Posted on 09/10/2013 3:14:13 AM PDT by sr4402
This surreptitious default move is one peg in the restoration of a more comfortable debt to GDP ratio. But the policy-driven move towards higher inflation will help devalue the outstanding real level of what are still huge liabilities. That is not price stability: it is more bad news for pensioners and those who live on fixed income investments...
(Excerpt) Read more at cnbc.com ...
I wonder why that is?
I’d have to say that rising property taxes also not included in inflation numbers is crippling to those on fixed incomes
Inflation,consumer price index, unemployment rate and on and on.Government accounting???? How about some government accountability and let’s start with Benghazi. Now Hillary is getting an award this day for her human rights work.barf barf. I am sure that the Stevens family will be beaming with her. Barf barf Buick Buick.
The most certain way to have your pocket picked in the coming years is to live the suburbs. Especially if you don’t have kids or if you do and send them to a private school. The unions in many suburban districts the unions have learned to used the threat of banning sports and clubs as leverage against parents in order to pass school levies to pay for inflated salaries, administration and benefits. Not just defund sports and clubs, but ban them outright. They pulled that where I live and refused to allow the parents to do pay to play or fund them through booster organizations. It worked. They got their last tax increase after three failures at the polls. It only passed by 50 votes, but they got it. Oh, and people from my district are giving seminars to other districts on how to do this. And yes, I’m moving next year.
In our county the school district is the second largest employer after the military - 6,500 folks.
They can pack any town hall or school board meeting with “increase spending” supporters at the drop of a hat.
Blah blah blah... hyper inflation means America defaults and the economy crashes.
I’m pretty cynical on human nature and the behavior of Boobus Americanus, but I have to say even I was taken aback by the behavior of people here during the last levy debacle. You had fat soccer moms dressing their little darlings up in red shirts with “tell me no to my face!” printed on them the day after the 2nd levy failed. Their sports addled husbands were barking at senior citizens to sell them houses and move to rest homes if they couldn’t afford higher property taxes. Keep in mind, it was just losing sports, band and clubs that prompted this behavior. Hard times are coming, and when they get here I don’t want to be anywhere near these people. Don’t let the mini van and well manicured lawns fool you. These people are animals waiting to turn on their neighbors.
The Bureau of Labor Statistics calculates both the total inflation and the "core" inflation excluding food and fuel (along with many other subsets of the numbers). You can argue whether the numbers are accurate or if they are cooking the books, but they do include food.
After released, the press does seem to emphasize the set which makes the left look better -- the smaller number for a Democrat president and the larger number for a Republican.
Now, that's just plain ignorant. The neighborhood I live in has a lot of over-50s. We're a bargain. We don't have kids in the schools, we don't commit crimes, have rowdy parties, cause much fuss for the police. We do pay our taxes, maintain our properties and are a presence if there are any problems. We will call police before a problem gets out of control. A sane community would do all it could to keep senior citizens.
About that inflation? At this point the US has unsustainable debt and expenses and job outsourcing to avoid it. Responsible folks can't save with near-zero interest rates. The longer the feds finagle around inflation, the worse it's going to be when they lose the ability to artificially control things.
Too bad the general public doesn’t understand what’s happening.
Inflation is the statist’s friend. It reduces savings to zero and wipes out the government’s obligations.
The ruling elite is protected by automatic salary and pension increases.
The elderly who can no longer bring in any money are the victims of this theft.
That is what I was refering to.
sr4402: ...Food Inflation which is NOT counted in the governments inflation figures...
BLS: The CPI represents all goods and services purchased for consumption by the reference population (Consumer Price Index for All Urban Consumers or Consumer Price Index for Urban Wage Earners and Clerical Workers). The Bureau of Labor Statistics (BLS) has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
me: Actually, we're talking about a 28% increase (1.02510 = 1.28).
Ah, now I follow you, the article didn't mention "core".
The article did seem to say we'd be hurt by 2.5% inflation. Since WWII we've averaged 3.9%. The article's wrong.
Thanks for the ping. One of the issues you run into regarding inflation is the definitional differences between individuals themselves as well as the professionals. If your house is paid off your inflation is experienced mainly in food and energy. Of course, there’s ‘inflation’. The definition of inflation as a general price rise gets missed. If your basket is different than mine, then so is your inflation.
Just to be clear I am not in favor of inflation and I don’t accept the reasoning that a ‘little inflation is good’. I understand the Monetarist side of it, but I lean toward a general deflation driven by productivity increases as my preferred method to “grow” an economy.
