The Inflation No One is Talking About
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Inflation has been high on the news agenda due to the cost of living crisis. When you see people talking about inflation they'll almost always be talking about the rising costs of things you buy in the shops, which is retail price inflation or consumer price inflation. But what about asset price inflation? Assets have been going up for years, and faster than goods and services, so why is that rarely mentioned? UNDERSTAND, SHARE & PUSH BACK WEBSITE - garyseconomics.org TWITTER - twitter.com FACEBOOK - @garyseconomics INSTAGRAM - @garyseconomics TIKTOK - @garyseconomics YOUTUBE - youtube.com PATREON - patreon.com DISCORD - discord.gg BLUESKY - bsky.app SUBSCRIBE, SHARE & START A CONVERSATION Performed by Gary Stevenson @garyseconomics
The video begins by distinguishing asset price inflation from the more familiar shop price inflation reported in the news. The creator argues that standard inflation measures like CPI and RPI only track goods and services bought regularly, neglecting asset prices such as housing, which tend to rise faster. This omission, he contends, means we underestimate overall inflation and misjudge the real cost of living, especially for ordinary people whose living standards are squeezed as assets become more expensive. He then links the disparity to rising inequality, explaining how wealthier households invest more in assets while poorer households spend more on goods and services, which shifts demand toward assets and pushes asset prices higher relative to wages. The result, according to the analysis, is a housing affordability crisis and a pervasive sense that inflation is not being measured or addressed properly by policymakers. The video then critiques central banks for focusing on wage and goods inflation while effectively ignoring asset inflation, arguing that this inattention helps keep wages stagnant and housing prices high. The presenter outlines three main categories of inflation,goods and services, wage, and asset inflation,and claims the last two have a decisive impact on ordinary people’s living standards. He highlights the problematic dynamic where higher asset prices and stagnant wages combine to make housing unaffordable, suggesting that an effective fix must involve both wage growth and affordable housing, rather than relying solely on traditional inflation targets. The conclusion calls for shifting purchasing power toward ordinary workers, primarily by taxing wealth more and channeling resources away from the rich, to raise wages and reduce the squeeze from rising asset prices. The video ends with a call to viewers to support campaigns for policy changes and to share the message with friends and family.
Topics · economy · inflation · wealth_inequality · housing · central_banks · public_policy
Questions answered
- What is asset price inflation and how does it differ from consumer price inflation?
- Asset price inflation refers to rising prices of assets like housing and stocks, which are not captured by consumer price inflation measures such as CPI or retail price inflation that track goods and services bought regularly.
- What policy changes does the video advocate to address inflation and affordability?
- The video argues for shifting purchasing power to ordinary people by increasing wages and taxing the wealthy more, to reduce the impact of rising asset prices on living standards.