Where Is the Inflation?

16 January 201 ^ | Mark Thornton

[arthurus]

The basic notion that more money, i.e., inflation, causes higher prices, i.e., price inflation, is not a uniquely Austrian view. It is a very old and commonly held view by professional economists and is presented in nearly every textbook that I have examined.

This common view is often labeled the quantity theory of money. Only economists with a Mercantilist or Keynesian ideology even challenge this view. However, only Austrians can explain the current dilemma: why hasn't the massive money printing by the central banks of the world resulted in higher prices.

[Paraclete]

The answer is pretty simple. The inflation is the fact we’re already paying several times the real value of stuff even though it’s worth much less. The FED is trying to let the air out without a total collapse of asset prices. The underlying price structure has already collapsed — many just don’t know it . . . or don’t want to accept it.

The hard part to manage is who suffers as we assimilate the deflation. So far it’s been savers who have carried the brunt.

We’re between a rock and hard place. If interest goes up, the government goes broke faster. If it stays down, pensions and longer term instruments will collapse.

[Wyatt's Torch]

You should really read the article first.

[Syncro]

For the last few years there has been no COLA added to Social Security checks.

That is one of the main reasons we don't see the inflation.

They have decided that food and gas prices won't be added in to the cost of living inflation index.

This year I think there was a small increase.

[uncommonsense]

"So, it is entirely possible that the printing of money (+M) is completely offset by the reduction in the velocity of money(V-) because banks won’t lend."

Ding, ding, ding... winner

Banks and private companies are sitting on piles of cash, and the velocity of gov spending is process constrained (> 1.0).

Also, the corrupt gov institutions change metrics to keep their gravy train chugging along. Employment, inflation, debt/unfunded obligations, student test scores - you name it...

[Age of Reason]

The money printing has been going straight into the pockets of the rich. So what the rich buy with their money is where the inflation is: investments, stocks, real estate, gold.

Meanwhile for the rest of us, the cost of goods and services produced domestically has gone through the roof over the last few decades: medical services and medical insurance, housing, and anything else that cannot be outsourced to china or india to keep the cost down.

[Vinnie]

Last Saturday I went to buy a loaf of multi-grain bread I like.
The price was $4.19. Less than a year ago it was #3.29.
Just one I can think of offhand.

[fatrat]

“If you buy food, fuel, education and insurance inflation is huge.”

you forgot about guns and ammo.

[mjp]

why hasn't the massive money printing by the central banks of the world resulted in higher prices.

According to the formula, mv=d, an increase in the money supply leads to an increase in demand. According to the formula, p=d/s, an increase in demand leads to an increase in prices. But when the economy is in a severe recession or a depression, there is a natural tendency for prices and wages to fall. The current low increase in prices of the current recession is the product of these two offsetting pressures.

[Will88]

For years, 6 oz. cans of tuna were $.65 - .79. Now 5 oz. cans cost around $.80 to $1.00.

15 oz. cans of Salmon around $1.30 for years, now around $2.89.

Quarts of mayonnaise have risen from around $1.98 to $3.50 for a common brand, and about the same for less and more expensive brands.

Egss have increased greatly also, along with most all grocery store items.

These increases over the past three or four years.

[DeFault User]

You’re shopping in the wrong place. Try Aldi’s. Tuna is still $.69, mayo $1.95, milk<$3 per gallon, and eggs fluctuate with the season but generally cheaper than anywhere else. You buy from the cardboard cases and bag your own. It’s owned by Trader Joe’s and carries some of the same stuff but still no 2 buck Chuck (3 buck Chuck now).

[Cyman]

Remember how for years and years, you were driving down streets and wondered how a husband and wife and their three young kids were living in a $1 million dollar home with a boat and an ATV and a swimming pool in the yard?

Remember how you said that this was just crazy and that it went against everything you were taught when you were younger. You made a good living but YOU couldn’t afford what these people had. Were they all bank robbers you thought?

And you kept going down that street in La Jolla, Ca and there were dozens of people that were moving in to those $2 and $3 AND $8 Million dollar homes.

And you kept muttering “This has got to end sometime. The bubble has got to burst”

And then it did!

HOLD ON because it’s a coming.

[jdsteel]

But instead, we are expected to believe that the inflation rate is hovering around 2 percent. I guess this was done to prevent the sheeple from knowing how bad things really are.

Even worse; since SS increases are based on CPI the government has a conflict of interest. They desperately need to have a low CPI for both bond yields and what they pay to seniors. If they were a pension fund they would all be in jail by now.

[Fledermaus]

That’s right. Basic commodities are through the roof. A decent loaf of bread is $3 around here. Milk is ridiculous, butter too.

[Will88]

All my prices are brand names. There are cheaper store brands, but they don’t measure up for the items I named, even though other store brand items are good enough.

And there are no Aldi’s near me.

[Neidermeyer]

printing of money (+M) is completely offset by the reduction in the velocity of money(V-)
********************************************
Velocity has been negative (under 1.0) for 3+ years ,, what gets printed goes into the black hole of bailing out the banksters bad bets and failed PONZI scheme that is the housing crash...

[Pelham]

Low velocity is what I am thinking as well.

[TArcher]

[why hasn’t the massive money printing by the central banks of the world resulted in higher prices.]

Evidently this chauffeured jackwagon hasn’t bought a loaf of bread, an orange, or a gallon of gas lately.

FAIL

[TArcher]

>>The current low increase in prices

What Ivory orifice did you pull ~that out of, Professor?

[TArcher]

And you kept muttering “This has got to end sometime. The bubble has got to burst”

 

 

" Uhhhh, that's not ours either! "

---Weiner, Obama, Perry, Pelosi, Frank, Bush, Pritzker and Associates, LLLP.

 

 

Follow the....

http://www.campaignmoney.com/finance.asp?type=in&cycle=08&criteria=pritzker&fname=penny

 

Billionaire business mogul Penny Pritzker is a member of one of America’s richest families and was the Finance Chair for the presidential campaign of Barack Obama.  It was Pritzker that led the prolific, and illegal, fundraising that helped power Barack Obama’s presidential campaign.  She was the chair of Chicago-based Superior Bank’s board for five years.  Pritzker was into subprime lending before it became all the rage starting in around 2000.  Prtizker's chairmanship was to concentrate on sub prime lending, principally on home mortgages, but for a while in subprime auto lending, too, after the Pritzkers' bank acquired its wholesale mortgage organization division, Alliance Funding, in December 1992. Back then they called it "predatory lending." Superior Bank went belly up in 2001 with over $1 billion in insured and uninsured deposits; 1,406 depositors lost much of their life savings.  This collapse came amid harsh criticism of how Superior’s owners promoted sub-prime home mortgages. On Nov. 1 [2002] the Federal Deposit Insurance Corp. pointed the finger at Ernst & Young, Superior’s auditor, in a fraud suit filed in federal court here.  But that action came two months after a group of Superior depositors accused the bank’s owners and directors, including two members of the Pritzker family, of racketeering....

[snip]

...Pritzker is chairman of Classic Residence by Hyatt, luxury senior living communities in 11 states; chairman of The Parking Spot, which owns and operates off-airport parking facilities in nine cities; chairman of the credit data company TransUnion and chairman of Pritzker Realty.  She also sits on the board of Global Hyatt and plays a role in numerous non-profit groups, including serving as chairman of the Olympic village portion of Chicago’s bid to win the 2016 Summer Games. 

 

http://www.theobamafile.com/_associates/PennyPritzker.htm

 

 

 

Nudge nudge nudge...