Do you FEAR inflation?

[Robert A Whit]

I recall the enormous inflation during Carter's era and even prior to that.

Inflation defined in Economics books is

Too much money chasing too few goods

We all realize that domestically, manufacturing though improving slightly, still qualifies to be called very weak. Americans given the chance, pay China for well made goods rather than buy American.

We Americans even purchase some products such as MBZ, Audi and others, such as made in Japan, and do so eagerly. We can't blame other countries for better products.

Inflation in the late 70s to 1980 was so terrible, we all feared it very much. If you were an adult then, you know precisely what I am saying.

This Fed reserve is shoving out money so fast that it is alarming many economists. But dare they talk much about it given it could set off the condition they wish won't happen?

Talk can spook the markets and surely can promote higher prices.

We have all noticed at sores the prices go way up. Worse during Obama.

When they keep prices the same, they sell smaller packages. Stores may sell you 3/4 of a gallon of bleach when the same company was selling a gallon until maybe 2 years ago. We all notice that vegetables are sky high, meat is out of sight and shoppers can tell me many things that cost much more this year than when Bush was president.

All over the world, prices are going up.


Do we first have to get ruined before Obama using his voo doo politics can at least try to solve the problem?

We are in trickle down mode. Obama's programs have done the most for the rich as he pretends to be on our side. Talk is cheap. I can't understand voters who supported him as he drove the shaft deeper up their butt.

Don't ask me why so many democrats love pure punishment but clearly they do.

[fj1200]

Do we first have to get ruined before Obama using his voo doo politics can at least try to solve the problem?

What are you expecting that he could do?

[Robert A Whit]

What are you expecting that he could do?

A moot point given he would refuse any such request.

[logroller]

Inflation: noun1. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (deflation).

It has zero to do with too few goods. What you're relating is the concept of the velocity of money.
The economics of inflation are closely related to the velocity of money: the amount of new goods/services produced domestically with a given amount of money during a time period. The problem, that you touched upon, is that markets become excessively optimistic/pessimistic and fail to respond to monetary restriction/easing. it all works fine when the markets are stable, but during waning periods of boom/ bust, central policies fail to constrain market behavior. Here's a report from a fed worker;
http://www.richmondfed.org/publications/research/economic_quarterly/2009/spring/pdf/hetzel2.pdf

its a tough read, but worth the time it takes to comprehend how sound economic theory can and does fail in practice. In a nutshell: Markets aren't perfect because people are inherently irrational; even regulators; be it out of fear or jubilation.

[Robert A Whit]

Inflation: noun1. a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency (deflation).

It has zero to do with too few goods. What you're relating is the concept of the velocity of money.
The economics of inflation are closely related to the velocity of money: the amount of new goods/services produced domestically with a given amount of money during a time period. The problem, that you touched upon, is that markets become excessively optimistic/pessimistic and fail to respond to monetary restriction/easing. it all works fine when the markets are stable, but during waning periods of boom/ bust, central policies fail to constrain market behavior. Here's a report from a fed worker;
http://www.richmondfed.org/publications/research/economic_quarterly/2009/spring/pdf/hetzel2.pdf



its a tough read, but worth the time it takes to comprehend how sound economic theory can and does fail in practice. In a nutshell: Markets aren't perfect because people are inherently irrational; even regulators; be it out of fear or jubilation.

Oh gee thanks for proving the economists I learned from are just plain wrong. LOL

Seriously, i know precisely what inflation is and love discussing the velocity of money. And that is not the definition of velocity I learned either.

[logroller]

Oh gee thanks for proving the economists I learned from are just plain wrong. LOL

Seriously, i know precisely what inflation is and love discussing the velocity of money. And that is not the definition of velocity I learned either.
I learned Keynesian principles too. As a theory, its Seemingly flawless if perfectly-executed. But in practice, nothing is perfect. Believe it or not, it worked correctly IMO; I don't want a system that constrains highs (conversely, lows either); its just that people operated under the mistaken belief that government regs could allow for a massive boom but still prevent a massive bust. Doesn't work like that.

[fj1200]

A moot point given he would refuse any such request.

My question implied ability, not willingness. He does not control the Federal Reserve.


It has zero to do with too few goods. What you're relating is the concept of the velocity of money.
The economics of inflation are closely related to the velocity of money: the amount of new goods/services produced domestically with a given amount of money during a time period. The problem, that you touched upon, is that markets become excessively optimistic/pessimistic and fail to respond to monetary restriction/easing. it all works fine when the markets are stable, but during waning periods of boom/ bust, central policies fail to constrain market behavior.

I disagree, "too few goods" is a relative concept along with "too much money" and not that there just aren't enough goods floating around. Regarding velocity, it is an essential part of the Quantity Theory of Money (http://en.wikipedia.org/wiki/Quantity_theory_of_money) where M x V = P x Q.

[tailfins]

I experienced it in Brazil in the 1990s where prices almost doubled monthly. Drink bottles were an investment because the bottles deposits were indexed for inflation. You learn to adapt. It is better than a depression because there is still money and jobs.

