USD Buying Power

Brett Donnelly of Spectra Markets explains the importance of the difference between nominal and real data.

"There is no direct call to action here other than: When you are consuming economic data from now on, make sure you double check in your head whether it’s nominal or real, and what that means. The government reports most economic data in nominal terms but some data (like GDP) in real terms. It’s not apples to apples so keep that in mind.

This sort of high inflation gives me more sympathy for Austrian views of money as I can see everyone around me kind of becoming de-anchored on the whole real vs. nominal thing. We live in the nominal world, and yet each

member of society lives a unique experience as real wages and purchasing power shrink.

Much of how you experience the real vs. nominal dichotomy is arbitrary and comes down to: how rich you are, whether you’re long or short a primary residence, and whether you have bargaining power with your employer. This inflation is a massive tax on some segments and individuals, and barely noticeable to others. That seems bad to me."