To achieve that you need a lot less government than we have right now at the local, county, state and, of course, federal levels.
Your other two choices are either deflation or a lot of inflation. We got to pick one and be happy with it or admit we like being miserable. I pick 'happy with little inflation'.
How is it achieved?
I think you’re making a lot of presumptions. Watching your money erode isn’t fun. We shouldn’t punish savers. Where is the deflation trap in history? We’re always told that falling general prices become a death spiral. We’ve seen inflation do that, but I am not aware of any US economic history showing that deflations do that. They’re always mild and once prices reset for labor and goods, the economy is on again. The managed economy is central planning by another name.
Hardly. During the half century before the US finally gave up and changed gold certificates into FRN's, most people came to see deflation bringing about high unemployment and falling gdp. Let's look together at the horrific history of deflation seen with in the historical record:
| year | inflation yr/yr | gdp yr/yr | unemploy- ment rate | year | inflation yr/yr | gdp yr/yr | unemploy- ment rate | |
| 1890 | -1.12% | 9.70% | 4.00% | 1916 | 9.24% | 13.87% | 5.10% | |
| 1891 | 0.00% | 1.17% | 5.40% | 1917 | 20.49% | -2.48% | 4.60% | |
| 1892 | 0.00% | 5.11% | 3.00% | 1918 | 17.47% | 9.01% | 1.40% | |
| 1893 | -1.13% | -5.79% | 11.70% | 1919 | 14.87% | 0.80% | 1.40% | |
| 1894 | -4.36% | -4.77% | 18.40% | 1920 | 15.84% | -0.93% | 5.20% | |
| 1895 | -2.40% | 11.46% | 13.70% | 1921 | -10.68% | -2.30% | 11.70% | |
| 1896 | 0.00% | -1.66% | 14.40% | 1922 | -6.31% | 5.56% | 6.70% | |
| 1897 | -1.23% | 4.30% | 14.50% | 1923 | 1.79% | 13.16% | 2.40% | |
| 1898 | 0.00% | 10.93% | 12.40% | 1924 | 0.18% | 3.08% | 5.00% | |
| 1899 | 0.00% | 6.84% | 6.50% | 1925 | 2.51% | 2.35% | 3.20% | |
| 1900 | 1.24% | 2.52% | 5.00% | 1926 | 0.97% | 6.53% | 1.80% | |
| 1901 | 1.23% | 5.31% | 4.00% | 1927 | -1.86% | 0.96% | 3.30% | |
| 1902 | 1.21% | 5.12% | 3.70% | 1928 | -1.38% | 1.14% | 4.20% | |
| 1903 | 2.28% | 2.92% | 3.90% | 1929 | 0.00% | 6.04% | 3.20% | |
| 1904 | 1.17% | -3.54% | 5.40% | 1930 | -2.51% | -8.61% | 8.00% | |
| 1905 | -1.16% | 11.30% | 4.30% | 1931 | -8.80% | -6.42% | 15.90% | |
| 1906 | 2.23% | 4.08% | 1.70% | 1932 | -10.31% | -13.00% | 23.60% | |
| 1907 | 4.47% | 2.56% | 2.80% | 1933 | -5.12% | -1.27% | 24.90% | |
| 1908 | -2.09% | -10.80% | 8.00% | 1934 | 3.32% | 10.81% | 21.70% | |
| 1909 | -1.12% | 7.22% | 5.10% | 1935 | 2.54% | 8.90% | 20.00% | |
| 1910 | 4.42% | 1.07% | 5.90% | 1936 | 0.95% | 13.00% | 16.90% | |
| 1911 | 0.00% | 3.26% | 6.70% | 1937 | 3.61% | 5.14% | 14.30% | |
| 1912 | 2.06% | 4.67% | 4.60% | 1938 | -1.88% | -3.45% | 19.00% | |
| 1913 | 2.13% | 3.95% | 4.30% | 1939 | -1.42% | 8.07% | 17.20% | |
| 1914 | 0.94% | -7.66% | 7.90% | 1940 | 1.01% | 8.77% | 14.60% | |
| 1915 | 0.52% | 2.73% | 8.50% |
Here's a graph of the numbers plotted on grey bars showing the recession/depressions.
It's true that during deflation the old people that saved gold coins in the mattress did just fine, but everyone else who was still working for a living didn't. The reason is that business creation is a process of first raising capital, then using the capital to produce goods, and finally selling the goods to pay for the borrowed capital. Deflation punishes business growth by lowering the income from sales while maintaining a high cost of loan repayment.
Most people hate deflation.
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