CPI

fan_of_hakiksexydays

I don't think you've been following any of the latest data. CPI is down, and lower than expected. GDP wasn't down as much in Q2 as it was in Q1. We've had more jobs added, and unemployment down. That's the prefect recipe for Fed softening the rates.

BuyRackTurk

> social security aren't complaining I know people on SS and the do in fact complain just fine. Why do you think they are not complaining? Financial advisors are pretty clear about the failings of SS, its not a secret. The political reality is that there is little they can do about it because of the young/old deadlock and the political impossibility of fixing it. > Also you never addressed why economists don't complain more about the CPI inaccuracies Thats a good test to separate actual economists from political hack keynesians. the latter are better known as bureaucrats or officials, since what they do had no scientific or mathematical validity. > macroeconomics Ah, the famous keynesian field which has never once predicted anything successfully? > calculating things like the poverty line? What good is calculating a subjective line?

LieutenantZucc

What’s so new about it? Is it the fact that it targets CPI? If so, I’d recommend FPI, Frax Finance’s stablecoin. It seems much more reputable and actually targets the current CPI rather than the 2019 rate.

altaccount1943

So basically you think the reason people on social security aren't complaining about the inaccuracies of CPI is because they're worried if they do they'll be demanding too much and the program will get shut down? Is that the same reason unions who's wages are tied to CPI don't complain about the inaccuracies? Also you never addressed why economists don't complain more about the CPI inaccuracies > For sensing supply chain changes, you can simply look at prices of the thing you actually buy. Are you aware of something called macroeconomics? Where you might want to study the economy as a whole and not just what you personally want to buy. Like how is just looking at monetary inflation that useful if you want to see if the costs of goods are increasing for calculating things like the poverty line?

Aerocryptic

CPI is different from M2 growth. Btc has proven to be a good hedge against the latest one

Python-Token-Sol

thats not the only metric lmao holy crap dude lay off the drugs and move on, good luck and start to actually invest you poser leave me alone and go seek therapy CPI is a metric for the federal govt to decide where the economy stands, Yikes please go see a therapist and leave me alone.

riddled_with_errors

CPI numbers for July where lower than for June. So the rate of inflation is now lower than it was. Aka, at the moment, the rate of inflation has peaked.

jakekick1999

Everyone was happy with CPI being same in US Looks like the next bear market will be starting in the EU and UK

riddled_with_errors

Consumer data? I know CPI's been released. Is this shopping habbits etc?

pkrmtg

You know Divisia M4 is negative, right? And CPI was flat month over month for June? With money supply shrinking, what's the case for inflation staying at 8 percent for a few years?

Python-Token-Sol

who is talking about CPI? i think you are responding to the wrong person lol CPI is a small piece of the puzzle to an overall indicator to the economy.

coinfeeds-bot

tldr; UK's Consumer Prices Index (CPI) has surged to a 40-year high of 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said. The inflation rate is higher than the 9.8% figure expected by most economists and represents a further squeeze on people's pockets. Food prices were the biggest driver of the latest hike, with annual inflation for these items now running at 12.7%. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

rendyanthony

You need to short sell CPI. It's going down.

BrianS911

Well let's see usually when we get bad numbers from everywhere CPI inflation in the UK you would figure that the market would go down but nope here we go it goes up what a morning to wake up to tezos did some shit overnight I'm surprised the valued didn't drop off everybody's holding their shit

oopssomething

Too late to buy CPI?

FacundoGabrielGuzman

Bullish on CPI. To the moon 🚀 🚀

bemyking

CPI July 2021: 5.4% CPI August 2021: 5.3% CPI September 2021: 5.4% CPI October 2021: 6.2% CPI November 2021: 6.8% CPI December 2021: 7.0% CPI January 2022: 7.5% CPI February 2022: 7.9% CPI March 2022: 8.5%

guyincognito121

Yes. bear market coz CPI!!! We smrt!/slolsmh

confusedguy1212

I’m the biggest fan for crypto but this guy just spews utter bullshit out of his mouth, backed by nothing and passes it on as gospel truth. If the world was awash with dollars right now, the dollar wouldn’t be higher than just about every currency out there. The world is structurally short on dollars. That’s putting aside the question of where the dollar is going and what CPI numbers are worth.

XBB32

Leverage shouldn't exist... And you don't short on CPI info releasing... Market is schyzophrenic... It can go up or down without any reason. Unless you like casino.

altaccount1943

> Well its a policy decision, of course its trusted. If I say that i will treat the moon like it is made of cheese, then there is no reason to distrust me. That doesnt make the moon into cheese in reality, but the way I treat it is under my control. This doesn't make any sense, no one's taking the government at it's word just because it acts as if CPI is a measurement of inflation. Plenty of economists study inflation to see if there's any flaws in CPI, and not every economists agrees with every aspect of how CPI is calculated. Some have even developed their own measures of inflation to compare to CPI, yet CPI still remains widely trusted even with all this scrutiny. And there's tons of incentives to find any issues with CPI, tons of people's income is determined in part due to CPI, if it was really as flawed as you make it out to be why wouldn't unions and those on social security not be outraged over it's inaccuracies? > Correct. If there is a failure of the watermelon crop, you should expect watermelon prices to go up. Crying about it or expecting the government to conjure magic watermelons from alternative dimensions is just stupid. Do you not realize there's more reasons to care about inflation than just to get the government to do something about it? If people have to spend a consider amount of money more to get the same things that's very important to know. It can impact economic growth, poverty, investments, and all sorts of other things. It's extremely important to know the rate of inflation and has a huge impact on people when it changes, if you think it's unimportant you need to learn more about economics.

chris_ut

Last 2 CPI Prints the white house front ran with talking points about how “it looks bad but its not as bad as it looks”. This time they were silent. That was your clue cpi would come in under and market would pump. You obviously do not have enough experience in the market to be making these types of trades.

