, and everyone owns a car. On top of that there are people... I don't know how they do it... but there are people who commute an hour to work (or more)... every day. That's 10 hours of driving a week; 500 hours of driving a year. What a grind and heinous expense! Multiple thousands of dollars per year on fuel alone. No wonder people complain.
https://ycharts.com/indicators/us_gas_price
But as we can see here... the price of gas hasn't gone up...
In fact I moved to PA in September 2021, and the price of gas here very closely tracks the national average. The price of gas in September 2021 is almost identical to the price right now. Of course such statements cause a slew of knee-jerk reactions and Akctually responses.
What about summer 2022?
What about the 2020 bottom out?
Well first of all the crude oil cycle peaks in summer and troughs in winter.
This is just the basic supply and demand of the market.
Demand for crude oil skyrockets in summer and slows to a crawl after Christmas.
So what's the dip in April/May 2020? That was peak COVID lockdown/fear.
What happened in summer 2022? Cycle top on top of Russian sanctions.
dOn'T fORgeT WuT tHEy tOOk frOM uS
People love this shot from the movie Die Hard that show price of gas costing under 80 cents in 1988. Of course it should be obvious that this is a very disingenuous argument to make... as if to say someone could make today's wages in 1988 and buy whatever they wanted dirt cheap. Not how it works.
Point being that price of gas has way less to do with currency devaluation and way more to do with supply and demand. Currency devaluation has been a drop in the bucket compared to all the other drama surrounding this resource, up to and including infinite warfare to acquire more and power the military industrial complex itself.
Inflation is also cyclical.
People like to measure inflation in a straight line. Hell, even the FED itself does it! 2% per year target! Again, this is not how it works, especially now that the unsustainability of the debt network is catching up to itself in a big way. We are living in an era, or rather and end of an era, where the only way to keep this economy afloat is to print trillions of dollars in order to "stimulate the economy" when it's about to collapse. The last time we got one of these liquidity events was COVID when we seemed to think it was a good idea to shut down the entire world economy. Yeah that didn't work out so well.
So while it may look like crypto is struggling right now... we also haven't survived long enough to see the NEXT liquidity event. And trust me: they always get worse. The amount of money that needs to be injected balloons with the rest of the unsustainable volatility we see.
DXY
The strength of the dollar is quite high right now considering just how weak and on the brink of collapse everything is in the legacy economy. Trump has made it very clear that he wants a weak dollar and lower interest rates, but Powell has been fighting him on this. And now we see this tariff situation escalate as if to purposefully create an artificial emergency so he can get what he wants. Pretty devious if true, but I guess we'll see how it goes.
Point being that inflation can not be measured in a straight line. It happens in bursts and the full effects don't materialize for years until the money and properly circulated throughout the economy.
Even video game economies are cyclical
Buy items cheap on the weekdays and sell them high on the weekends when the people with actual jobs log in. Easy money.
Cost of food has skyrocketed!
And is that because we printed a bunch of money or is it because "bird flu" is killing all the chickens and food warehouses keep randomly blowing up? It should be obvious that a devaluation of a currency affects every product equally. The problem is that technology is constantly evolving and making it easier to produce certain items but not others. For example when is the last time you pain long distance phone bill?
Conclusion
Ultimately the economy is a total immeasurable clusterfuck. People don't like this, so they isolate one variable when trying to make a point. This is not how it works. The value of products and the value of money changes constantly on a daily basis, but we anchor the value to the currency because it is more stable than all the other assets we are measuring against.
The market cycle itself sends everything up and down over time.
Many have tried to combat the volatility.
None have succeeded.
I have a half hour commute to work one way each day and it isn't that bad. Yeah, it's five hours per week that I lose, but it's constant driving, so that is good. These people that sit in traffic for an hour plus are machines.
My commute for like 7 years was an hour and 20 minutes each way - so 2h40m every day, and since Covid and the WFH push, my commute now is 34 steps across my house and downstairs.
Oddly, there are times I miss the dedicated Podcast/Audiobook time lol... but I'd never willingly go back.
Wow, that's rough! If something happened and that's what I had to do for my family, I totally would, but it would definitely be a shift for me.
I remember listening to a podcast a while back where some dude measured the economy based on copper or something and was accurate for a lot of things. It’s one of those weird measurements because it can be relevant in some ways but utterly retarded in others.
