http://www.shadowstats.com/alternate_data/inflation-charts

Edit: found this quote from the creator of Shadowstats that they don’t actually calculate their own inflation numbers, but instead add a fudge factor to the official numbers. http://econbrowser.com/archives/2008/10/shadowstats_res

very easy to lie with stats sometimes.

New products, better products, many old products replaced by new ones... it’s so much more complicated than the classical economics textbook case of guns & butter.

I’m struggling a bit with this. Isn’t “inflation” defined as the state where prices for the same good keep going up?

It seems to me you’re focused quite narrowly on currency inflation, which like you point out isn’t that much of a concern for the average American. What they care about is inflating prices of the things necessary for a decent living: food, housing, utilities, clothing, etc. “I have to do more work to afford the same things”. Colloquially, that’s the fear most people are referring to when they discuss “inflation”. Maybe people who have actually lived through inflationary spirals think of it differently though.

Belt-and-Road has a decent chance of succeeding here, imo.

Definitions: There are two sources of demand for USD. One is the ability to purchase oil, and the other is organized international crime. I would consider crime a fair-weather investor, so the big demand for USD is really based on the ability to purchase oil.

First, examine the history of shipping tonnage [1]. Observe how quickly Chinese ports have come to dominate all world shipping. This is representative of the general trend of global supply chains coming under the centralized control of the Chinese government. Nothing presently happening in the US will improve our trade balance in the near term.

Second, examine the beneficiaries of belt-and-road [2]. All of these countries will have an incentive to have reserves of CNY. Some of these countries are significant oil exporters. If oil exporters start hoarding and regularly trading in CNY, then it's a small stretch for, at least some of them, to start trading oil for CNY.

Third, since oil is fungible, any nations trading oil for CNY will peg oil to the Yuan in addition to the Dollar.

Fourth, the governments of some nations, notably Iran, publicly believe that petro-dollars have motivated the government of the US to engage in warfare in and near their countries. They are furthermore publicly opposed to this, and publicly supportive of China ousting US hegemony.

Then, my argument. Belt-and-road gives a large number of nations a reason to hold and trade in CNY. It's a small stretch for some of those nations to start trading CNY for oil as well. Belt-and-road nations will have an expanded connection to the Chinese military, and success of belt-and-road is a face-saving issue for the Chinese government. That means efforts to oppose it could spark military tensions with the Chinese. This makes it plausible that wars to preserve petro-dollars are unlikely to succeed in belt-and-road nations.

There is almost no international demand for USD to acquire US produced goods or labor. This means USD is unlikely to succeed in an environment where it has to compete with CNY as a reserve currency for oil.

[1] https://en.wikipedia.org/wiki/List_of_busiest_ports_by_cargo...

[2] https://en.wikipedia.org/wiki/Belt_and_Road_Initiative

However, how can you say there is little demand for USD for US produced goods or labor?

https://en.wikipedia.org/wiki/List_of_countries_by_exports

The US has a higher nominal export value of any country except China. Both economies are not highly dependent on exports, but their economies are so huge that they still dwarf the next highest countries on the list.

I guess I'd say that while we export a lot, we import even more. We have a trade deficit with all of our largest trading partners.

https://worldpopulationreview.com/country-rankings/us-trade-...

This is possible only because of the general demand for dollars. If the demand for trade with the US was based only on our goods and services, then we couldn't import as much as we do. If demand for dollars dried up, then our spending would be constrained and our quality of life would drop. So I think, anyway.

Also, fiat currencies can fluctuate against each other and still go down as a group. The Dollar can get “stronger” by losing value slower than other currencies. From a straight-forward point of view, wealth is denominated in dollars. But in reality, it’s denominated in value, in good things you can buy.

By this definion, we’re all richer than Crassus in some ways, affording things like global connectivity and vaccines with ease. In land, gold, and influence old Crassus was still in a league of his own, however.

What of the nearly 40% of Americans that can't cover a surprise $400 expense, due to having no wealth?

https://www.cato.org/blog/it-true-40-americans-cant-handle-4...

The survey actually states, "Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money." https://www.federalreserve.gov/publications/2018-economic-we...

Nevertheless, that doesn't strike me as having wealth.

I borrow money all the time when I could easily pay cash. Credit is more convenient and doesn't cost me anything. Similarly, I have a car loan even though I could have paid cash for the car. It is sensible finance.

Similarly, I put all of my daily expenses on credit. I pay off all of that credit at the end of the month. I am still borrowing money but I am paying no interest on it.

The problem is that it's impossible to tell what's actually going on due to this survey design. For example: what is the overlap between the set of people who check "just pay it out of checking/savings" (50%) and the set of people who check "charge it and pay off in full at the end of the month" (36%)? I would rate both answers as "these people have the $400 on hand". The fraction of people who checked at least one of these options is somewhere between 50% and 86%, depending on how much overlap there is. And you can't tell, from this survey, where it lies in that range.

Similarly, you can't actually conclude the "Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money" thing from these numbers, so the executive summary is rather misleading. Politifact takes that summary as an accurate summary of the survey results, but it doesn't seem to be. As far as I can tell, that 40% comes from adding up non-mutually-exclusive percentages. It's the equivalent of claiming that 86% of people would just pay it off based on the above 50% and 36% numbers.

I should also note that the survey included full-time students under "adults", and if I had an unexpected $400 expense at various points as a student I would have absolutely had to borrow money to cover it. Looking around briefly, there are ~20 million full-time college students in the US as of 2020, which is ~6% of adults. While it would obviously better if college students had larger cash cushions, a college student borrowing money from parents to pay $400 is not the mental image most people have when reading the executive summary here...

Now the fact that no matter how you slice these survey results no fewer than 8%, and maybe up to 50% of non-college-student adults don't have $400 on hand if they need it is still a significant problem from my point of view. Especially because I really doubt it's as low as the 8% option. But I am also quite certain it's nowhere close to 40%....

The report plainly states:

> When faced with a hypothetical expense of only $400, 59 percent of adults in 2017 say they could easily cover it, using entirely cash, savings, or a credit card paid off at the next statement (referred to, altogether, as "cash or its equivalent") https://www.federalreserve.gov/publications/2018-economic-we...

The 4 in 10 comes from the very next paragraph of the report:

> Among the remaining 4 in 10 adults who would have more difficulty covering such an expense... https://www.federalreserve.gov/publications/2018-economic-we...

and, from the very next figure in the report, none of the 4 in 10 would use "cash or its equivalent" to cover such an expense. https://www.federalreserve.gov/publications/2018-economic-we...

From this data, it is reasonable to conclude that "Four in 10 adults would not use 'cash, savings, or a credit card paid off at the next statement' to cover such an expense."

What I don't understand is what the report bases this claim on. The actual questions asked and answers given that correspond to the conclusions you link to are presented in https://www.federalreserve.gov/publications/2018-appendix-a-... and https://www.federalreserve.gov/publications/2018-appendix-b-... respectively, and the only questions I see that involve the $400 bit is are EF3, EF5B, and EF6B.

Now it's possible that there is additional data that they have but are not presenting in the appendix but are using to generate their conclusions, including data like how many people marked both "pay with cash" and "pay with credit card now, pay off at next statement". If that's the case, I wish that data were actually available.

For example, given the "could easily cover it, using entirely cash, savings, or a credit card paid off at the next statement" phrasing it's not clear to me how they code someone who checks both "pay cash" and "borrow from family". Are they included in the 41% or the 59%? Or were there just 0 such respondents so this is irrelevant?

I would love to trust that people are drawing the right conclusions from their data, but would really prefer that raw data were published so the conclusions can be indepedently verified...