dilscoop

The CPI numbers were high but it was lower than the forecast (8.5% vs 8.7%). That's all you needed to know to long that bitch

InstructionGuilty250

Let me tell you as a short seller myself . Don’t ever trade on a high leverage when an event like the CPI will happen the same day. I’ve seen many scenarios where it goes high up and down and up again , it will liquidate you. And another tip , when you go high leverage you have to take profit asap because it’s not a swing trade . Anyways good luck

businessbusinessman

Eh there are some economic outcomes where it happens as well, but I agree its sensationalist nonsense. CPI is manipulated, but the odds of some hyper inflation event in a modern country are decently low. It's not completely impossible, but it sure as shit isn't something i'd bet on, let alone pretend is a certainty to push some angle.

fan_of_hakiksexydays

However, the asset failed to continue upwards Except it did, and managed to go above $25K for a while. Going as high as $25,211 on binance. You also didn't mention anything about stocks going higher. -CPI for inflation being down, and even dropping lower than expected. -Oil prices plunging. Crude oil was down to $85 today. -Home prices beginning to drop, and in many cities, rent is also starting to drop. -The supply chain continuing its recovery. -Consumer spending still up. -Unemployment still low, and still more jobs added last month. I don't know how we're gonna be able to continue a bear market, when things are recovering, stocks are getting fueled by all the improving numbers, and everyone who wanted to panic sell, has already panic sold their coins during the crashes.

CryptocalEnvelopment

Every other CPI report had the same result this year, what made you think this would be different?

SexandPork

I am fairly confident that he is talking about the June CPI print that came out in July, which was worse than expected. I am inferring this from the PA he described after the event. I regularly day trade CPI prints so I remember it clearly. I got faked out by the initial dump same as op but unlike them I had a SL order at just better than breakeven

SexandPork

I am fairly confident that he is talking about the CPI print that came out on July, which was worse than expected. I am inferring this from the PA he described after the event.

maxgmblr

You basically imply that markets were irrational when pumped on the recent CPI release. Why you think so? Why should have markets dumped on that CPI release? Cuz inflation is high? Sire it’s high, everyone knows that. The CPI actually was better than the expectation, and showed the first improvement month-over-month. I’d suggest you study some more stuff about how markets react.

pkrmtg

See this paper from Brookings [here](https://www.brookings.edu/wp-content/uploads/2018/07/Moulton-report-v2.pdf), which evaluates inflation measurement 20 years after the report of the [Boskin Commission](https://en.wikipedia.org/wiki/Boskin_Commission) (see also [here](https://www.nber.org/system/files/working_papers/w12311/w12311.pdf) for another paper discussing the various sources of bias in the CPI and evaluating the work of the Commission). The inflation overestimation issue is an international one and the problem is likely worse in other countries: see [here](https://cepr.org/voxeu/columns/how-bad-deflation-japan) for a discussion of why the Bank of Japan's statistics are even more badly affected. For a more radical take, see Len Nakamura [here](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3717187), who argues that years after the GFC but before covid, where inflation was consistently positive but under the Fed's 2% target, were actually years of deflation and the overestimation of inflation has dramatically increased over the last few decades due to a flood of free and incredibly popular consumer goods, and the growing importance of intangible assets across the economy.

energetic-dad

So what measure of inflation do you suggest economists look at? I keep hearing about how the CPI is "bullshit" but it's literally just a measure of how much a basket of goods has increased in price. How specifically is it "overly manipulated"? Or were you just told that it's manipulated and have long since internalized that as fact? There's the [Producers Price Index](https://www.bls.gov/ppi/), and the [Personal Consumptions Expenditures Index](https://www.bea.gov/data/personal-consumption-expenditures-price-index), so there are a few besides the CPI out there that economists use to evaluate inflation. Curious to know what you think should replace CPI.

energetic-dad

You're like the first person on this sub to acknowledge the CPI captures more than just the impact of monetary policy. Kudos to you for that, in any case.

lethalasian

CPI data was pretty good this month...

Masterpayne22

Trading on CPI projections alone is risk. The markets are forward-looking. CPI data tends to be priced in. The press conference is when we really have to hold on to our butts. A dovish or hawkish tone will influence how the market reacts.

Ljmac1

Buddy you shorted ETH on CPI data but totally ignored how bullish The Merge news was going to be from sounds of it. You never even mentioned it in your comment that’s why ETH and ETH alts are up so much

pkrmtg

This is simply not true. CPI is actually consistently overestimated by at least a percentage point, largely due to inadequate adjustments for improvements in the quality of goods and services. Huge sectors of the economy, like healthcare, are simply assumed to have NO quality improvements at all for the purposes of CPI simply because figuring out an appropriate quality adjustment method is thought too difficult! Fortunately it's not like healthcare is an important part of the economy or anything.... Another major contributor to CPI overestimation are free digital services, which (sarcasm alert) it's not like anyone ever uses on a large scale....

TheFrenchAreComin

swing trades like trading on CPI numbers is meant for short term. Like you should be out within 1-2 hours max. Every hour after that the market moves on to new news

Mr_P_Nissaurus

Fuck CPI because it is a bullshit, overly-manipulated number.

altaccount1943

> they fudge the numbers so hard its impossible to take it seriously as a datapoint and in reality its little more than a policy announcement. Just because you don't understand or don't agree with the changes to the CPI doesn't mean they're fudging the numbers. There's a reason it's so widely trusted > Supply and demand changes are irrelevant and unimportant. No matter how supply or demand change, they will be reflected fairly in prices. So basically if prices go up because of supply shock that's fine and unimportant because the free market fairly created that inflation? I'm sure that will be a huge relief to everyone paying higher prices to know the free market fairly decided those prices will be higher

lordofming-rises

I lost 70 Percent as well because just before the CPI it dipped and my long position got fucked then I opened a short one and got also rekt. I have to say not I just decided I play with a little of my money wiht leverage and I open both short and long position but with a larger spread. My short position is -30% and my long is +6% ( yeah I really am dumb) . But I am doing bot trading so I hope on long term my short position will be ok or otherwise my long position will have more gains than my short position liquidation. On UNFI I did that and my short position gets liquidated at 15.5 dol , there is still some margin so I will not close it . its fuck you money anyway

jamesbitcoin

The biggest lesson you should have learnt is that markets are forward looking. Everyone thought CPI would be shit, if it had been just as shit as you and everyone else had thought, what do you think would have happened? Probably nothing as it was priced in. The fact it was slightly less bad than expected is why the markets went up. The markets are acting rationally to the news, not irrationally.

