Did 10 percent inflation happen during 2020 without us noticing?

One of the miracles of 2020 was that the U.S. government could borrow/print money like crazy in response to coronapanic and yet inflation, as calculated by the U.S. government, did not go up.

But what if inflation did happen and we just didn’t notice because we were locked down and prevented from leaving the U.S.?

Here’s the USD versus the Euro:

A dollar was worth 0.92 euro a year ago. As of February 15, 2021 it is worth 11 percent less, 0.82 euro.

How about versus the yen?

The USD is down from 110 to 105 in yen.

The USD is down against gold and silver. On February 15, 2020 they cost $1583 and $18. On February 15, 2021 it took $1819 to buy the same ounce of gold and $28 to buy the same ounce of silver.

Is it fair to say that we’ve had 10 percent inflation over the last 12 months?

10 thoughts on “Did 10 percent inflation happen during 2020 without us noticing?

  1. The S&P is about 20% higher today than a year ago. Pretty unlikely that the value of US companies has increased by 20% over the last 12 months.

    • A lot of firms on the S&P also compete against small and medium firms. The pandemic killed off a lot of their competition.

  2. Inflation is the perfect form of wealth redistribution. It reduces the wealth of all of us schlubs on W2 income while those who derive their support from the government via entitlement programs lose nothing. It also hurts those who are trying to save money (“new money”) more than those who have established wealth stored away in the form of things whose value will track with inflation. So it’s a win-win for our wealthy, old-money politicians who can keep their status as the elite while inflating away the middle class until we all end up on government benefits, just like the socialist paradise they’ve long dreamed of.

    • You absolutely nailed it. The whole corona scam pandemic is about elites exploiting an opportunity for more wealth redistribution. There is no other rational explanation.

  3. In New York City. take-out food prices have gone up considerably and continuosly. McDonald’s is no longer a cheap place to eat. Rents have not gone down despite lots of people leaving the city (not quite inflation, but one would expect prices to fall with decreased demand).

    I’m not even sure if anyone even knows how to define the money supply anymore, with financial instruments becoming increasingly complex, speculative, and only tangentially involved in real economic activity.

    Finance, Insurance, and Real Estate (FIRE), are an increasingly large part of our economy, which is inefficient and counter-intuitive, since these sectors are meant to facilitate real economic benefit — Now FIRE has become an end, rather than a means.

  4. On the other side, fuel and food prices did not go up dramatically in 2020 comparing to 2008 – 2016, although some imported food items did probably go up

  5. Yup. Same thing happened in the wake of the 2008 stimulus as well. At least in California, all the stuff one buys got noticeably more expensive. A coke is now $3.50 at almost any restaurant and it’s not hard to find a $16 sandwich.
    I had wondered why all my stocks and mutual funds are up after this disastrous year. They aren’t, they’re just dollar denominated.

    • $3.50 coke in restaurant is not a measure of sector inflation, it is measure of costs of running restaurant business in CA

  6. I don’t have the analysis to back it up, but subjectively I agree. I don’t know how the government comes up with its numbers with a straight face. It’s like they’re reaching their goal by ignoring what is happening.

  7. It was quite easy to find $18 + sandwich in in Manhattan dely15 years ago, and any edible sandwich was $10 + back than. What Anonymous mentioned, regular trips to supermarket revealed no rise in prices except on few exotic fruit imported items and not by much in 2020. That’s because fuel prices were kept low, despite supply pressures of coronavirus. Recently @philg displayed picture of $2.99/lb stake, you can not go cheaper then that. Milk and egg prices rose tremendously through Obama administration, and I believe that will start climbing again: visually fuel prices rose by over 20% this month according to my drive today, and it is before most of the office workers resume daily driving. Fuel prices will go through the roof when coronavirus lockdowns are over, due to Biden admin policies, and will drag food prices along up. Plus there is no measurable addition to rate of price inflation in new consumer vehicles sales: new year models add regular under $1000 to nee car price.

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