Low inflation?Higher prices?

[kb01]

Originally Posted By: onebigunion
For people in the lower to middle class, greater than 90% of their expenditurers are on things that are not included in the consumer price index, thus excluded when calculating the rate of inflation. Its a completely meaninglesss number, and, as a number of people have pointed out, has been manipulated for political or economic gain (and not for you and me). How many corporations tie pay increases to the rate of inflation? I think that's also a large factor in the bogus way this is calcualted.

If food, gasoline, energy, and health care costs were included I have no doubt the rate would be well into double digits.


I completely agree. Health insurance, medical care, gasoline, gas, electricity, and water/sewer all went up between 10 - 20% for me in 2010.

I don't believe for a second that inflation is running at the ~ 0% like the government is claiming. I would be shocked if it was < 10% when you factor in actual expenses for a typical household.

 

[Vikas]

I know that prices have gone up quite a lot but comparatively, grocery costs are still very low compared to all other expenses. Eggs and Milk are still very cheap. I do not think their prices have jumped that much since 1981 (that is my base line!)

The rest of the living expenses have shot up multi fold since that time.

 

[motorguy222]

While milk may seem cheap,the subsidy that makes it artificially low isnt.

From 1995-2009,the programs for dairy subsidies totaled $4.8 billion dollars.That doesnt include the waste and misspending that the government is known for.That also doesnt include the taxes that are technically to be used for dairy that go to other "interests".

Dairy Subsidies

Eggs have also increased in price.They have in my area recently went from a little over a dollar to $1.69 a dozen and that is a lower price than some.

It has been reported that egg producers were trying to inflate egg prices by slowing production.

Eggs

 

[Quest]

Originally Posted By: ddrumman2004

She likes the flavor of Folger's Black Silk coffee and the only place she buy it is at a local Kroger store and even with their so called discount, the 27 oz(approx) is now at 10 bucks!



Was able to stock up on a couple of tins of Black Silk for 5.95CAD while Wallymart was having a pre-Xmas sale...now I'm all set for the next several months.

Q.

 

[Vikas]

When bottled water costs more than milk or gasoline, you know things are great with the economy. I am waiting for some entrepreneur to start selling bottled air

- Vikas

 

[JDD]

Originally Posted By: buster
Originally Posted By: PandaBear
There are a lot of bad weather across the globe and pushes food prices up significantly, add the USD devaluation you'll see high food price for a while.



We don't "print" money. That is a term used prior to 1971. Banks electronically credit/debit accounts. That's it...

I think we are clearly in more of a deflationary environment right now. Just because banks are reserved to the max doesn't mean that money is flowing through the economy yet.


That's why I put 'print' in quotation---it's semantics---we are printing the H*** out of money electronically (trillions, with a T). Every time the Fed buys treasuries, ---wham---money gets created out of thin air. Educate yourselves on quantitative easing. We are in a deflationary cycle, for now. There is a TON of dollars floating around out there, but banks have it and you do not. And they don't find anything worth lending it on presently. So for now, yes the deflation is prevalent in real estate and a few other areas, but high oil prices are making everyday items more expensive. But anything that is imported will go up when the dollar inevitably goes down. The tipping point will be when the dollar ceases to be the world's reserve currency. Anyone catch what Mr. Hu was selling here last week?? He wants to dump the dollar because he knows only then can China surpass the US. All nations' central banks have to keep a substantial reserve of dollars to facilitate trading of commodities--that's what all major commodities are traded in internationally. What country will want to keep their dollars if they don't need them, and they are being devalued everyday by the US spending and borrowing and 'printing' money? Like the signature says---it's coming.

 

[JDD]

Originally Posted By: buster
http://moslereconomics.com/2009/12/10/7-deadly-innocent-frauds/

Please read, critique and pass it along. We need to advance these ideas. Everyone is in this boat together.

I worry about the fear mongering going on and level of systemic corruption.

People who advocate the gold standard are advocating a form of implied barterism. Goods &services in exchange for gold, a physical commodity subject to both natural and unnatural supply disruptions. Money functions as a lubricant for transactions. When people complain that our money has no intrinsic value, they are missing the larger point.


Corruption HAS corroded our most important institutions.
Buster---if you take intrinsic value at it's definition, paper money has no value other that what it consists of physically. Dollars simply represent the strength of the economy, as does any currency. I am not an advocate of the gold standard in any way---but---fiat money is just that---it has value because the gov't declares it so. It is a forseeable possibility that at some point, people may not want to trade an item for the paper you hold in your hands especially if all those dollars that have been created (albeit electronically) find their way into your and everyone else's hands and there are more dollars chasing items than there are items. It's called inflation. You can bet it's coming. In fact you can bank on it--

 

[Shannow]

But gold has no intrinsic "value" either.

It's just shiney paper, and not "worth" a grain of rice.

 

[tonycarguy]

Originally Posted By: Shannow
But gold has no intrinsic "value" either.

It's just shiney paper, and not "worth" a grain of rice.


That's not true. Gold has value as jewelry and in industry

 

[JDD]

Originally Posted By: tonycarguy
Originally Posted By: Shannow
But gold has no intrinsic "value" either.