GSEDAN

that's funny, I went the another way and bought the dips the night before expecting CPI rate to be better than expected. Instantly made 20% that next morning.

energetic-dad

You didn't answer my question. Let me restate: How can CPI detect the difference between a (1) temporary price spike caused by a shortage and (2) a price increase due to devalued currency? If your answer is "it can't", then I agree.

partymsl

Also according to old CPI we would be closer to a 20% inflation and a 70 year high. But I guess they like to redefine stuff a lot.

wontonforevuh

The markets weren't irrational. You just misunderstood what they were expecting. CPI report last month was good compared to expectations.

Olskoolah

BTC now lower than the morning of the CPI report last week.

dajohns1420

Any professional trader would say students and amatuers should not trade CPI days.

chuck_portis

*Traders have a saying "Markets can remain irrational longer than you can remain solvent". The (initial) trade made sense but the market didn't care.* You're taking the wrong lesson here. Your play was wrong. Your analysis was wrong. You were using a backward-looking indicator (June CPI) to dictate market direction in mid July. If you looked at commodity prices, you would have noticed they peaked hard in mid June and crashed down by the end of the month and into July. The commodity crash indicated that inflation really peaked in mid June and had likely been declining ever since. The smart money was waiting for signs of peak inflation to re-enter the market. The signs were confirmed in the July CPI print with a lower-than-expected 8.5% print.

Rude_Man_Who_Shushes

You didn’t lose 30% because of the CPI report, you lost because you entered without a defined trade plan. You left it up to greed and hogs get slaughtered.

BuyRackTurk

> Does the CPI, the commonly used and understood measure of inflation The CPI is little more than a government tool that says whatever the banks want it to say. they fudge the numbers so hard its impossible to take it seriously as a datapoint and in reality its little more than a policy announcement. > Or does it also capture price increases from a change in supply and demand? Supply and demand changes are irrelevant and unimportant. No matter how supply or demand change, they will be reflected fairly in prices. People who try to hide theft inside of supply and demand changes are highly dishonest. The money supply is the only important part of inflation and/or deflation, because that is the dominant long term determinants of pricing distortions, and a direct fallout of theft from the public. Bankers blaming inflation on supply chain problems are like burglars blaming their burglaries on the weather; they are desperate for everyone to ignore the obvious. "The complexity of burglary makes it more overwhelming. Not even experts know whats causing these invasions, or how to stop them. We are not wired to deal with this." Says man in skimask holding a bag of your stuff.

energetic-dad

Does the CPI, the commonly used and understood measure of inflation, only capture price increases from money printing? Or does it *also* capture price increases from a change in supply and demand? I think the point of this statement about the complexity of inflation is addressing that point... that some price increases are from the devaluating of our dollar, and some is caused by not enough supply or too much demand. A shortage in new cars, for example, led to massive price increases in used cars. I would argue that used car inflation (as measured in the CPI) captures more than only the effect of money printing.

savage-dragon

You're in university so no you don't know a lot about economics. First rule is to know that you know nothing. This market eats alive billionaires like 3 Arrows and Celsius like it's a piece of bacon in front of an American, do you seriously think you know "a lot" about anything compared to those guys who literally used to trade for a living? Also on what fucking planet do you think pro traders even trade based on CPI releases save for short term volatile swings ? This market prices things in the future, jot the past. So a bad CPI release is actually for the previous months but pro traders are always looking at the CURRENT data to predict the CPI release for the next month, if they even trade on CPI reveals like that. No wonder why you lose money and still fail to condense your lessons into something useful. If you keep trading on CPI reveals like you did, that's the same as the buy high sell low strategy, so keep doing that and keep wonder why markets confuse you and your "a lot" of economics knowledge.

Kilv3r

When the analysis and the rest of the universe were expecting the CPI at 8.7% what made you think you know better? Like you went ham… no joke… did Michael Burry rubbed off on you?

KAX1107

Old CPI used to be based on comparing the relative price of a fixed basket of goods and services. It used to be known as cost of goods index (COGI). It was changed from that to cost of living index (COLI) which is basically government arbitrarily deciding what are the essentials to maintain a standard of living. Because of this we never get the real inflation figure anymore and government can manipulate COLI to report lowest possible CPI.

KAX1107

Old CPI used to be based on comparing the relative price of a fixed basket of goods and services. It used to be known as cost of goods index (COGI). It was changed from that to cost of living index (COLI) which is basically government arbitrarily deciding what are the essentials to maintain a standard of living. Because of this we never get the real inflation figure anymore and government can manipulate COLI to report lowest possible CPI.

