Posted on 02/27/2015 11:07:24 AM PST by blam
EcoMatters
February 26, 2015
CPI Core Shows Inflation The drop in energy prices, had the knee jerk reaction that we were in a deflationary spiral, again markets get many things wrong on first blush. The drop in energy prices is inflationary in the overall economy, and today`s CPI report showed what a sophisticated analysis would forecast regarding inflation and the role that low energy prices play in the overall inflation equation. We are going to have a transfer from the food and energy components which rely heavily on energy costs into the core inflation reading as consumers have more money in their pockets for true discretionary spending, and all these components` prices are going to rise in the CPI Inflation Index.
Wages, Wages, Wages
What should really be worrying for the Fed is that wages have been spiking under the radar for 2014, up ahead of the overall inflation metric, and leading the way on inflation, and 2015 has seen an even greater surge in wage inflation, again you might not want what you wish for when it actually comes to fruition, with wages surging the Fed now has no choice but to raise rates, and raise them fast!
(snip)
(Excerpt) Read more at marketoracle.co.uk ...
The Fed has no intention of raising rates anytime soon. They can barely service the debt now. Raise the rate and they will really struggle. They are like a hamster on a wheel at this point. No way out.
A little history on the “Great Depression”.
I’m trying to find the original source since I highly doubt this “Forum Poster” wrote it.
A few excerpts;
On December 5, 1932 members of Congress were greeted by a crowd of 2,500 men, women, and children on the capitol steps chanting, “Feed the hungry, tax the rich!”
snip
The strains of the Internationale were ringing out from the metropolises of America. In New York 35,000 men and women packed Union Square to listen to communist orators. Led by Unemployed Councils crowds broke into groceries and meat markets in Oklahoma City, Minneapolis, and St. Paul. In Lincoln, Nebraska 4,000 men occupied the statehouse, another 5,000 took over Seattle’s ten-story County-City Building, and 5,000 Chicago teachers stormed the city’s banks. In Columbus, Ohio Louis Budenz led a mass march on the Columbus statehouse declaring, “We must take control of the government and establish a workers’ and farmers’ republic.” Governor Floyd B. Olson (Farmer-Labor) began building up his own left-wing army, announcing that he was “taking recruits for the Minnesota National Guard” and he wasn’t “taking anybody who [didn’t] carry a red card.” At the same time the response of the well-fed grew less sympathetic (if it ever had been sympathetic) and more violent. Businessmen formed associations of armed volunteers should the worst happen. Police were more willing to use the nightstick, elected officials more willing to call out troops. Father Coughlin was on the radio and Huey Long had Louisiana tied up neatly with a bow. An uprising either left or right in the cities seemed imminent. But as it was when the revolt began it was in the country.
snip
In conservative, Republican Iowa (Hoover’s home state) the embattled farmers had finally had enough. Under the leadership of one Milo Reno, sunburned men reached for their shotguns and pitchforks and proclaimed a Farmer’s Holiday. All roads leading into Sioux City were blocked by insurgents who refused to allow milk to enter (they were protesting being paid 2 cents for milk that was sold in the city for 8 cents). Sheriffs who tried to intervene were disarmed. One farmer told a reporter from Harper’s, “They say blockading the highway’s illegal. I say, ‘Seems to me there was a tea party in Boston that was illegal to.’” “You can no more stop this movement than you could stop the revolution.” Reno himself said, then felt the need to clarify. “I mean the revolution of 1776.” They farmers didn’t align themselves with communism or radicalism of any stripe, they saw themselves as Americans and revolution as an American tradition.
snip
Eventually the “uprising” was broken up with minimal force. But lawyers who tried to foreclose on farms found themselves being threatened (or killed) and in private meetings of the Farmer’s Associations men sang;
Let’s call a farmers’ holiday
A holiday let’s hold;
We’ll eat our wheat and ham and eggs
And let them eat their gold.
snip
Meanwhile the banking situation was worsening. Since the Crash the public had been hoarding gold which began vanishing from vaults at a rate of approximately 20 million dollars a day. Those who couldn’t get metal took paper, and so the Treasury found itself expanding the currency even as the gold upon which it was based was disappearing. The rampant extension of credit before the Crash meant that America’s 18,569 banks had about six billion dollars on hand to meet forty-one billion in deposits.
