What were the changes in your health insurance premiums(employer+employee)/deductible/oop max?
As an example, my parents’ deductible went from $3,450 to $6k, monthly premium from $1,137 to $1,232 between 2020 and 2021.
My expenses consistently go up quite a bit, far more than any government number. Both for my businesses and at home. My taxes also reliably go up more than CPI figures. Land has especially gone up.
Also, if you were planning on purchasing a home in any popular area of the past 10+ years, the lack of price increase in food or tech would have been meaningless in the face of land price increases.
Edit: The land problem is a thing also difficult to capture since amortized across entire country. Moreover, it's not Singapore in the USA, the land price problem points to various inefficiencies rather some kind of intrinsic supply/real value problem.
The price of milk or flights is irrelevant to me when the houses I’m looking at purchase go up a few hundred thousand.
Also, the person doesn’t really understand monetary policy or macroeconomics — inflation is measured by changes in the price of a currency. M1 only measures supply. The other half of the price equation (that is missing from this chart) is the demand of the currency.
Measuring the money supply is a trivial matter - if we observe a radical change in the money supply which correlates to asset price increases it's reasonable to question if our understanding of the economy is correct.
This may be in actionable information even if you buy the argument however. Holding assets while they inflate is the best move and at 0% interest rates there is no alternative to holding assets.
The M2 is growing because interest rates are dropping. But interest rates are at 0, so they can't drop anymore. So there is reason to believe that we can not sustain our current trajectory any longer.
Interest rates are not at zero [0], and interest rates, and their targets, can go negative. [1]
[0] target range is currently 0-0.25%, actual is 0.08%: https://apps.newyorkfed.org/markets/autorates/fed%20funds
[1] https://www.investopedia.com/terms/n/negative-interest-rate-...
They are interest rates and since they are essentially risk free, they ought to be roughly the floor of interest rates that aren't being subsidized by some other consideration.
> The 10 year is currently at 1% and the 30 year at 2%.
I would argue that 1% and 2% are even more clearly greater than 0% than is 0.08% (the recent effective federal funds rate), so that just reinforces the point, to the extent one agrees that they are the relevant interest rates, that interest rates are not currently at 0.
Presume a person with assets sees information like this and in combination with other factors causes them to agree a dramatic market pullback (on the scale of last year's but worse) is likely and soon.
The next logical step would be to enjoy all of the gains so far and sell out from the risk of the drop, and even after a nominal loss of value rebuy.
What I've seen is rather than deal with what that might require, people will present the above argument. They may refer you to 1973's "A Random Walk down Wall Street," or bring up capital gains taxes.
But what they will not do is confront the cognitive dissonance they're feeling between their own sense that something is wrong with the market and that they are in a position to take great advantage of a drop but will not.
My next logical step would be to assume the government will do whatever is necessary to pump those equity values back up, just like they did last year in Mar/Apr.
So unless you think you can time it so that you sell when asset prices drop, and buy before the government pumps them back up, the logical step would be to stay the course, and keep your wealth in inflation resistant broad market indices.
All other things equal, unless they start burning money I expect prices to grow or remain stable.
My current portfolio is, say, 30 times my yearly living expenses. All I care about is that it will continue to grow in a way that stays at/above this ratio, so I will be able to retire early.
The pace at which my yearly expenses inflate is much more correlated to CPI than money supply. My expenses haven’t changed much between 2019, 2020 and 2021 (projected), despite the large money printing, and my consumption pattern has been the same.
So, why should I care? Genuine question.