MrArtless

This post is so cringe for a number of reasons. First of all you clearly know absolutely nothing about economics. Secondly, the CPI report was actually better than expected, which is why the marker ripped. Third, even if the report had been worse than expected, the market was so oversold on high timeframes and sellers had been so losing ground, so we likely would have ripped anyway. Fourth, "within minutes the price absolutely tanked" is also incredibly cringe because the market literally always whipsaws around after a CPI report whether it's good or bad. You're a child who should stay in school and not lose money trading markets you don't understand.

marsangelo

Even the more experienced traders ive seen have opted to stay out of trading FOMC/CPI, no shame in taking that loss. Leverage is frightening enough as it is

cryptotrigs

Volt is making a coin pegged to inflation. Current CPI, but expanding to a global index soon. Reserve protocol is making a non-fiat based system for stablecoins. Silk is pegged to an index of assets, not any one single fiat. RAI is a nonpegged stablecoin. Ohm is still building a nonpegged stable reserve currency that eventually stablecoins will peg to instead of Fiat, similar Reserve but with a different approach. I'm sure there are countless others. It's not that nobody is doing it. It's not easy or simple tho. Dunno why ppl think 'why don't we just do this one simple thing to make everything better'. Did you even search to see if anyone was doing your idea? There's already researchers trying to make 'E-Stablecoin' which would be minted by producing 1kw of energy. So you're not wrong that non-fiat based stablecoins are not only are necessary, but imminent. But it's not unusual that we've started with Fiat pegged stablecoins. The entire point of Fiat pegged stablecoins is that they are the first on-chain real-world asset. We haven't successfully brought much else on-chain from the real world. It's a necessary first step for adoption. Hold on to your moons, we're getting there!

cryptoripto123

> I used to follow this strategy! But bitcoin works better. It shouldn't be one or the other. It should be both. No one can predict the future, but for now a 401k-type solution has been tried and true for retirement. Retirement isn't where you risk YOLO gambles. That's why safety nets exist with Social Security and why 401k funds are generally not giving you the option to put everything in GME. >Now, maybe you mean put some in your IRA and invest some in a more "liquid" fund. But there's a sizable penalty to take those monies out. How do I know that an ETF will be worth taking out in 1, 2, or 5 years? If I'm saving for a house, I have a 5 year time frame. Would a $10,000 investment in VTSAX in 2017 have beaten inflation, especially after the capital gains loss? (Honest question.) With Roth IRAs you can pull out the principal with no penalty. With [laddering](https://www.investopedia.com/how-roth-conversion-ladder-works-5214808) you can plan for early retirement too, which works well for your house situation. However, I generally wouldn't think about liquidating IRAs and 401ks for a house unless you have to. Taxable brokerage accounts can be used in this case. You can backtest portfolios, and a [2017 portfolio would have grown 75% by today](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2017&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Stocks%2FBonds+%2860%2F40%29&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=80&symbol2=VBMFX&allocation2_1=20). If you tax the gains at 15%, leaving you with ~$6375, or about 64% rate of return. Inflation adjusted is a little harder to calculate but there's a toggle there showing that even pre-tax you should be up 43%, so taxing those gains you should still be ahead of inflation. >But there is one assumption here that your argument relies on: the accuracy of CPI. Supposedly, inflation is 8.5% yoy. Yet we all know prices have gone up more than that. It's impossible to tell, because there are confounding variables: As prices go up, people spend less. This means gdp goes down, which means inflation goes down. I would focus less on the emotions of what inflation feels like and CPI is still a more trusted number. It's done formulaicly and it looks at population averages. No one person's personal inflation rate will be exactly 8.5%. Some may be higher, some will be lower, but random sites like Shadowstats simply adding a fudge factor can easily be proven wrong too. If you truly think Shadowstats is correct, you can back-calculate what grocery prices were in 1982 and see that their numbers are to tally wrong. There are [tons of tests](https://www.thestreet.com/economonitor/emerging-markets/deconstructing-shadowstats-why-is-it-so-loved-by-its-followers-but-scorned-by-economists) that are done to look at how prices supposedly inflated 10x from 1982 to 2015 to show that it's simply false.

AreYaHoldingSon

Some counter points (I'm on mobile so apologies if the formatting sucks) - "not doing any better" is debatable. And it's still better than "doing worse" - Inflation percentage most go by lags since its a comparison of CPI values 12 months apart. Even if prices didn't move anymore ever again, it would take another 12 months for the indicator to go to 0%. - no real counterpoint on unemployment; low unemployment can even be bad - there is no rule to how long a bear market has to last. - even if 18 months was a rule, we're in the middle of that; most of the damage had been dome by this point last time - the halving was a coincidence. The 2021 bull run wasn't just in crypto, it affected stocks too, and had been brewing before the stimulus checks.

DemandUtopia

Building on your discussion about how cheap cars used to be, [here is an article from 2019 about according to the BLS, there has been no car inflation since 1996](https://wolfstreet.com/2019/02/13/sticker-shock-prices-of-new-cars-trucks-flat-for-22-years-says-cpi-even-as-the-price-of-a-taurus-jumps-55/): > A new 2019 Ford Taurus, with a sticker price “starting at” $27,800, is a better car in myriad ways than a new 1996 Taurus was at the time, with a sticker price “starting at” $17,995: quality, equipment, performance, comfort, safety, etc. In other words, the model has gotten a lot better over the 22 years, and the price has surged by 55%. So far so good. And this is typical for all models that have existed this long. > But today, the Bureau of Labor Statistics, when it released its Consumer Price Index (CPI), explained that prices of new vehicles, per its CPI for new vehicles, showed 0% inflation in January compared to January a year ago, and that in fact, confusingly, prices have been essentially flat over the past 22 years. > [...] > These adjustments that bring down CPI include “hedonic quality adjustments.” They’re not a secret. The Bureau of Labor Statistics explains how they’re derived for new vehicles > [...] > Hedonic quality adjustments are also applied to other items, such as consumer electronics. Conceptually, they make sense. The smartphone today is an incomparably more capable device than a cellphone was in 1996. > And I get that. There is just no comparison between a 1996 Taurus when it was new, and a 2019 Taurus. At every level, today’s vehicle is far superior, and there is a price attached to these improvements. But I can no longer buy a new 1996 Taurus for $17,995. That choice doesn’t exist.

