Posted on 10/22/2015 8:43:19 AM PDT by Kaslin
In a world in which the Cold War is a fading memory, North Korea and Cuba endure as museums of communism, so no one will forget how criminally insane it always was. In a world haunted by the specter of persistently falling prices, some countries are creating severe inflation, so we can be grateful for its virtual disappearance.
One of the governments providing this public service is that of Venezuela, where the currency has lost so much value that even robbers reject it. A recent carjacking victim told The New York Times his armed captors had no interest in his bolivars. They only wanted to know whether he had U.S. dollars stashed somewhere.
That sort of thing happens when annual inflation is over 150 percent. Feeding a family of five for a month cost three times more in August than it did a year before. Shortages abound; black markets are proliferating; and Venezuelans find themselves bartering goods and services to get by.
The source of the malady is plain: a socialist government that has mismanaged the economy, which is also feeling the pain of falling world prices for oil, the nation's chief export. "There's been a lack of respect and understanding of the implication of money printing and excessive money creation on the economy," former International Monetary Fund official Claudio Loser told The Wall Street Journal.
The more currency that is produced the less anyone wants it. "People are literally getting rid of money faster than the government can print it," Bank of America economist Francisco Rodriguez said.
Venezuelans find that their misery has only a little company. The yearly rate in Argentina has run above 20 percent for years and is now around 30 percent. Malawi is at 24 percent. Each day, the coins and bills their citizens carry buy less than the day before.
This may be hard for Americans to imagine, given their recent experience. On average, over the past five years, the consumer price index has risen at the minimal rate of 2 percent annually, and the inflation rate hasn't reached 4 percent since 1991. Many adults have never had the dread experience of watching prices rising rapidly across the board year after year.
Their elders, who were not so lucky, retain a fear of inflation in their bone marrow. Baby boomers were raised on lurid tales of hyperinflation in 1920s Germany, when consumers had to carry piles of money in wheelbarrows to do their normal shopping. That wasn't the worst of it. The trauma, we were taught, led to the rise of Adolf Hitler.
In the 1970s, we got our own taste of it. The U.S. inflation rate soared into double digits and stayed there. A bag of groceries that cost $20 in 1972 cost $46 in 1982. The price of gold skyrocketed from $38 per ounce to $615. Not much imagination was needed to picture a sudden run on wheelbarrows.
It didn't happen, thanks to a Federal Reserve that, in the early 1980s, slammed on the brakes by raising interest rates and curbing monetary growth. Since then, inflation has stayed tame -- to the point that these days, the debate is about whether we have enough of it. Charles Evans, president of the Federal Reserve Bank of Chicago, recently argued that the central bank shouldn't raise interest rates until "we begin to see some sustained upward movement in core inflation."
That view is at odds with the demands of those Republicans who have been predicting a nasty outbreak of inflation since at least 2009. Conservatives once had to battle to get liberals to recognize the harm done by creating too much money. But rather than celebrate their victory, they keep fighting the last war. As a result, they ignore the new danger, which takes the form of deflation and slow growth.
In September, the Bureau of Labor Statistics reported that U.S. inflation over the previous year was zero. The European Union's inflation was less than zero. Japan is in the same territory. Falling commodity prices are a threat to developing countries whose economies depend on exporting raw materials. A little inflation might be a good thing for growth.
No one would have imagined a couple of decades ago that we would learn how to stop high inflation and keep it stopped. Like communism, it can still be found in a few places. But like communism, it's no longer much of a threat.
Everything we are told is a lie. I'm getting tired of it.
Yeah a pound now is 14 ounces instead of 16 but costs as much as 16 ounces if not more
https://www.ncdc.noaa.gov/sotc/drought/201507
Based on the Palmer Drought Index, severe to extreme drought affected about 14 percent of the contiguous United States as of the end of July 2015, a little less than last month. About 24 percent of the contiguous U.S. fell in the severely to extremely wet categories.
The cost of beef generally has gone through the roof, not just hamburger. Hamburger is not really the same as beef, for economic survey purposes though. About half of hamburger comes from dairy beef. Although CA is the #1 dairy state in the US, dairy production in CA is declining because of environmentalist pressure being applied to dairy farms, which, unlike nut and grape growers [and many others] have plenty of places they can move to outside of California. And they are. But it doesn't make that much difference anyway. Most dairy beef doesn't come from drought country, but from the Northeastern US and Upper midwest.
Higher beef costs across the board are a function of the cost of feed, and US energy policy is a part of that problem. It is simply INSANE to mandate the production of corn ethanol when corn is our #1 grain product. Corn cereals and sugars are used in all kinds of food, and turning good food into bad fuel drives up the price of corn and all foods and animal products.
If people aren’t getting jobs and raises and buying extra things, there will be no upward pressure on demand. Not having inflation is not necessarily a good thing.
The link has details as to what was used to calculate the prices.
