I’m curious how long central bankers will let this go on for before they begrudgingly admit that they got it wrong. For the sake of those already made homeless, ill or dead from the current inflation I hope the central banks aren’t wrong so that their suffering wasn’t for nothing.

  • SJ_Zero@lemmy.fbxl.net
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    1 year ago

    Remember that relative to previous examples of elevated inflation, interest rates really aren’t that low. Ask a boomer about the 80s and 90s – ask them what a mortgage looked like back then. Double digit interest rates.

    The bigger problem is that the entire world was following terrible economic practices for a decade. Interest rates near 0 and super lax lending standards meant tons of bubbles in particular in housing. that’s one reason why so much housing is insanely expensive. Then, because the fundamentals of life like housing are so expensive, people need massive wages to live. Then, because people need massive wages, the price of everything goes way up.

    • assassinatedbyCIA@lemmy.worldOP
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      1 year ago

      The thing is wages haven’t really gone up. They have a little in the past two years or so but, those increases have lagged inflation so they are in fact a real wage cut.

      I do agree that the economic practices for the past decade have been terrible but, I think it just highlights the point that central banks have no idea what they are actually doing. Interest rates were at record lows following the GFC because globally growth was stagnant in advanced economies and inflation was low or non-existent. Now we just have to trust that they’re getting it right this time?

      Finally, interest rates were much higher in the 80s and 90s but, asset prices hadn’t yet been hit by the aforementioned asset bubble were in right now. The effects of rate rises are likely similar or greater than the effect that occurred in the 80s/90s.

      • SJ_Zero@lemmy.fbxl.net
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        1 year ago

        Yeah, wages have been generally stagnant since the 1970s while per capita productivity has continued to rise.

        The fact that the CPI around the world is a blatant lie doesn’t help either. Anyone who doesn’t have their butler buying groceries knows that.

        So I agree that we shouldn’t trust central banks to do the right thing. Even if you think raising interest rates is the right thing to do, they’re almost certainly going to do the wrong thing along the way anyway because they don’t work for us, they work for themselves, the governments, and the banks.

  • makingStuffForFun
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    1 year ago

    Boomers and inflation

    I hate to say it, but, it’s the boomers I’m sure. Again.

    I’m travelling Australia and working. I’m Gen X. It’s a slog, but enjoyable and a chance of a lifetime.

    Our house at home has a massive mortgage and we’re renting it out. We run at a loss on our house, as we can’t socially justify renting it at the rate it would take to break even. So we take the loss.

    But, interest rates are rising. They keep going up. People are still spending. Who are these people?

    It’s the boomers.

    On this trip I see boomer after boomer in $120K + tow vehicle, with $150k + caravan. Kitted out with everything you can imagine. Spending like crazy, and I mean like crazy, on whatever they want. Fishing rods, fishing gear, the BEST tyres for their vehicles, suspension upgrades that I can’t imagine the cost of. Meals and cafe’s every bloody day. I see them sipping their latte’s and eating carrot cake, spending $60 to $80 a night on van parks and in a discussion with one, he told me he thought even $90 a night was good value. Unbelievable. They eat at restaurants all the time and have the best of everything.

    It’s… the… BOOMERS. I hate to say it, it’s like some haunting htat never stops, but it’s true.

    They have NO mortgage. The rates don’t impact them one bit. Their extra rental properties are bringing them in more than they could have dreamed and the rest of us are getting these bogus interest rate rises, as if that will fix the problem.

    None of us, or very few of us, can spend like the boomers can, and are.

    Now, I have had them say to me “oh, we worked hard, we didn’t complain like your generation” and “we drove clapped out cars, and we finally made it”, etc. Now that is fine, good on them, but it doesn’t change the fact of what is driving this inflation.

    I read that about 25,000 new caravans a year are being sold in Australia. Add that many dodge rams and other large tow vehicles, then all the gear that goes with them. It’s insane.

    /rant over