jg_333

I used to follow this strategy! But bitcoin works better. As you rightly noted, to take advantage of Bogle's strategy, I need to put my money away for a very long time. But how do I know that I will live until I'm 65? Or how do I know that I can actually enjoy that money at that time? If money is "to exchange and purchase things with," then, when I invest, I've lost that and traded it for something else, which means I have to play by someone else's rules. With bitcoin, it's my money and I can use it when I want. True, bitcoin is also a long game. But the difference is I am not constrained by regulations. I don't have some arbitrary maximum that I can put away, and I don't have an age limit. When I'm ready, I take out my money and transact. There could be capital gains there, but what if I use my bitcoin as currency, and buy p2p? Now, maybe you mean put some in your IRA and invest some in a more "liquid" fund. But there's a sizable penalty to take those monies out. How do I know that an ETF will be worth taking out in 1, 2, or 5 years? If I'm saving for a house, I have a 5 year time frame. Would a $10,000 investment in VTSAX in 2017 have beaten inflation, especially after the capital gains loss? (Honest question.) Again, this is partly true with bitcoin. But bitcoin has grown more than, say, vtsax. So while there has been volatility this year, would it have been better to invest in vtsax or to buy bitcoin? Take any 2- year time frame; can it be done? But there is one assumption here that your argument relies on: the accuracy of CPI. Supposedly, inflation is 8.5% yoy. Yet we all know prices have gone up more than that. It's impossible to tell, because there are confounding variables: As prices go up, people spend less. This means gdp goes down, which means inflation goes down. Besides leading to the decay of Civilization itself, it also means that your investments are worth less. How much less? I don't know. And that's part of the problem!

formal-explorer-2718

> there are insufficient constraints on issuing more debt You mean insufficient constraints on borrowing? The Fed sets interest rates and lending standards to constrain borrowing as much as necessary to target 2% medium term CPI inflation. > A gold standard, for example, imposes natural constraints on debt creation. Why? Gold borrowing is only limited by the demand for Gold-denominated bonds. This is also what limits USD borrowing: if demand for USD assets declines, the Fed raises interest rates or otherwise restricts borrowing to get inflation back on target. > The implication in your statement is that bitcoin will "moon" forever I intended to imply that it would be *at risk* of mooning forever, not that it would actually moon forever. > but you left out "moons in terms of what" You are right: I meant moon in terms of *the goods, services in the economy*, for example as approximated by the CPI. For example, companies who borrow USD care if USD moons relative to the goods and services they produce. > This is because you don't care about Venezuelan Bolivars Exactly, I care about real goods and services. > old money gradually falls out of favor due to its tendency toward hyperinflation I agree that USD hyperinflation would lead people to seek alternative units of account for contracts. > it is traded more often because speculation no longer has a premium Yet Gold and many stocks are widely traded yet are still relatively volatile. Using an fixed-supply asset to denominate debts can actually make it more volatile, because debtors now have to buy a fixed amount of the asset regardless of its market value. If the asset starts to moon, it can create a positive feedback loop: a short squeeze / debt deflation. This was an issue on the Gold standard and led to the Government actively intervening to stabilize Gold (with questionable success) and ultimately banning most private Gold ownership altogether. > They will gradually fall out of favor over many decades, perhaps even centuries for the aforementioned reasons. Makes sense, I'll believe it when I see it. > it will fall out of favor and bitcoin will continue to grow in adoption and saturate more of the market The market for what?

ClementineMoney

>People have borrowing since antiquity. Why is borrowing in USD worse than borrowing using any other unit of account? If someone borrows too much, I don't see how that is USD's fault. Borrowing is fine, useful, and not the problem. Debt burdens become unsustainable under a fiat system because there are insufficient constraints on issuing more debt. A gold standard, for example, imposes natural constraints on debt creation. >What does cause unsustainable debt burdens (along with a bunch of other problems) is when people borrow in a unit of account that moons. One of the purposes of the Fed is to ensure that USD don't moon. The implication in your statement is that bitcoin will "moon" forever making it unsuitable as a currency in which to denominate debt, but you left out "moons in terms of *what*". To illustrate further why this is a fallacy, consider that the dollar has basically "mooned" forever in terms of Venezuelan Bolivars, but debt is denominated in dollars all the time. This is because you don't care about Venezuelan Bolivars, because it's small enough to not matter to you. While it's difficult to imagine, the same may very well happen one day with the money you are accustomed to today (dollars). When new money kicks out old money, it doesn't usually happen quickly. During the transition phase, old money gradually falls out of favor due to its tendency toward hyperinflation, while new money becomes less volatile and more stable as more of the economy adopts it. Once this happens, it is traded more often because speculation no longer has a premium, and it becomes used for debt contracts. >What do you think will happen to USD-denominated contracts? They will gradually fall out of favor over many decades, perhaps even centuries for the aforementioned reasons. >Don't you think businesses which produce real goods and services would rather borrow and denominate contracts using a CPI-pegged stablecoin than an unpredictable fixed-supply asset? People and businesses are already free to denominate contracts using just about any financial asset, but USD remains the most widely used. Yes right now and for the near to medium-term future, people will likely continue to issue debt predominantly in terms of USD due to its massive network effects. Over the longer term, as USD trends toward hyperinflation, it will fall out of favor and bitcoin will continue to grow in adoption and saturate more of the market.

formal-explorer-2718

> such as inflation How is this a long term cost? The performance of USD assets is a function of real interest rates. > unsustainable debt burdens People have borrowing since antiquity. Why is borrowing in USD worse than borrowing using any other unit of account? If someone borrows too much, I don't see how that is USD's fault. What does cause unsustainable debt burdens (along with a bunch of other problems) is when people borrow in a unit of account that moons. One of the purposes of the Fed is to ensure that USD don't moon. > fiat will become, at best, a cultural vestige of a prior era What do you think will happen to USD-denominated contracts? Don't you think businesses who produce real goods and services would rather borrow and denominate contracts using a CPI-pegged stablecoin than an unpredictable fixed-supply asset? People and businesses are already free to denominate contracts using just about any financial asset, but USD remains the most widely used.