------------------
| Our Price Basket - or Cost Of Living 2008 - 2014 Latest Inflation Update December 2014 Interest Rates, Housing, Food, Gas, Stamps, Dollar Exchange Rate, Dow Jones, Movie Ticket, College Tuition and Wages. We created this page to address two specific needs 1. Providing a comparison for earlier years and 2. As a means of watching how prices and wages react and the effects on inflation, prices and wages when the world comes out of the recession . As you can see we have changed the format to make it easier to read. Hope You Like the new style. To gain an idea of true inflation check 2008 prices to current with our Price Basket Graphic -- Steve As you can see from our table the overall basket of goods has increased significantly from 2008 to 2014, Our real world Price basket of goods shows an increase of over 45% from May 2008 to September 2012 far above published inflation figures and I believe reflects how the working class and the middle class have been effected by real world prices and stagnation in wages due to high unemployment, our basket is representative of the goods and services we all use and buy. Obviously different people spend on different amounts and types from our food basket dependent on multiple factors 1. Size of family, 2. Income, but we hope it offers an insight into real world inflation we are all affected by as opposed to government statistics. Our basket of goods shows a slight increase from 2013 to 2014 which could be suprising when you consider the price of Gas has decreased ( the big factor was the increase of Tide Soap Powder ) other factors including rent, taxes ( local and State ) College Tuition, Cost of a Stamp, Movie Ticket or going out for a meal all affect how much disposable income we have available |
 |
And even the fed numbers shows household income declining during the same years from $58,000 to $54,000.
As in: 
And, if they don't shrink the product, they make quantum jumps in prices - no more 5-10c at a time. A large jar of Claussen dill pickles at Wal-Mart just went from $5.68 ($5.00 six mos ago), to $6.58.
That must be why I’m having to buy same day expired hamburger. :0)
“Has he ever seen the size and thickness of a candy bar pre-1970s?”
I have, I entered first grade in 1950 and when I had a nickel I could buy a candy bar that was all I could eat. You didn’t buy a ten cent candy bar unless you were going to give half of it to someone else. I paid five cents a day for school lunch when I started school. It was only up to a quarter a day when I finished high school. Now the dollar and a quarter I paid for a week of school lunches my senior year won’t buy what used to be a five cent candy bar.
If they told the truth they would have to double or triple social security payments to make up for all the years of understating cost of living and they don’t have any money.
ok, great points on drought having no impact.
But I’m not sure ethanol is to blame here, b/c ethanol mandates haven’t gone up anywhere in a decade unless I’ve missed something?
So it may well be that the spike in beef is due to the cost of feed...but if beef is at an all time high, where is the price of corn? I can’t say I’ve followed that actually. Is it also at or near an all time high?
No inflation? Are you outta your mind? Inflation is running rampant. The last seven years are the worst I have ever seen. A Quick example. Quart of oil, 2007? 85 cents. Quart of oil 2015? $4.00.
With regards to hamburger, aren’t high beef prices the result of drought (hits supply) and increasing demand? Basically, market forces? (Sort of the flip side of oil: huge supply glut, global demand down ...b/c of the depression).
There was a major drought in the last two years, and this adversely affected beef prices. But add into that the increased cost of the stupid ethanol program. (where billions of tons of corn are turned into fuel instead of feeding animals and people)
When you take umpteen tons of corn out of the food supply chain, farmers substitute other grains to feed their livestock. This drives the price up for all grain commodities.
This not only affects the United States food prices, but thanks to commodities markets, it affects world wide food prices. I've read that the riots in Egypt were the result of people being unable to afford food due to the rise in grain prices.
I've read that the "Arab Spring" is what happens when you turn corn into fuel because stupid left wing nutjobs and crony capitalist industrial farm outfits collaborate to make government policy.
I remember the prices of some things from that time period because I used to buy them.
Milk went from $2.00/gallon to $4.00/gallon. McDonalds Burgers went from 55 cents to $1.25 nowadays.
I put inflation at nearly 100% since 2007. The price of everything has almost doubled since Idiot Man-Child took over.
Used tires in 2007 were $20.00. Now they are $40.00.
I used to eat tuna fish and crackers for breakfast several times a week. Tuna in 2007 was 50 cents. Tuna today is $0.95.
In truth rising prices are NOT inflation! In economics inflation is an increase in the amount of currency in circulation. Think of inflating a tire, pumping air into the tire is inflation, the fact that the car may be seen to rise slightly higher above the ground is the result of inflation. Likewise rising prices are the result of inflation, not inflation itself but prices may rise for other reasons. If some prices are going up and some down as we have had lately there may be inflation or there may not be. Prices may rise or fall due to a supply/demand change but if prices in general are rising it is most likely due to monetary inflation. Monetary deflation should cause most prices to fall.
What the government has done for years is to tailor the method of calculating cost of living to produce a lower official inflation rate without much regard for reality. Younger people are easier to fool with that kind of trickery, those who, like myself, are past seventy know the truth about the past. We have seen the time when whole families lived on a month’s income that only amounts to maybe one decent day’s pay or at most two days of mediocre pay now. I remember having a long conversation about what a person could do with three hundred dollars a week and coming to an agreement that no sane person could possibly ever have any real need for more money than that. Anyone but an incurable wastrel would live really, really well on half that and bank the rest.
Social Security was always a leftest attempt to build an economic "perpetual motion" machine.
Needless to say, perpetual motion machines are impossible, economic or otherwise.
I see what you did there.
And if prices are falling while the money supply is increasing, maybe demand for money is growing faster than supply.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.