The American economy is performing exceptionally well post-pandemic, surpassing other developed countries.
There is a notable disconnect between people's perceptions of the economy and the actual economic data, leading to various theories and concerns.
Factors such as the pandemic hangover, inflation, wage discrepancies, and fiscal uncertainties contribute to the complex economic landscape, influencing consumer sentiment and political outcomes.
The article provides a different perspective on how the American economy evolved post-WW II by blending inflation concepts and looking at economic performance over different eras.
Inflation and its control play a significant role, with the article discussing the Phillips curve and the quantity theory of money in understanding economic changes.
A key trend highlighted is the rise in financial flows out of the real economy in recent decades, impacting inflation control and economic growth by shifting focus towards financial assets over productivity-enhancing capital.
Food delivery companies like Doordash may struggle to sustain growth post-lockdowns, facing challenges with profitability and expanding their customer base.
Central bank policies face challenges in balancing inflation control and market stability, leading to potential risks of speculative bubbles and volatility.
Inflation can impact investment decisions, prompting individuals to seek ways to outpace the rate of return to counter its effects.
Software companies are showing signs of a potential rebound in January based on earnings reports and early data, signaling green shoots for the industry.
January inflation, especially the CPI, was higher than expected, impacting market expectations for future rate cuts and projections for the Fed Funds rate.
Valuations for software businesses are often calculated based on multiples of revenue, with different growth rates affecting these valuations significantly.
The state's monopoly on money is motivated by the ability to generate quick revenue.
One key reason for this lasting monopoly is the state's need for emergency financing, especially during wars.
For the state to maintain the monopoly over money, it needs to commit to long-run price stability, ensuring the currency's purchasing power is preserved over time.
Inflation has been high for a while, affecting how investors view the market. People are worried it won't just go away and are trying to figure out its impact on stocks and bonds.
How we measure inflation can change depending on what we look at. What's important is how the market expects inflation to behave in the future, rather than just focusing on what's already happened.
Interest rates and inflation are closely linked. If inflation expectations rise, it can push interest rates up, and this also affects how different investments perform, particularly when inflation is unexpected.
Speculators in commodity futures markets may increase price volatility but do not have a significant long-term impact on price levels.
Rise in oil prices in 2021 and after the Russian invasion of Ukraine in February 2022 was a key driver of inflation spike in 2022 and 2023.
Study suggests that oil price spike was partially due to excessive speculation by oil traders, which in turn contributed to an increase in US inflation.
US housing has become extremely expensive, with a median single family home selling for over $400K and prices rising more than 7% annually since 2012.
If housing prices continue to rise at 7% annually, they'll nearly double in 10 years and nearly quadruple in 20 years, making homes unaffordable for many.
Treating housing as an investment has consequences, creating an underclass unable to afford homes and pushing more people into debt, cramped living situations, and even homelessness.