[Robert A Whit]

I learned Keynesian principles too. As a theory, its Seemingly flawless if perfectly-executed. But in practice, nothing is perfect. Believe it or not, it worked correctly IMO; I don't want a system that constrains highs (conversely, lows either); its just that people operated under the mistaken belief that government regs could allow for a massive boom but still prevent a massive bust. Doesn't work like that.

Where has his theory been executed flawlessly?

[Robert A Whit]

I experienced it in Brazil in the 1990s where prices almost doubled monthly. Drink bottles were an investment because the bottles deposits were indexed for inflation. You learn to adapt. It is better than a depression because there is still money and jobs.

I made a ton of money due to inflation but it is like taking a pill that first makes you feel a lot better then kills you.

[Robert A Whit]

My question implied ability, not willingness. He does not control the Federal Reserve.



I disagree, "too few goods" is a relative concept along with "too much money" and not that there just aren't enough goods floating around. Regarding velocity, it is an essential part of the Quantity Theory of Money (http://en.wikipedia.org/wiki/Quantity_theory_of_money) where M x V = P x Q.

Obama has no control over printed currency but he clearly plays GOD when it comes to debt of the nation and tax policies to keep China strong but the USA weak.

Even Obama claims that wages of mid class Americans has fallen a lot since he took over and thus far, in my opinion, has not recovered. It is easy to find the velocity formula is as you state it to be. Obama has not done a good job trying to use that as a way to collect more revenue to the Feds. Some states have thus their revenues have grown a lot.

[aboutime]

Since there is no way anyone will ever agree as to whether INFLATION is happening, and what the causes are.

I submit. INFLATION comes from eating too much, and it requires a larger belt, and waist measurement to be accurately viewed.

Nobody really cares about the Inflation mentioned in the title of this thread.

Everyone is an expert, and knows everything there is to know about Inflation.

JUST ASK THEM!

[Robert A Whit]

Since there is no way anyone will ever agree as to whether INFLATION is happening, and what the causes are.

I submit. INFLATION comes from eating too much, and it requires a larger belt, and waist measurement to be accurately viewed.

Nobody really cares about the Inflation mentioned in the title of this thread.

Everyone is an expert, and knows everything there is to know about Inflation.

JUST ASK THEM!

We don't have to do that since you just got er dun. That is funny stuff old timer.

[logroller]

My question implied ability, not willingness. He does not control the Federal Reserve.



I disagree, "too few goods" is a relative concept along with "too much money" and not that there just aren't enough goods floating around. Regarding velocity, it is an essential part of the Quantity Theory of Money (http://en.wikipedia.org/wiki/Quantity_theory_of_money) where M x V = P x Q.
Ah snap. perhaps i should have specified demand-pull inflation. I mean, the price of water is certainly inflated in desert, but that's not really the kind of inflation we're talking about here, is it?

[taft2012]

I was a teenager working in a supermarket during those Carter years. I remember seniors shoplifting food, eating pet food to get by, etc.

What happened? If they had retired in the mid-1960s with enough money saved, and had everything well-planned out, by the mid-1970s they were flat broke. Inflation ate it all.

See, that's how government takes care of you. People who supported themselves all their lives, paid their taxes, etc.... they get screwed. They'll be eating catfood while Obama's illegal alien Aunt Zeituni is living in free housing, eating free food, and getting free medical care.

[fj1200]

Obama has no control over printed currency but he clearly plays GOD when it comes to debt of the nation and tax policies to keep China strong but the USA weak.

Meh, those policies have been in effect for decades.


Even Obama claims that wages of mid class Americans has fallen a lot since he took over and thus far, in my opinion, has not recovered. It is easy to find the velocity formula is as you state it to be. Obama has not done a good job trying to use that as a way to collect more revenue to the Feds. Some states have thus their revenues have grown a lot.

I'm not sure how you're proposing to use velocity to collect more revenue.


Ah snap. perhaps i should have specified demand-pull inflation. I mean, the price of water is certainly inflated in desert, but that's not really the kind of inflation we're talking about here, is it?

Tru dat yo.

[Robert A Whit]

I was a teenager working in a supermarket during those Carter years. I remember seniors shoplifting food, eating pet food to get by, etc.

What happened? If they had retired in the mid-1960s with enough money saved, and had everything well-planned out, by the mid-1970s they were flat broke. Inflation ate it all.

See, that's how government takes care of you. People who supported themselves all their lives, paid their taxes, etc.... they get screwed. They'll be eating catfood while Obama's illegal alien Aunt Zeituni is living in free housing, eating free food, and getting free medical care.

This is my opinion.

The typical American has saved less cash than they need once they quit working.

But to be fair, let me review a number of my loan packages and I will be fair and honest in reporting.

I know of no policy by Obama that helps the middle class or the poor.

[logroller]

I've read twice now a mention of "cash" in reference to retirement investment. Cash shouldnt be much more than 10% of an investment portfolio. Try TIPS instead. Placing all your stock in fiat currency makes about as much sense as baseball cards.

[taft2012]

This is my opinion.

