Posted on 02/19/2014 6:04:43 AM PST by IBD editorial writer
Economy: Food and energy prices are rising, wages are flat and the top concern among Americans is unemployment. What was that word coined in the '70s to describe a stagnant economy suffering inflationary pressures?
Since the Obama "recovery" started 4-1/2 years ago, inflation appears to have been relatively tame, with core prices climbing just 7% from June 2009 to December 2013.
But as CBS News discovered when it looked a little closer, the overall number is deceptive. In fact, it found food prices soaring.
The official inflation data confirm this. Overall, food prices are up 9% since June 2009, according to the Bureau of Labor Statistics. And the cost of many staples is skyrocketing. Pork prices have climbed 14%; poultry is up 12%; eggs, 27%; milk, 20%.
Meanwhile, energy prices have climbed 18% during the recovery, and the price of gasoline is up a whopping 31.5%. Then there's college tuition, up 23%.
At the same time, wages aren't budging...
(Excerpt) Read more at news.investors.com ...
The title suggests this is some future possibility? Sorry IBD, but it’s already here.
Not as dramatic, but yes.
Human nature and the basic fundamental economic forces are always present, even if you choose to ignore them as this administration does.
Oh, and let’s double down by increasing the minimum wage while we’re at it.....
This country and the world are on the verge of so many new developments the likes of which will completely change (in some ways scary too) the way we live and produce goods and services.
From machine 2 machine communications (the internet of everything, see CalAmp - "CAMP"), to agriculture, robotics, biotech (Baker Bros, the leading biotech hedge fund, earned a whopping 120% return last year and over 700% plus for the last 3 years), oil and gas development from fracking, 3-D printing, etc, etc, etc.
Time to resurrect Carter’s ‘Misery Index”.
I don’t know where people get the idea that inflation is a sign or a cause of economic growth.
When an economy is booming, there is a lot of demand for certain items. So prices rise. The higher prices cause more supply to be encouraged.
Take housing in North Dakota. The economy is booming and housing is expensive.
That is a free market at work.
Now, when prices rise because of energy costs and gov’t burdens on businesses, that is a different source of inflation.
Higher prices encourage more supply, which decreases the upward price pressure, and may even reduce prices.
Inflation is a monetary event, caused by too much of a given currency chasing the same quantity of goods and services. The real price does not go up, just the nominal one. You get or give more currency units for the same value - in goods and services. It does not encourage more supply because the cost of producing the supply increases and the profit decreases.
Obama aspires to first place in all negatives. Since Jimmy Carter had a higher misery index than Obama has reached, yet, I’m sure Obama is working to take first place. Similarly, Buchanan’s mistakes led to a full Civil War, and Obama is not averse to trampling fundamental human rights in ways that may provoke serious nationwide problems.
If inflation were measured in the fashion it was in the 70s, inflation would NOT be low.
And there are the repeated broadcasts for weeks saying that the Fed will tighten up, although that hasn’t happened, yet. Expect interest rates to go up before long, if any of that’s true. It’s all been brewing since the early ‘70s.
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