Posted on 09/06/2012 11:13:39 AM PDT by blam
I got inflation right here....
Where is inflation.
Try the grocery store..
Dry beans that I bought a year ago at 1 buck a pound is 1.50
I used to stock up on Sirloin roasts at .99/lb and haven’t seen it under 4. Can’t buy hamburger for under 3 a pound.
Gasoline is twice what it was 4 yrs ago.
The real inflation is in the stuff they don’t include in the measurements.
OK, where’s the guy that swears up and down that food and energy are NOT EXCLUDED from the reported rate of inflation?
Spot on.
Beer Nuts are 99 cents and Deer Nuts are just under a buck!
And the bastids are going ahead with a “stealth QE3”.
It’s the collapse in velocity that is “keeping the presses running”. Knowing Bernanke’s background tells you he will do whatever is necessary to avoid the monetary mistake of the Great Depression when tightening occurred triggering a double dip sever recession. The author indicates the key issue: when velocity improves, how quickly can the Fed drain the liquidity out of the market to avoid runaway inflation. Timing will be everything.
Bull.
There is package deflation to hide the costs.
The price of dog food hasn’t changed much. A 20 pound bag of Beniful kibbles was 15 bucks..Then the 17 pound bag was 15 bucks.. Now the 14 pound bag is 15 bucks.
I used to buy Kroger frozen vegetables for a buck a pound.. Still a buck on sale but it’s now 12 ounces.
I don’t have a reference point for them.
Food, energy, education, the usual. Clinton told us last night that housing prices are finally rising, as if it were a good thing. Aren’t there stories about subprime car loans running wild? Such phenomena we never seem to tie to an increase in the money stock.
We’re fundamentally handicapped as regards monetary policy. All these indicators, all these induces. But we can’t ever tell until it’s right on top of us. The booming housing market was a badge of honor for decades before it blew up. Assuming we could tell, and knew what was happening, and furthermore impossibly knew whether it was good or bad, we couldn’t make the right move. Because by the ti.e complementary or counter actions take effect conditions have changed.
I have yet to mention our biggest handicap, in that we never know how things would look without our meddling. Inflation may not be punching us in the face, but what if prices are higher than nature would have them? Who knows?
Ten trillion in wealth destroyed. About one trillion in “printing” added back in. We’ve got quite ways to go to create structural inflation.
The inflation in food is mainly due to drought, the use of corn for fuel instead of food and animal feed, and the high price of oil/gas. In other words, not structural inflation but temporary due to weather, and temporary as to oil and stupid policy. (although high oil price will hang around if Obama wins, since that’s his policy goal.)
Here’s what’s deflated:
The value of your labor. Real estate (80% of our wealth). The value of most retirement accounts. The cost of many retail items like TVs and computers.
So, we have massive asset deflation (net worth and wages of Americans both down) and weather and policy related inflation of certain items, most noticable being food. Small inflation in truck-delivered goods due to gas prices.
The food inflation can be partially solved through policy, and the rest of it will fade when the drought fades, as droughts always do.
of course gold will increase in price, as it’s measured in US dollars
and as you dilute the value of the dollar... which they are doing to keep the markets ‘up’... those commodities that do not dilute, such as gold... will spike in price
The “amount printed” above should be 2 trillion, not 1, sorry.
Indeed. One trip to the grocery store.
“when tightening occurred triggering a double dip sever recession.”
That didn’t happen. But ideas have consequences and since everyone in power think depressions are caused by deflation we will get endless helicopter dumplings. Or maybe ideas don’t matter and government control of monetary systems will only ever produce one answer, Keynes and Friedman or no.
It is true that people are sitting on money, and that it is not changing hands at rates satisfactory to our overlords. But once in a blue moon businessmen forecast correctly, and maybe skittishness is justified. For one thing, why expand if you don’t Knowles whether the federal government will up and confiscate your profit tomorrow?
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