Posted on 10/27/2013 1:10:29 PM PDT by reaganaut1
WASHINGTON Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.
Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.
The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obamas nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.
The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers wages. Retailers including Costco and Walmart are hoping for higher inflation to increase profits. The federal government expects inflation to ease the burden of its debts. Yet by one measure, inflation rose at an annual pace of 1.2 percent in August, just above the lowest pace on record.
Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about, Kenneth S. Rogoff, a Harvard economist, wrote recently. It should be embraced.
The Fed, in a break from its historic focus on suppressing inflation, has tried since the financial crisis to keep prices rising about 2 percent a year. Some Fed officials cite the slower pace of inflation as a reason, alongside reducing unemployment, to continue the central banks stimulus campaign.
(Excerpt) Read more at nytimes.com ...
Ping to #120
This article might be of interest to you and our discussion:
http://www.wired.com/business/2013/10/next-big-thing-economic-data/
LOL --I forget the name of the economic principle where every negative one place is a positive elsewhere (mass death = soaring undertaker profits). Just the same, we really need to say this is either "our" definition because it's the "only" definition. Your saying it's "my" definition suggests that you've got one. Do you?
"The good times toward the end of the 19th century, which 1010RD alluded to... ...overall prices dropped by about half." ... ...the website you pointed to proves my statement...
Ah, you were right about the prices dropping by half --I'd glanced at the inflation from 1850-1899 but we do in fact see a 50% drop in the 1865 to 1899 segment. What we're still missing though is the "good times" part. The '65 - '99 block was an era mostly in economic contraction (from US Business Cycle Expansions and Contractions) while since 1899 there were three times as many months of expansion than contraction months. This is the kind of correlation that give economists the "Deflation = contraction & Inflation = expansion" approach that's at odds with your "deflation is not necessarily a bad thing".
a huge bubble began inflating after the fed was created, and famously burst in 1929 -- leading to the Great Depression.
Some say the Fed caused the depression and others say the FOMC caused the recovery.
I don't recall taking a position one way or another regarding the Fed
Life does go on and we do need to work to feed our families. So while others think about making up their minds the rest of us can go with the Fed till we find something better.
--and I'm saying that if it isn't actually a bad thing then it'll sure do until a real one comes along.
All the numbers are online open to all; we can compare the record of historical inflation rates to historical records on unemployment and gdp growth. We've got unemployment back to 1890 and real gdp back to 1790. Of course you're more than welcome to look up the numbers yourself, but until then this is what we've got:
yr/yr price trend | real per capita gdp | average unemployment rate | ||
inflation | 3% | 6% | ||
deflation | 0% | 11% |
Deflation means no-growth double digit unemployment that should have been full employment with solid growth. Deflation is definitely a bad thing.
mostly, inflation is devaluation. As the value of the $$ is decreasing, so is the total debt.
Secondly, inflation is needed to pay the increased obamacare costs. there must and will be across the board labor cost increases to provide funds to pay the Obamacare tax.
Inflation is not if, it is when and how much
Inflation is a dead certainty
In theory, correct. Do you read that to mean anything else? I see no other authority.
Anything else? If they can make coins out of metals other than silver, they can make bills without silver. Don't you agree?
But, could you imagine the up-rising when people noted the change in the value of their $$ by decree from D.C.
They didn't rise up in the 30s, when FDR changed convertibility or in the 60s, when LBJ removed silver coinage.
A1S8, again, specially states it can ONLY *MINT* = metal based.
I'm pretty sure that coin meant make. So they can make coins or bills. States could only make gold or silver coins.
Sure, Congress can borrow money on the credit of the U.S., but I don't read where the authority to create fiat currency to tack onto the national debt
Not sure what you mean here. Creating fiat currency doesn't tack anything onto the national debt.
let alone remember a Const. Amendment to allow Congress to give their power of minting to any other entity
Both the US Mint (coins) and the Bureau of Engraving and Printing (bills), are part of the Treasury Department.
Believe you understood the context...aside from the fat fingering.
Take made sense in your context.
Few people understood what had happened. Even today, three generations later, much of it sounds pretty incredible.
Take for example the family that sold its house to emigrate to America. On arrival at the port of Hamburg, they found that the money wasn't enough to pay for their crossing -- in fact, it didn't even pay for their tickets back home. Then there was the man who drank two cups of coffee at 5,000 marks each, only to be presented with a bill for 14,000. When he asked why this was he was told he should have ordered the coffees at the same time because the price had gone up in between. And then there's the story about the couple that took a few hundred million marks to the theater box office hoping to see a show, but discovered it wasn't nearly enough. Tickets were now a billion marks each.
—and back then those that bought gold jewelry were able to sell it at a million times the purchase price.
What’s happening now is there are folks on these threads that recently bought gold for $1,900 and were later happy to sell it for $1,200. You’re right though, these times are similar to the early 1920’s, but instead of Hamburg we’re in Moscow and the very real problem is not the fed with our money it’s the Marxists with our entire economy.
imho the Freerepublic has a serious problem with trolls that want us to be anti-bank when we should be anti-Bolshevik.
1). Anything else? They do (the penny, the nickel, etc.). Those have historically been ‘fiat’; but they are NOT valid for debt (only gold/silver).
2). No, those was the failing of our G/Great-grandparents. D.C. should have been a smoldering heap IMHO. Let’s not forget Nixon in the theft as well.
3). I can’t see how ‘coining’ = ‘printing’ = ‘make’. States are not allowed to mint/print/make/etc., they can ONLY assure gold/silver are payment of debt (A1S10) [note, it specifies gold and silver COIN as the latter]
4). Fiat currency is a its heart DEBT. It is a fiction masquerading as value, created out of NOTHING. It goes hand in hand with spending and interest. Do you believe, if we still had a true monetary policy, Congress could rack up $17+TRILLION ($120T+ unfunded liabilities)??
5). Those functions/departments are under control of Congress, the ‘Federal Reserve’ is not.
I can pay debts with pennies and nickels.
States are not allowed to mint/print/make/etc., they can ONLY assure gold/silver are payment of debt
Correct. If states want to make their own money, they must use gold and silver. The Federal government doesn't need to use gold and silver.
Fiat currency is a its heart DEBT.
The $20 in my wallet isn't debt.
It goes hand in hand with spending and interest. Do you believe, if we still had a true monetary policy, Congress could rack up $17+TRILLION
Did a gold standard stop Lincoln, Wilson and FDR from racking up enormous debts?
Those functions/departments are under control of Congress, the Federal Reserve is not.
The Fed is under the control of Congress. The Fed could be eliminated tomorrow, with a majority vote in both Houses and the signature of the president.
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