Hearn: The resolution of the Bitcoin experiment [LWN.net]

Hearn: The resolution of the Bitcoin experiment

Posted Jan 18, 2016 18:57 UTC (Mon) by Wol (subscriber, #4433)
In reply to: Hearn: The resolution of the Bitcoin experiment by Cyberax
Parent article: Hearn: The resolution of the Bitcoin experiment

> > It has, according to the austrian definition of inflation. But I'm sure you will counter with the Keynesian
> >definition.

> Ah, yes. Austrian inflation is usually a GOOD thing.

What about UK inflation - as officially measured, it does not include house prices, so given that a typical house where I am (about 10 miles from the city centre) rents for £1100pm or so ($1500, per month, for a *small* three bed semi), inflation does not include the single biggest expenditure in a young person's profile. And if you move into the centre itself that probably wouldn't even get you a one-bed flat.

Surely it can't be good that we have an *un*regulated rental market, and the average house costs about TEN times the average salary ...

Cheers,
Wol

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Hearn: The resolution of the Bitcoin experiment

Posted Jan 18, 2016 19:31 UTC (Mon) by Cyberax (✭ supporter ✭, #52523) [Link] (3 responses)

> What about UK inflation - as officially measured, it does not include house prices, so given that a typical house where I am (about 10 miles from the city centre) rents for £1100pm or so ($1500, per month, for a *small* three bed semi), inflation does not include the single biggest expenditure in a young person's profile. And if you move into the centre itself that probably wouldn't even get you a one-bed flat.
Inflation includes the average price over the whole country, but it misses the localized effects.

Oh, and Austrian inflation also doesn't take localized effects into account. You can very much have skyrocketing local prices even with generalized deflation.

Hearn: The resolution of the Bitcoin experiment

Posted Jan 18, 2016 19:52 UTC (Mon) by clump (subscriber, #27801) [Link] (2 responses)

To your point, in the States, housing prices in San Francisco are very high. Inflation measurements in the States do include housing, and despite that inflation is still virtually non-existent.

Hearn: The resolution of the Bitcoin experiment

Posted Jan 19, 2016 11:03 UTC (Tue) by Wol (subscriber, #4433) [Link] (1 responses)

How easy is it for you to reduce your housing costs, by moving further away and commuting? Actually, I gather commuting in the States isn't that easy ...

The thing is, it depends how "lumpy" house prices are. Here, we may have political initiatives to address it, but the fact is that most people under 40 simply can't afford to buy their own home, ANYWHERE. Okay, it's taken maybe 30 years to do it, but, relative to income!, house prices have trebled or more even in my own adult lifetime - my original starter home is probably now way out of reach for someone in the same position I was.

Cheers,
Wol

Hearn: The resolution of the Bitcoin experiment

Posted Jan 19, 2016 16:18 UTC (Tue) by raven667 (subscriber, #5198) [Link]

> How easy is it for you to reduce your housing costs, by moving further away and commuting? Actually, I gather commuting in the States isn't that easy ...

People complain about commuting but cities in the US have built out massive road networks for commuters. Using Chicago vs. London as an example, suburbs like Joliet or Schaumburg are at least as far away as the M25 around London and there are neighborhoods going out even further, as far as Milton Keynes and Bletchley is from London, Mundelein or Libertyville are still primarily commuter homes for the greater Chicago area.

Hearn: The resolution of the Bitcoin experiment

Posted Jan 18, 2016 19:57 UTC (Mon) by rgmoore (✭ supporter ✭, #75) [Link]

What about UK inflation

The "Austrian" inflation he was talking about was as defined by the Austrian school of economics, not inflation in Austria. The Austrian school defines inflation in terms of increase in the monetary supply*, not as price inflation. It's a good, real-world example of what Thomas Kuhn was talking about when he said that people following different paradigms can't communicate with each other because they use the same term to mean different things.

*Strictly speaking, increase in the ratio of the broad monetary supply to the demand for money, so that there is no inflation if the monetary supply increases with the economy as a whole.

Hearn: The resolution of the Bitcoin experiment

Posted Jan 19, 2016 18:58 UTC (Tue) by markhb (guest, #1003) [Link]

Heh... I'm in a small city in the US (which many of the people in the country would consider "a small town in the boondocks"), which happens to be trendy at the moment. Our newspaper recently did a series and found that 2 BR w/ utilities rentals in the city were averaging nearly $1600/month. Note that that includes heat, which is important where I am. Large cities like Boston and Philadelphia are worse, and forget about the nexuses of insanity that are Manhattan and the San Francisco peninsula.