[quote=Leorocky]Inflation is the sustained increase in prices for consumer goods and services (to be brief). And not just one, or two, or three goods and services, it’s across the board.
You said “the effects of inflation (increased money supply)”. Inflation is not an increase in money supply. Inflation can certainly be a result of an increase in the money supply but is not defined by it.
Houses, stocks and bonds are capital assets; they are not consumer goods and services. Prices of these assets appreciate/depreciate typically due to factors other than and/or not related to inflation/deflation. It is incorrect to state than stocks, for example, have appreciated and to call it inflation.
By no measure that would pass muster with any credible economist has inflation been “massive” in the last several years.[/quote]
This is exactly what the problem is. People define inflation differently and then use their different definitions to argue a certain point.
At the most fundamental level inflation is an increase in the money supply relative to goods produced. Obviously in the most simple economy where there’s 100 of some type of good and 100 units of money the price of that good is 1 unit of money. If you double the supply of money and hold the number of goods at 100 then that good become 2 units of money.
CPI is the consumer price index, it’s how the fed measures inflation but it’s a flawed measured for a variety of reasons.
The fundamental issue is the fed has printed a bunch of money via bond buying programs, and that money has gone somewhere. It just has gone into asset prices that the fed doesn’t bother to look at when measuring inflation. The fed can print and spend money but it can’t determine where that money goes. That’s why we end up with asset price bubbles.