There’s more here http://www.alternatehistory.com/Discussion/showthread.php?p=8605287
“The only thing the FED can do is try and buy sometime.”
There can be simple fix. Reagan once said (paraphrase) “the government is not the solution to the problem, the government is the problem.”
In this case, cut federal regulations and taxes on companies and people.
But we never hear about this solution. The narrative is always increasing or decreasing monetary supply in some fashion or another. Nobody talks about getting the government out of our lives to allow for economic growth.
The Fed has no intention of raising rates anytime soon. They can barely service the debt now. Raise the rate and they will really struggle. They are like a hamster on a wheel at this point. No way out
You are 1000% correct !!!!!!!!!!!
Yep.
It’s also my gut feeling about silver coins - Morgan silver dollars, my choice.
Gold, not so much. It's harder to identify how pure it is or if it's counterfeit. Also, there's a lot of value in a small coin, so much it wouldn't be practical for easy exchange.
Again, I'm just a beginner with this. Silver seems to make a lot of sense if banks and governments don't get their acts together. There doesn't seem to be much downside risk in accumulated silver. I'd think if the banks collapse it will increase in value
Please, correct me where I err. That's my style....to put my thoughts out there and use the wisdom of others to refine them.
Ping to read your link later. You may be onto something. You ever read The Fourth Turning? We’re due. Very shortly.
Thanks for my new reading.
I have to say that if it had been written after 2008, I would not have followed your recommendation.
I found a free PDF.
your not supposed to tell people that, what’s next, you going to tell them that our entire Monetary System depends on Debt Slavery to function.
So not only will the costs of entitlement programs grow due to inflation, but they will also grow due to demographics. In 1950 there were 16 workers for every retiree; today it is 3 and by 2030 it will be just two. The welfare state will eventually collapse unless some drastic measures are taken. We can't tax our children and grandchildren enough to keep it going. Inflation will just accellerate the process.
It was written back in the 90’s I believe. I was shocked how close they were to events that have already occurred.
There was a book that completely changed my perspective that I read in the early 1990’s.
It was a book that was passionately recommended by one of my clients, I was a Stockbroker.
It was a stupid little paperback called “Life after Television” by George Gilder.
Nevermind the failed predictions contained in his book or those of a dozen others that I read as a result. Failed predictions from Bill Gates and “The Road ahead” to those of Nicholas Negroponte with “Being Digital”, Alvin Toffler and others.
The common theme was that of human nature.
Goldbug ping.
And all the low info voters will believe the Republicans caused it all. Most have no understanding of economics.
Inflation does NOT consist in expansion of any sort except to Keynesians who equate inflation with exapnsion, dealing as they do with what they assume to be a zero sum economy.Inflation can be described two ways, absolute increase of the money supply and relative increase of the money supply which is increase of the money supply at a greater rate than the increase of goods and services. If the money supply increases at precisely the same rate as an increase in goods and services then the price level does not rise but there is absolute inflation becausethe money supply increased. there is no relative inflation, however because prices stay level.We are and Europe is currently ingaged in massive inflation. Most of that money has been soaked up by the stock market which continues to rise. The stock market is a marketplace of goods and services i.e. shares and the buying and selling thereof. When stock prices rise all other prices do not rise or rise much less or could even fall if the stock market is soaking up more money than is accounted for by the increase in the money supply.
While I agree that the Stock Markets reflects the expansion of the money supply, since it has become the reflection of CASH.
Inflation as the result of increased economic activity is a real thing aside from monetary policy or the printing of money.
And it’s not Keynesian.
It’s labor and the infinite creativity of people to make something of value out of what others may perceive as having no value.
It is not a Zero-sum game.
Zero-sum is Keynes.
the good thing about boomers retiring,after working for 40 yrs or so, is that job openings for the young’uns should be available, although hopefully some anglo Saxons will get part of those...
Immigrants will get all the jobs.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.