Waiting for Inflation? It's Already Here (Notice how prices of everyday things have gone up)

Minyanville ^ | 06/10/2010 | Robert Barone

[Alberta's Child]

This article raises some good points, but it overlooks the effect that foreign trade has on supressing inflation in this country.

Many of the products we import -- especially those we import from a country like China that has a very low standard of living and pegs its currency to ours -- are artificially cheaper than they would be if they were produced here in the U.S.

[Paladin2]

Everybody has their own market basket of goods, the contents of which can vary depending on the relative prices of substutional goods.

So whatever our lickass gov't says is Inflation, is not necessarily your inflation. YMMV.

[Alberta's Child]

I’d also point out that the examples of “inflation” cited in this article aren’t really accurate. For many people who pay rent for their housing, the rents have been restrained by the economic troubles we face as a nation. Apartment vacancies are very high these days, which probably explains why my lease renewal notice for 2010 included NO escalation in my rent at all — for the first time ever.

[arthurus]

We have been inflating since the advent of GWB when he announced “devaluation.” The government folks in charge of economic propaganda have been rejiggering the “basket of goods” since probably the inception of that particular measure of inflation to minimize the actuality. I watch the prices I pay for food and especially the prices in the convenience stores. Those prices seem to be more sensitive to immediate inflation. It is up and going upper.

[Alberta's Child]

That's a very good point.

People can complain, for example, about how college education costs have been rising faster than the rate of inflation for years . . . but those costs only affect those who are in college at any given time (which isn't necessarily a large portion of our population).

[RobRoy]

The article mentions rent as going up. It has been going down for a while now. In the Seattle area, I know several renters. Without exception, their rents have gone down 28% to 41%, and most without moving.

[Paladin2]

"but those costs only affect those who are in college at any given time"

Even there, as I reflect on paying Tuition + R&B for 3 kids, I note that my costs declined, on average over time, as I refused to pay the big bucks after the first one.

[Star Traveler]

One day, on Free Republic, we’re going into catastrophic deflation, and then the next day, we’re going into catastrophic inflation ... I wish someone would make up their minds ... LOL ...

Of course, I expect to hear next — we’re going to have inflation and deflation, both at the very same time ... :-) [someone will definitely try that one out on us, soon...]

[Alberta's Child]

Right. One of the reasons why college costs have risen faster than inflation over the years is that college education is one of those things that people seem willing to pay for, regardless of how much it costs.

[SeekAndFind]

In the Seattle area, I know several renters. Without exception, their rents have gone down 28% to 41%, and most without moving.

Well, it looks like people in Seattle are still able to hold on to their homes. There seems to be little need to rent in that area. The demand for rentals does not seem to be there based on what you're telling us.

Or, it could be this -- more people are LEAVING Seattle and moving to other places than moving TO Seattle, leaving a glut of rental property.

[I am Richard Brandon]

Maytag just had a recall on dishwashers. Options were a cost-free repair or a rebate on a replacement purchase. So I checked the purchase price of my 4 year old appliance - $519. Replacement cost $724 (with upgrade to stainless steel lining) I make that 30% over 4 years.

[narses]

Debt loads are dropping, real estate values dropped hugely, ditto stock markets, autos and computers and clothing all got way cheaper. This article is BS.

[oldmomster]

...many companies have kept the price the same - but no longer is there one pound of pasta in the box!

[Huck]

We always have inflation, or else a movie would still cost a nickel.

[Citizen Tom Paine]

All one has to do is to buy something that you have bought before, say roofing shingles, a gallon of gasoline (I remember 20 cents/gal), lumber, car batteries, auto parts, steel, and so on. Inflation is here chewing our guts out and the CPI doesn’t pick it up properly. Older folks on fixed incomes are being squeezed by taxes an rising product costs. And the Federal government spends money like there is no tomorrow and state governments prove incapable of reducing spending. It truly is dog eat dog and the ones with the most power extract the wealth from the weaker. Where have we seen this system before?

[KarlInOhio]

Automation and other increases in efficiency in manufacturing without a similar increase in efficiency in services cause changes in the ratio of prices between goods and services. Education is probably the worst example of a service which in recent years has not merely been holding in efficiency, it could be said to be decreasing in efficiency. It takes more teachers, teachers’ aides, and administrators to teach a given number of students today than it took 20 or 40 years ago. If the quality education was going up to match the increase in labor then you could say that efficiency was stable, but I don’t think anyone can say that more is being taught at the elementary, high school or college levels. Given the disparity of changes in efficiency, it is no surprise that the relative cost of education goes up. Other services are similar.

[GOPJ]

bump

[org.whodat]

Pretty well covers it.

[UCANSEE2]

that people seem willing to pay for, regardless of how much it costs.

Almost as if demand is what drives the market.

: )