It's just shiney paper, and not "worth" a grain of rice.


That's not true. Gold has value as jewelry and in industry


Bingo---it has very limited intrinsic value, but it does have some industrial uses as well.
Once people wrap their heads around what fiat money is---they will start to understand the precarious situation we are all in. Here is an excerpt from the head of the IMF in 2010:

Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.

“That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now,” he said in a speech on the future mandate of the 186-nation Washington-based lending organization.

Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF’s special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies.

He said having other alternatives to the dollar “would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country.”

Strauss-Kahn, a former finance minister of France, said that during the recent global financial crisis, the dollar “played its role as a safe haven” asset, and the current international monetary system demonstrated resilience.

“The challenge ahead is to find ways to limit the tension arising from the high demand for precautionary reserves on the one hand and the narrow supply of reserves on the other,” he said.

Several countries, including China and Russia, have called for an alternative to the dollar as a reserve currency and have suggested using the IMF’s internal accounting unit.

Strauss-Kahn said the IMF also needs to do a better job of tracing how risk percolates through the global economy.

“Here it will be essential to improve our ability to monitor several dozen large complex financial institutions that make up the `plumbing’ through which global capital flows,” he said, while leaving national regulators the job of monitoring the solvency of individual institutions." end quote

When the Dollar ceases to be the reserve currency, IT WILL CHANGE EVERYTHING.

 

[buster]

"The gold standard has, in my opinion, the serious disadvantage that a shortage in the supply of gold automatically leads to a contraction of credit and also of the amount of currency in circulation, to which contraction prices and wages cannot adjust themselves sufficiently quickly. - Einstein from, "The World as I see It"

‎"If we could somehow manage to prevent the purchasing power of the masses, measured in terms of real goods, from sinking below a certain minimum, stoppages in the industrial cycle such as we are experiencing today would be rendered impossible." Einstein in the 30's

Einstein, Edison, Lincoln, Jesus, Caesar, and Aristotle. that is a pretty good list of supporters of debt-free and commodity-free legal tender.

Einstein got his economic education from Henry George...

“I have already read Henry George’s great book and really learnt a great deal from it… Men like Henry George are rare, unfortunately. One cannot imagine a more beautiful combination of... intellectual keenness, artistic form, and fervent love of justice.” — Albert Einstein

"Aristotle and Plato noted the paramount principle - that the nature of money is a fiat of the law, an invention or creation of mankind."

http://blogs.reuters.com/rolfe-winkler/2010/01/19/mosler-the-wrong-standard/

 

[buster]

Quote:
page 40
"Lawrence Summers
Several years ago I had a meeting with Senator Tom
Daschle and then-Assistant Treasury Secretary Lawrence
Summers. I had been discussing these innocent frauds with
the Senator, and explaining how they were working against
the well-being of those who voted for him. So he set up this
meeting with the Assistant Treasury Secretary, who is also a
former Harvard economics professor and has two uncles who
have won Nobel prizes in economics, to get his response and
hopefully confirm what I was saying.
I opened with a question: “Larry, what’s wrong with the
budget deficit?” He replied: “It takes away savings that could
be used for investment.” I then objected: “No it doesn’t, all
Treasury securities do is offset operating factors at the Fed. It
has nothing to do with savings and investment.” To which he
retorted: “Well, I really don’t understand reserve accounting,
so I can’t discuss it at that level.”
Senator Daschle was looking on at all this in disbelief. This
Harvard professor of economics, Assistant Treasury Secretary
Lawrence Summers didn’t understand reserve accounting?
Sad but true."]


http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

 

[mechanicx]

What I liked about the gold standard sure you might've had more quick short term price flunctuations, but over time prices stayed very stable and basically no inflation. At least prices meant something and money you saved wasn't constantly deflated. With constant inflation that's hard to determine how much you are really losing.

 

[buster]

There will always be tradeoffs. There is no free lunch. It's important though to separate the facts from the propaganda.

 

[Pop_Rivit]

Originally Posted By: fdcg27
Beef of any kind is hard to find for >$2.50/lb.


We purchase a side of beef every fall and split it with neighbors. It costs about $900 for the cow and processing split 2 ways. So we pay $450 for around 250# of quality beef. Most of it is steak, very little ground. It averages around $1.80-$2.00 per pound in the freezer and is vastly superior to store bought.

Originally Posted By: fdcg27
Pork must be plentiful, since it remains pretty cheap, as does chicken.


We get pork, whole chicken and whole turkey from the same locker. The only thing we don't get is ground turkey. While I could grind some myself from a turkey breast it's easier to purchase it pre-ground from the grocery store. Prices from the locker are about 70% of what I see in the regular grocery store.

Originally Posted By: fdcg27
Eggs are now $1.20-1.40/dz, while milk and dairy products in general like cheese and yogurt have also increased in price.


We have a lot of local farmers around here who sell eggs. We give them a call a day or two before and they have them ready when my wife stops by on her way home from the office. They usually run around $1/dozen and taste far superior to the factory eggs from the supermarket. We don't drink much milk (maybe a gallon every week) or eat much other dairy.