The typical American has saved less cash than they need once they quit working.

But to be fair, let me review a number of my loan packages and I will be fair and honest in reporting.

I know of no policy by Obama that helps the middle class or the poor.

I have zero doubt this is the case, *now*.

The era I'm speaking of - people who retired in the mid-1960s - were a different breed. They were people who lived through the Great Depression. They lived their lives keenly aware of the perils of debt. They were screwed in young adulthood, had their kids go off to World War II, and then screwed again in their golden years. But they never whined for, or received, all the freebies we dole out to illegals streaming across our borders.

Americans today are too willing to carry too much personal debt, for crap they've convinced themselves are "essentials." The world did fine without iPhones, cable television, and high-speed internet access.

When I was a kid, old clunker cars were all over the roads. Today, one really needs to scan the roads to find a car more than 5 or 6 years old. With such a huge percentage of the population at ease with crippling personal debt, how can they be expected to be concerned about crippling public debt?

We didn't go into the Great Depression and WWII with a staggering debt already in place. The next time a similar tragedy hits this nation what will happen when we *enter* the process already tapped out?

Liberals love to point to the high taxes of the Eisenhower era as an example for today's Republicans to follow. In actuality, the Eisenhower era was an example for them to follow. Eisenhower's administration was an era of austerity marked by *THREE* recessions. So what was so admirable about high taxes and recessions? Eisenhower was *PAYING OFF* the war debt, and knew it needed to be done to avoid burdening the future with old debt.

Eisenhower saw a need to pay off a war necessary to save the industrialized world.... now days we don't even see a need to pay off presidential kickbacks like Solyndra.

We can blame politicians all we want, but they are merely a manifestation of the reckless spending of the average American.

BTW: I don't fit that average profile myself. I have zero debt (home paid off), my annual pension will be approximately 75% of my salary, my IRAs will be able to double that pension figure when I reach 65, and I have 4 years worth of pay set aside and available on hand in the form of cash savings and securities.

What don't I have? A cellphone. High-speed internet. Cable television. And I drive an old clunker.

What am I? I'm a conservative, politically and practically.

And I can see, as clear as day, that I'm going to be screwed for living an austere and responsible lifestyle. Inflation is going to wipe me and others like me out, and force us into a dependent lifestyle the socialists want us in. Either that... or I'll be shoplifting food and eating 9 Lives like the proud old folks I saw in my teen years.

[tailfins]

I have zero doubt this is the case, *now*.

The era I'm speaking of - people who retired in the mid-1960s - were a different breed. They were people who lived through the Great Depression. They lived their lives keenly aware of the perils of debt. They were screwed in young adulthood, had their kids go off to World War II, and then screwed again in their golden years. But they never whined for, or received, all the freebies we dole out to illegals streaming across our borders.

Americans today are too willing to carry too much personal debt, for crap they've convinced themselves are "essentials." The world did fine without iPhones, cable television, and high-speed internet access.

When I was a kid, old clunker cars were all over the roads. Today, one really needs to scan the roads to find a car more than 5 or 6 years old. With such a huge percentage of the population at ease with crippling personal debt, how can they be expected to be concerned about crippling public debt?

We didn't go into the Great Depression and WWII with a staggering debt already in place. The next time a similar tragedy hits this nation what will happen when we *enter* the process already tapped out?

Liberals love to point to the high taxes of the Eisenhower era as an example for today's Republicans to follow. In actuality, the Eisenhower era was an example for them to follow. Eisenhower's administration was an era of austerity marked by *THREE* recessions. So what was so admirable about high taxes and recessions? Eisenhower was *PAYING OFF* the war debt, and knew it needed to be done to avoid burdening the future with old debt.

Eisenhower saw a need to pay off a war necessary to save the industrialized world.... now days we don't even see a need to pay off presidential kickbacks like Solyndra.

We can blame politicians all we want, but they are merely a manifestation of the reckless spending of the average American.

BTW: I don't fit that average profile myself. I have zero debt (home paid off), my annual pension will be approximately 75% of my salary, my IRAs will be able to double that pension figure when I reach 65, and I have 4 years worth of pay set aside and available on hand in the form of cash savings and securities.

What don't I have? A cellphone. High-speed internet. Cable television. And I drive an old clunker.

What am I? I'm a conservative, politically and practically.

And I can see, as clear as day, that I'm going to be screwed for living an austere and responsible lifestyle. Inflation is going to wipe me and others like me out, and force us into a dependent lifestyle the socialists want us in. Either that... or I'll be shoplifting food and eating 9 Lives like the proud old folks I saw in my teen years.

What if you diversify by setting up a vacation home and investments outside the USA?

[taft2012]

What if you diversify by setting up a vacation home and investments outside the USA?

Yes, but you really have to know what sort of realistic protections your investments will have. It's best to know people who've actually gone through with the investment process overseas for some time to see how it played out for them. There's usually a very good reason when foreigners do not invest in a particular country. Real estate is probably the least risky, financial securities a huge risk.

I have two homes in the Philippines. I'm expecting even a crashed US dollar will still bring a standard of living there.