shoufutong

CPI is bullshit...my grocery and gas bill doubled since last year. 10% my ass.

fan_of_hakiksexydays

Yet another post where bears are trying to find a dump that doesn't exist. And now they even have to make up arguments, because the actual data doesn't support their narrative anymore. -CPI data on inflation has shown better than expecred improvement. -Fed rate will likely be reduced on that better CPI data. -GDP has slowed its drop, and is likely to return positive. -Consumer spending is still up. -Home prices are cooling off, and rent prices have started to drop in many cities. -The supply chain is continuing its recovery. -Unemployment has been lower than expected. -Stocks are going back up. -Oil prices are plunging. Positively improving all causes of the recession. But every week it's always "next week it will definitely dump back into oblivion"

greenappletree

Even int the US it was more like inflation didn’t grow CPI was 8.5%

Kilv3r

*“SPOT is a perpetual wrapper that abstracts AMPL's supply volatility from holders. It's price will be similar to AMPL (which targets the CPI adjusted 2019 dollar). The asset can function as both a refuge from volatility and a refuge from inflation”*. Care to elaborate on this?

CallingVoid

The operating system runs on an SD card which is not ideal for robustness, they also struggle with some of the CPI intensive tasks like validation of blocks. Not to mention running a software package someone else manages the updates for and integrates is kinda against the ethos of bitcoin being trustless. Still, if you opt for that route then a raspi4 isn't a disaster for running a lightning node on, just make sure you keep the seed backed up and your channel.backup file regularly backed up in several safe locations. When bitcoin core releases a new version don't just blindly update it, find out what the update does and decide if you want it or not. If you are buying a pi from scratch you can often pickup and ex office desktop for a similar price and run that as a lightning node. It will cope with the demands of a 24/7 server better (though it will use more energy). Your choice.

YaboiDK38

I was honestly just thinking about selling the news because shortly after the merge were gonna get cpi and then a rate hike. If CPI decides to come out higher than 8.5% then there's gonna be a big dump because everyone's losing there mind thinking we've seen peak inflation.

Python-Token-Sol

sir sir no one has a magic 8 ball, it's ok to predict the markets especially if you do your D&D, try picking up the financial times or wall street journal ? follow CPI reports month to month? have a schedule and figure out when the Feds have meetings ? i'm sorry I do this 6 times a day 12 hours a day. I just dont read taglines and skip 15 - 20 min articles, I'm also a swing trader and i keep a trading journal, i'm not here to invest to loose money and assume shit like you, i try everyday to make an educated guess by doing proper D&D, does it mean i'm right ? hell no because i dont have a magic 8 ball, i'm not Ms. Cleo so relax but if your going to disagree with someone do actual research, this is a crypto winter. Save my comments come back 12 months from now and prove me wrong ? i mean i hope i will be wrong good luck to you smart ass.

Gold5nMonk5y

after the CPI report we will probably slowly pump for a month or so and see if inflation gets better.

Giga79

The same way you maintain any peg. Ideally *over* collateralization. So to mint $100 of our $1 stablecoin "$CPI" you must put up $200 collateral. Any time your collateral drops **to** the value amount of tokens you've minted your position is liquidated. So if you use $200 ETH as collateral to mint $100 and the price of ETH drops by half, the protocol auto sells your ETH and closes your loan leaving you with $100 in stable you minted by selling $100 of ETH. 1=1 New CPI numbers are out and it's gone up 10%. This breaks our peg since its market value is $1 when it *should be* $1.10. Now to mint $100 of our CPI coin you need $220 of collateral. The people who minted $100 before are $20 closer to liquidation if they don't add more collateral. When someone *redeems* $CPI they'd get the adjusted 1.10 CPI rate for it, instead of 1.00 market rate. This works because of over collateralization. Basically you'd put $200 of collateral in to receive $100 $CPI, CPI raises which reduces your loan collateral ratio, you redeem 100 coins for $110, and get back $190 of collateral. The net effect is the same, $200 in $200 out. But now the market value of $CPI will inch 10% higher because anyone can redeem 1.00 for 1.10 in the interim. Arbitrage traders have incentive to buy market and redeem all the way until market is back to peg. The people who mint $CPI are delta neutral, they shouldn't be earning or losing money in this scheme, and are only able to generate income by secondary LP/lending/leverage (or legal tax avoidance) opportunities. Arbitrage traders pay high liquidity fees to incentivize $CPI *minters* to provide any. Finally $CPI *holders* don't get hit by inflation which is probably worth *some* fee toward the LP/loan-provider/minter too. It's a house of cards but I think it would work.. Barring we don't enter hyper inflation anytime soon. The same concept is what's keeping that Shrimp stablecoin pegged, or RAI right now. It's just a lot more stable to have your stablecoin backed by collateral that never liquidates or needs to be topped up, but it will be destined to fail if it requires banks/gov permission to achieve it by using *their coin* as your collateral. Some +/- few percent volitility *some* times I think is a good compromise if it means removing the banks and all the risk they bring.

seguleh25

The prices of goods against each other will always change. That's why you'd want to use an index like CPI

Giga79

https://medium.com/coinmonks/the-emerging-hybrid-class-of-stablecoins-to-combat-inflation-c0add5600743 You may find this article of interest. Some stablecoins already have these properties. Volt, FPI, I'm sure others. I even saw a stablecoin pegged to the price of *Shrimp* yesterday. There's no reason people can't peg them to any other arbitrary number like CPI.

Big-Argument-2792

There is no way Ether is going back to 1k. The merge is happening soon and we are seeing the sentiment changing. Next CPI report will be lower.

Bitcoin__Hodler

>CPI is manipulated to create the lowest possible inflation number." Amen.

