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Old 01-05-2018, 02:42 PM
 
64,708 posts, read 66,206,532 times
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Quote:
Originally Posted by engineman View Post
Inflation is a penalty to those (mostly retirees) who live on fixed income. The govt uses bogus numbers to measure the cost of living for Social Security. Then they borrow money and with inflation it is worth less when they pay it back.

Both parties are equally guilty.
retirees should never be 100% fixed income if they need the money to live on . since 1871 fixed income has failed to last at a 4% draw more than 1/2 of the 117 30 year time frames to date . it is the riskiest allocation of all .

it lasted through only 45% of the 117 periods . a 50/50 mix lasted through 96% of them .

the cpi is not reflecting any ones cost of living . it is just a price change index taking the temperature of the 1500 different mini economies that make us up . .

it was never meant to representative of anyone's cost of living nor can it be .

many of the things measured don't apply to us nor do we have a use for them .

how many times you buy something , the quality of it , because higher end goods have bigger price increases but last longer and how willing you are to substitute matters too .

i know my cost of living is lower than two years ago . living in nyc 1/2 of all rentals are stabilized and had no rent increases in 2 years . that effects millions of people .

i went from very very high health insurance to medicare .

my sister refinanced and has a budget less than 5 years ago .

many retirees with discretionary income end up not buying or doing a lot of things as they age , that offsets a lot of increases in the things they still spend on .

so all of us are very different when it comes to inflation .

the cpi is not phoneyed , it is as good as we can get it for something this complex , but people expect it to represent what they see and it can never nor is it designed to .

Last edited by mathjak107; 01-05-2018 at 03:04 PM..
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Old 01-05-2018, 06:04 PM
 
2,360 posts, read 1,031,855 times
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Quote:
Originally Posted by Larry Caldwell View Post
You don't need higher wages if you have falling prices.

Right, but we dont have falling prices, instead we have increase prices every year/month due to so call price and demand syndrome. Kinda like the FORD assembly line, keep raising it faster and faster till they complain then stick at that level. Slowly sneak it up again later on in the week without telling them and see if they complain again. If not, keep doing it over and over. Pretty much what were doing with prices, and seems the market is aiming at the higher end of the middle class-upper class group then the lower-middle class group that works the most. Funny how they keep charging for things like the internet when its the same internet coming and going, and it paid for itself decades ago. What were paying now is executives new mansions and boats. ( just a example)
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Old 01-05-2018, 06:37 PM
 
9,108 posts, read 3,718,308 times
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Quote:
Originally Posted by Larry Caldwell View Post
You don't need higher wages if you have falling prices.
America has falling prices, Walmart and all the consumer goods have fallen in price. Americans bought into that lifestyle, it's too late to complain about it

everyday companies are working to lower prices for their customers
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Old 01-05-2018, 06:52 PM
 
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Quote:
Originally Posted by MLSFan View Post
America has falling prices, Walmart and all the consumer goods have fallen in price. Americans bought into that lifestyle, it's too late to complain about it

everyday companies are working to lower prices for their customers
IF they have a competition in that group/city/state such as cellular companies. Companies like cable and internet were they have claim territories your stuck with their rates. If your town try to build their own ISP or cable provider, the wrath of lawyers are swatting the town.
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Old 01-05-2018, 06:58 PM
 
9,108 posts, read 3,718,308 times
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Quote:
Originally Posted by hitpausebutton2 View Post
IF they have a competition in that group/city/state such as cellular companies. Companies like cable and internet were they have claim territories your stuck with their rates. If your town try to build their own ISP or cable provider, the wrath of lawyers are swatting the town.
so what rate would you pay for any service if they weren't there? if you are happy with no service, you don't have to use them. if you want cheaper service, don't live in such a rural area
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Old 01-05-2018, 09:06 PM
 
Location: Cebu, Philippines
2,207 posts, read 809,524 times
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No. It could, but it won't. Inflation discourages saving and favors debt creation. The powers that regulate and drive the economy all have a personal interest in increasing debt and reducing savings, to keep consumers spending money, which tends to flow toward the wealthy interests who regulate the economy in their own favor.

Walmart lowering prices is not a relevant indicator. By lowering the price of a product, they are increasing the sales volume. In other words, if a community's retailers in an inflationary economy reduce the price of a single widget, there will be more widgets sold. While the price of a widget may go down, the amount of money spent in the marketplace for widgets will go up.

When there is a pizza war, the price of a pizza goes down, but that is more than offset by the number of pizzas sold and the total amount spent on pizzas.
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Old 01-06-2018, 01:39 AM
 
Location: Myrtle Creek, Oregon
11,068 posts, read 11,474,429 times
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Quote:
Originally Posted by Hoonose View Post
There would need to be consistent falling of prices in most necessities of life all across the country and over time.

The only way to be consistent would be through the currency, and that is not going to happen.

"The modern currency float has its problems. There is no magical monetary cure, monetary policy is a policy area almost uniquely crowded with trade-offs and lesser evils.

If you want a classical gold standard, you get chronic deflation punctuated by depressions, as the U.S. did between 1873 and 1934.

If you want a regime of managed currencies tethered to gold, you get regulations and controls, as the U.S. got from 1934 through 1971.

If you let the currency float, you get chronic inflation punctuated by bubbles, the American lot since 1971.

System 1 is incompatible with democracy, because voters won’t accept the pain inherent in a gold standard.

System 2 is incompatible with the free market economics I favor.

That leaves me with System 3 as the worst option except for all the others."

David Frum
All you need for falling prices is rapidly increasing productivity, which we have. Inflation is an artifact of the monetary system and federal policy, not an underlying necessity.

It's interesting you would mention 1873, which was only a depression in the stock market. The GNP grew 7% during that "depression" with attendant falling prices. Almost everyone ended up better off. The stock market is subject to wide fluctuations triggered by the inability to service debt. It's not a foregone conclusion that falling stock prices will have an adverse affect on the economy. Rapid deflation would compensate for falling investments. The only ones who would be hurt by deflation would be debtors, who would be stuck repaying loans with rarer and more valuable currency.
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Old 01-06-2018, 03:29 AM
 
Location: Silicon Valley
2,772 posts, read 1,217,970 times
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Quote:
Originally Posted by hitpausebutton2 View Post
With things going up and up, but not checks. What is the purpose of inflating the market? And yes i did do some reading and cost-push is the cause of over pricing?

Why is it hard to keep the prices in check while increasing wages?
Cost-push inflation is due to wage increases that cause businesses to raise prices to cover higher labor costs, which leads to demand for still higher wages (the wage-price spiral)

Read more: What is inflation? definition and meaning - BusinessDictionary.com
Inflation goes up with increasing wages because....in a sense, it's the only cost.
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Old 01-06-2018, 07:43 AM
 
25,840 posts, read 49,753,618 times
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Some benefit by inflation... especially those with long term fixed debt...

When in doubt... follow the money.
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Old 01-06-2018, 07:47 AM
 
64,708 posts, read 66,206,532 times
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when many of us bought our first homes in the 1970's homes in long island were 30-35k .

that mortgage was crushing back then and far more than rent .

well today takes are 15k and that paid off mortgage did nothing for affordability . it does not even equal your utility bills .

one correction though , it is not the long term debt that benefits from inflation .

it is what you buy that matters . i can take on long term debt and buy treasury bonds and get crushed by inflation . on the other hand i can buy a home , but a homeowner with no debt on the house benefits just the same .

debt is not initself an inflation hedge , it only allows you you to buy an inflation hedge . but owning that hedge with no debt gives you the same benefit .
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