Originally Posted By: fdcg27
General household items, like laundry cleaning products, have also increased in price.


I purchase a lot from Amazon.com. A case (4-160 load boxes) of Country Save laundry detergent lasts us more than a year and, last I checked, was about $60, which works out to 9 or 10 cents an ounce. A case lasts us a year with our high efficiency washers.


Originally Posted By: fdcg27
Clothing seems to be getting more expensive, although one sees less synthetic and more wool, linen and cotton for the money.


I picked up 5 pair of Carhart blue jean shorts from Cabella's bargain cave (on line) shortly after the holidays. The price was $8.00/pair. I also purchased 5 Carhart t-shirts for $6.00 each, 2 pair of Cabella's branded jeans for $13 each, and a new leather belt for $8. I spent enough so the shipping was free and since there isn't a Cabella's in my state I didn't pay sales tax.


Originally Posted By: fdcg27
Inflation is supposed to have been at an annual rate of 1.5% in December.
If this is true, then why does everything seem to be getting more expensive?


There are a lot of ways to save money. Our grocery store has a "sack sale" for a department once a month or so, and knocks 20% off everything that will fit in a brown paper grocery sack. We can stock up on a few frozen items or other meats that our locker doesn't carry.

Is the price of things going up? Sure. No more than I've seen over my past 66 years (I still remember loaves of bread for a dime and gas at 30 cents a gallon).

Are there a lot of ways to save? Absolutely. If I were really thrifty I'd add coupons to my weekly grocery store run, but I'm simply to lazy to take the time to do it. We're cautious about extra driving, and any trips into town are planned and combined to use as little fuel as possible. We very rarely eat out, we don't go to movies or other entertainment venues.

As much as the doom and gloom crowd would like you to believe, things really have not changed that much over the years. The economy cycles, prices and wages go up (usually not at the same time), and there are periods of highs and lows.

 

[Shannow]

Originally Posted By: tonycarguy
Originally Posted By: Shannow
But gold has no intrinsic "value" either.

It's just shiney paper, and not "worth" a grain of rice.


That's not true. Gold has value as jewelry and in industry


True, but not $1400/Oz worth of value...and bars of it sitting in vaults isn't reflective of utility, just shininess.

 

[JDD]

If you don't think inflation is coming---here is a partial excerpt inlcuding a quote from Alan Greenspan (who history will judge as a central figure in all this mess):

From Zero Hedge:

... After such establishment "luminaries" as World Bank president Robert Zoellick, Warren Buffett's father Howard, Jim Grant, and, most recently, Kansas Fed president Thomas Hoenig, all voiced their support for a return to a gold standard, the most recent addition to the motley group of contrite voodoo shamans is none other than the man who is singlehandedly responsible for America's addiction to cheap toxic credit... Alan Greenspan!

In an interview with Fox Business, the man who refuses to go away into that good night:

"We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity...

 

[buster]

I don't listen to Allen Greenspan. I will say this, what I believe is a growing fringe movement.

Here, let's look at two examples:

http://www.msnbc.msn.com/id/41305791

vs

http://video.foxbusiness.com/v/4250679/spending-necessary-for-economic-recovery/

Pay close attention in the second video around the 4:55 mark.

 

[buster]

The problem as I see it is that both sides seem completely unable to think out-of-the-box; i.e.

"A government should never go into debt. It doesn't need to go into debt. A government can issue the money it needs .... the government's mentality in general seems to be 'we'll do what we have to do and we'll worry about paying for it later' ... but what you could do is pay for it now. In other words, you don't have to 'pay for it later': you don't have to pay for it with debt. You can just pay for it with money." - Ellen Brown

 

[JDD]

Originally Posted By: buster
The problem as I see it is that both sides seem completely unable to think out-of-the-box; i.e.

"A government should never go into debt. It doesn't need to go into debt. A government can issue the money it needs .... the government's mentality in general seems to be 'we'll do what we have to do and we'll worry about paying for it later' ... but what you could do is pay for it now. In other words, you don't have to 'pay for it later': you don't have to pay for it with debt. You can just pay for it with money." - Ellen Brown


If the US gub'mit just 'borrowed' from itself, that would be one thing-----but that's not the game anymore. The danger is that once the $$ that is in the financial world gets into the consumer world (real world), watch out for inflation. The massive amounts of money that have gone to the financial sector bailout are largely still there. Tried to get a commercial loan lately? Good luck. the $$ hasn't found its way out yet. Ever wonder why the stock market is so high and the economy is taking a bit ***t? Its all the $$ that you and I (and anyone who lent $$ to the US) bailed out wall street and foreign banks with, that they are now sitting on and investing in equities. Think $$ is going in to real estate-?? Nope--that's why its gone down. Yes, Virginia, they took your money and are making a killing investing it in stocks, not loaning it out, giving themselves fat bonuses, and you get to pay the interest on the whole deal. Yes, I suspect the unrest is percolating. Wait til when inflation and interest rates rise. You think the housing market is bad now--add in mortgage rates at say 8% and what do you think the market will be like then?