UCFSam

Pretty crazy volume out of nowhere, in the middle of the night, on a weekend. More volume than during pump during the CPI release earlier in the week. (looking at coinbase pro)

fan_of_hakiksexydays

Ah...the weekly "next week we're gonna see a sell-off" or "watch out, next week is gonna be a bloodbath". We had big warnings like that the week before Fed rate hikes, tech earnings, CPI, GDP, and each of those weeks we ended up pumping instead.

rb109544

Facing multiple crashes in the stock market, housing, and jeez just about everything. Will be volatile thru EOY especially with the Fed making up CPI and PPI to look lower. The first step to recovery is admitting there is a problem...

bobbyv137

If the ‘merge’ fails, and CPI goes back up, and the Fed raises by 75 again or more, September could be apocalyptic.

Yoloballsdeep

A. He did everything he could to slow down domestic oil production B. Things aren't stabilizing. Just because the CPI went down a notch due to oil prices going down, food prices and cost of living are still extremely high. CPI number fluctuations happened all through 2021 yet here we are now at 8.5 with no signs of the inflation subsiding

bobbyv137

Your flight is 2 days after the next CPI report is released. And days before the next Fomc meeting.

formal-explorer-2718

> Prolonged high inflation, national currency debasement Why would this hurt people without BTC? Plenty people who have Bitcoin are long USD, and plenty of people who don't have Bitcoin are short USD. You are free to be long, neutral, short USD regardless of your Bitcoin position. You can short USD against a wide variety of collateral. > Regret: Watching Bitcoin go past the moon, knowing they had a chance to be on board They also had a chance to buy all kinds of assets that mooned. Amazon and Tesla stock are good examples. > Reaching old age without enough (or any) retirement savings Why are you assuming that people who don't buy Bitcoin don't have retirement savings? Plenty of people choose to save for retirement using a different portfolio of assets. > Central banks will roll out their "new" money It's a different form of the same money. > Bankers, not elected officials will run the CBDC money The Fed already runs USD though. The Fed's job is to ensure that USD's market value targets ~2% medium term CPI inflation so that people with USD-denominated contracts (debts, salaries, rents, deferred payments, refunds, lines of credit, insurance policies, taxes, annuities, etc.) know what to expect. > How much you are allowed to be paid How? Companies are free to pay you using whatever unit of account and whatever medium of exchange you both agree to, so long as you pay your taxes. What leads you to believe that a CBDC would have anything to do with the Government implementing a salary cap? Wouldn't it make more sense for the Government to just raise taxes more on higher earners, like they did during the post-WWII period? > From whom you are allowed to be paid What does this have to do with a CBDC? If the Government wanted to do this, they'd have to ban/demonetize physical cash and also ban all non-USD media of exchange. This could already be achieved with the current banking system; many people already rarely use cash. > Where you are allowed to spend What do you think would happen to credit card? Are you imagining *all transactions* would be required to go through the CBDC? > Whether you're allowed to participate in the economy at all (suppose you said something on-line and they didn't like it, like this post I'm typing, for example) The Government can already do this. It's called putting you in jail. > CDBC money will have expiration dates. For example, spend it within 9 weeks or lose it. So then don't store value using the CBDC? There's plenty of other assets you can store value in. What CBDC proposal would do this? > they'll banish from the economy with the click of a button. They can *already* banish you from the economy with the click of a button. Are you familiar with the Patriot Act and the criminal justice system? > Do you want to be stuck in such a situation? No, but I have no idea how you got all that from a CBDC. > Without owning Bitcoin, people will be trapped. How so? Are you assuming all they would own is the crappy CBDC you are envisioning?

bells_88

Crypto is a risk asset. This pump is because CPI in the USA was slightly lower than expected, so the hope is that interest rates will not have to be raised as much as expected. That's it. Crypto is correlated with Nasdaq 100. There is a lot of pain ahead for risk assets

formal-explorer-2718

> Bitcoin is an alternative to central banking. How so? In the US, central banking's primary job is to ensure that the market value of USD stays pegged to 2% medium term CPI inflation so that participants in USD-denominated contracts can know what to expect. These contracts include debts, salaries, rents, deferred payments, refunds, insurance policies, annuities, lines of credit, taxes, court orders, stock options, B2B supply contracts, etc.

jrym44

Hahaha all the sad bears saying is a bull trap is delusional. Keep crying and missing out on these easy profits. They still dont understand we're in a bull market lmao the recession/CPI/Fed rates didnt even do shit to us

tarpex

Well I'm gonna play the devil's advocate here and my inner bear looking at the numbers more in detail, they actually weren't good. The only thing that pulled the headline number down was due to the drop in oil prices. Everything else was quite concerning, especially in core CPI. What's even more concerning is that the market seems to be fighting the Fed at this time - which is one of the two biggest "commandments" of the markets; "this time is different are the four most dangerous words in investing" and "don't fight the Fed". One after another the Fed officials come out and reiterate that despite the drop, inflation is way too high, labor market way too hot, that a convincing, long term downtrend in inflation must be observed before they think about thinking about thinking about pausing or even cutting rates, yet the markets are betting that they're full of shit and will succumb to the political pressures and severely lessen the intensity of rate hikes. If next months' CPI numbers don't show a further substantial decline (and looking at the commodities market, which has been creeping up again), papa Jerome will piledrive this market like Randy fucking Savage. Gotta keep one's eyes peeled because this can turn into a complete disaster really quickly. I hope that's not the case, but I'm ready for it nonetheless.

TheTreeOneFour

its already 2k ($1970 as I type this). Why is is not reasonable that it could go significantly higher within 5 weeks, particularly if the CPI numbers are favorable? Thats the whole reason we have a pump right now.

jrym44

It's a bull market lmao who the fuck cares about macro economics? We already broke through and the recession/CPI still didnt make us dip. We are bull running to 30k

TheTreeOneFour

right…but it’s pushing $2k as we speak with all of those things considered and currently going on. It’s therefore reasonable to think it would continue to pump well past this, particularly if the CPI number in September are favorable again like it was in august to cause the current mini pump we are in.