The way we measure economic activity is also strange with GDP being the focus yet it’s a load of shit at the end of the day. I wonder do they give up in the age of AI with those silly measurements or double down and program the AI to shut up? Lol
In general, I have ignored a lot of this back-and-forth shyte in favor of looking at how many "units" (minutes, hours, days, weeks?) of labor/effort I have to put forth to get one "unit" of the basics needed to be alive today (shelter, food, healthcare, communications, etc.) without any fancy options.
And that's generally not a pretty picture, most of it due to the artificially inflated price of housing. And that — most likely — can be attributed to housing having gradually evolved from meaning "home, a place you live" to "a commodity you invest in," due to the attendant demands of higher and higher ROIs. It's also where a lot of "shadow inflation" can be found...
"But we haven't raised our rates in 10 years!" exclaim the insurance companies and the minicipalities... indeed, your premiums/assessments per $1,000 may not have changed much, but since your house valuation has gone 3x so has the actual check you have to write for insurance and property taxes.
Since there is so much "air" in property values these days, it wouldn't surprise me if we see a landslide correction there, in the not too distant future...
yeah the real estate debacle is... real
which is clearly caused by everyone using property as an investment
super inappropriate at this point
I can’t remember the name of the episode but there’s a Twilight Zone where a guy tells the attendant to fill her up and the charge is two bucks and change.
Heh. I’m old enough to remember a time in the early sixties when a gallon of gas and a pack of cigarettes were each 29¢ (and the store would sell me, a little kid, the cigarettes that my mom had sent me down the street to buy).
ha yeah I know a couple people that would buy cigarettes and maybe even alcohol for their parents.
wild times
Purchasing power has significantly declined over time.
Essentially the US Dollar is incrementally being rugged year after year with deficit spending.
In 2025 the project deficit is almost as large as the budget in 2020.
Right so now gracefully explain how this matters to someone that lives paycheck to paycheck or just doesn't otherwise hold dollars. How does a person get rugged when they don't hold the asset being rugged? The entire point of this exercise is to prove the situation is wildly oversimplified.
Effectively when I was a kid and a young adult a full shopping cart of groceries took a significantly smaller percentage of my parents and then my paycheck.
I'm old enough to remember when a high school graduate could make a payment on a car and a house and afford to have kids, without significant credit card debt.
And is that money printing or technology automating away the need for people to exist in the corporate world? Why would slow, steady, and predictable levels of theft lead to permanently lower wages?
It is far more likely that the value of a person to the economy is quite simply less.
That's probably oversimplified too, call up a plumber or a carpenter and get back to me with the quote.
I'll expand on this tomorrow. I actually went to the grocery store today and logged the prices for a variety of items - I'm considering calling it the "Cap'N Crunch Index".
Plumbers and carpenters are not the the jobs being displaced right now.
Everyone needs a job.
So what happens when 10% of the population lose their job and there are none left to fill?
We see what happens first hand: people with 10 years experience in management being told they are underqualified to work at a giftshop. Or even worse told they are "overqualified" and the job just goes to Susan's 18 year old college kid.
What do you think happens to the economy when every single truck driver in the country suddenly finds themselves out of a job due to self-driving cars and AI? Yeah, the plumbers will be just fine. Not the point. You've ironically used an oversimplification to accuse me of oversimplification. Such is the complexity of this issue.
I fat fingered post before adding "but yes you are correct, it is over simplified."
So you are saying that alts still have a chance for a come back in 2025?😅
no straight to zero straight to jail
The whole world is in recession after Covid, it will take some time before everything gets to normal. Economic hardship is crippling the regular 9-5 guy
Paying $4.20/gallon here for gas, and folks that don't buy from farmers are telling me they're paying upwards of $10/dozen eggs. I don't think there's any good new way to make chicken eggs. David Knight pointed out that the couple hundred million chickens that have been culled would each lay about 300 eggs a year. That's something like 30B less eggs hitting the market - except a layer can be replaced in ~3 months, so hey, that's only ~10B less eggs on the market.
Looks like a polycrisis to me.
Thanks!
Yeah I absolutely agree with the argument and on the conclusion
The value of money can change day by day depending on the status of the market
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