[rustcleaner]

I'm sure it applies to Xbox too, but I priced out today's PS to the PS1 and it closely follows the inflation rate that M2 has undergone.

M2 expansion is the prime driver of prices, after supply & demand. Normalize SPX, gold/silver, etc, to M2 and see that they all run in fairly horizontal channels. You can even see nominal GDP normalized to M2 having been flat initially and then transitioning into a downward sloped curve for the last few decades.

By normalizing, I mean [in TradingView] doing SYMBOL*23.16*10^12/M2SL (conceptually SYMBOL*M2SL[0]/M2SL). Most important items track close to M2's roughly 6.5%-7% annualized force of interest inflation rate (the quotient of the natural log of the ratio of price now to historical price, over the elapsed time between the prices).

7% inflation (FoI) -> wealth halflife of cash ≈ 10 years.

[kiddico]

Reading this made me question my own mental stability.

[rustcleaner]

CPI replaces steak with hamburger or chicken once steak becomes unaffordable. It understates inflation.

[inigyou]

He's basically saying the increase in prices has matched the increase in the money supply. Implying that we need to hold politicians accountable for the massive expansion in the money supply. Which is logic that's hard to fault.

Also implying that inflation is under-measured, perhaps deliberately. Which definitely seems true for anyone who's experienced inflation.

[rustcleaner]

Better stated than my ham-fisted attempt. Thank you. :^)

[ZenoArrow]

Except the increase in prices is not tied to M2 in this case. It's clearly a matter of supply not matching demand, as a result of changes in priorities of computing equipment manufacturers. You don't have to look at M2 to understand that Micron, Samsung and SK Hynix deprioritising DDR memory over HBM for AI data centres has led to the rapid increase in prices for consumer-grade RAM.

[rustcleaner]

Margins for consumer were wider vs HBM before killing Crucial, and still is today. Something else is going on...

[DarkmSparks]

Sounds about right.

"Prices double every 10 years" is a fairly standard economics benchmark.

[inigyou]

Also known as 7.2% inflation.

[DarkmSparks]

Inflation is different.

Rule 72 is nominal prices.

Inflation accounts for a 2026 xbox being significantly more advanced technology than a PS1

[inigyou]

Ah, you're right, I did forget to account for the part where the CPU being 1000x as fast means that prices actually fell 99% even though they went up 10x.