Re_LE_Vant_UN

Algos decided that our Wednesday CPI numbers were bullish. Risk-on assets ripped.

Fiddlediddle888

Probably not what people want to hear, but my thoughts are what your asking for right? I think the whole market is extremely fragile right now and there is more uncertainty than in most peoples distant memory except maybe those that lived through ww2. The stock market movement hangs on the next CPI report, and the FED is definitely using that to prevent an all out crash. There is still a lot of liquidity and demand so no one really knows how that will pan out but I do not trust this current upswing. I think something insane is probably going to happen in the next year or so, weather it be a catastrophic natural, political, or otherwise event to shake out the market. I just don't think we hit the true bottom yet. What usually happens is that the Dems take the crash then the repubs come in and "fix" the economy, rinse and repeat. I think the current FED admin will limp the economy along until right before the next election, then they'll collaborate to let it crash let the repubs be seen as fixing the economy by turning on the money printers again, and it will probably be Trump, not that I think that will be great. However, I do think there is significant chance Trump will run and win in 2024 which will probably cause the whole economy to skyrocket, which coincidently coincides with the next halvening, so there you go for a time frame.

Ilogy

Saying inflation is caused by money printing and nothing else is like saying the price of teddy bears is caused by how many teddy bears have been produced and nothing else. No, there has to be actual demand for those Teddy Bears to produce price. Price is a combination of supply AND demand. That is just as true with money as it is with teddy bears. When M2 currency is "printed," it is exchanged for new debt that is also "printed." Banks create money whenever they make a loan. This means that all new supply of currency is matched with new demand for that currency in the form of debt. The reason inflation occurs---whether that is asset inflation or CPI---is because of the time lag between new supply coming into circulation, and the due dates of the newly generated loans, such that there is temporarily more supply than demand. As loans become due, demand begins to catch up with supply, and potentially surpass it, which is why the system requires a constant flow of new lending in order to remain stable and not go into a deflationary collapse. This temporary supply/demand imbalance can be lengthened through lower interest rates, which causes loans to be less onerous, easily refinanced, repaid more slowly, and makes borrowing attractive which keeps the loans flowing. All of this keeps demand for currency low while supply increases. During economic crisis, when banks shut their doors to new lending, low interest rates are not sufficient---particularly if they were already low to begin with---and deflation kicks in as demand for currency outweighs the supply. This occurred during the Great Depression. It is during these situations that central banks are meant to act as lenders of last resort (though they failed in that regard during the GD), which means they either lend indirectly through commercial bank intermediaries, or they buy debt in large amounts in order to force commercial banks to lend to borrowers in order to resell the debt to central banks at a profit. If the money supply outpaces demand to such an extent that you end up with too much consumer price inflation, on the other hand, central banks can raise interest rates which forces borrowers to pay back their loans sooner, and thereby removes currency from circulation, reducing supply. It makes it more difficult to borrow money, thereby slowing the pace of loan creation and consequently the pace of new money issuance. And higher interest rates also increases demand for currency as more people need to acquire it quickly in order to repay their loans. By decreasing supply, and increasing demand, higher interest rates can bring the supply and demand back into balance. The problem with this system is due to the exponential deflationary pressures caused by technological progress and globalization on productivity. This causes the costs of goods and services to become cheaper and cheaper, which forces central banks to lower interest rates more and more in order to maintain 2% inflation (a problem that becomes difficult once interest rates hit 0%). The greater the productivity gains, the more the money supply must grow in order to offset falling prices. That increased money supply drives up the prices of goods and services, as well as asset prices. But unlike goods and services, asset prices are not being offset by deflationary pressures from productivity gains. This causes assets to inflate, while the things ordinary people buy simply remain stable (with some slight inflation), which causes the economic divide to widen between the rich and everyone else, and causes political instability. Of course, one asset that benefits greatly from asset inflation is bitcoin, which is why bitcoin is ultimately driven by deflation, not inflation. (I want to thank Jeff Booth for this insight.) Some people are of the opinion that we are undergoing a radical de-globalization post-covid, which will cause productivity gains from globalization to disappear. They also argue that demographics in the 21st century is highly inflationary, as people have less kids and societies fail to repopulate. Many also argue that climate change is highly inflationary, as it causes greater scarcity of commodities, resources, and food. These people expect that we have entered a new paradigm in which inflation will become the norm. I'm not convinced of that. I think people are severely underestimating the exponential nature of technology, and the explosion of productivity A.I. and other technologies are going to bring to the equation. I expect the 21st century to be even more globalized than the 20th century, not less. Regardless, if deflation becomes stronger, fiat currency cannot survive in its current form, and is detrimental to the health of society. The amount of money printing required to keep prices stable, the zero bound of interest rates, and the inability for the fiat system to redistribute the value of the productivity gains to all of society and not just the rich (without depending on government to do so which is riddled with corruption, waste, and too much socialism for a healthy democracy), means that we need a new monetary system that is capable of keeping pace with deflation while also distributing the gains of progress to all of society.

energetic-dad

I know, and the CPI captures many of these costs. I was simply explaining to you how it is quite clear that certain components of the CPI have increased in price due to changes in supply and demand, not by a reduction of purchasing power.

energetic-dad

> But people are now conflating increase gas price with inflation. They always have, as long as the CPI has been calculated based on a basket of goods. What metric measures only the "pure" inflation you are speaking of?

energetic-dad

The way most people understand inflation is the CPI. That captures the increase of prices for *any* reason. There is no metric that I am aware of that only captures the reduction in purchasing power.

energetic-dad

He's exactly right. The CPI captures price increases from both supply and demand and monetary inflation. Used car prices have been driven up due to a shortage of new cars. That has nothing to do with printing money.