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At its base, inflation is a monetary phenomenon. Increase the supply of money and it inevitably leads to inflation. In modern banking systems "money" is indistinguishable from debt. You do the math.
Building on to OPs question about inflation & not necessary talking about food cost. What type of future do you see where cost of goods are extremely high? I been hearing the next recession or hardship will not be a housing crash or something drastic like that but it will be where everything will cost so much more. Especially with the tariff. What do you see in next 2 years or so? Will most people have jobs yet can't afford to buy much? will human consumption go down or will everyone live off of credit card & then get screwed that way? Will we become like the Europeans whom I feel are less consumer driven, they have less space so they buy less & everything does cost more in Europe than USA.
Building on to OPs question about inflation & not necessary talking about food cost. What type of future do you see where cost of goods are extremely high? I been hearing the next recession or hardship will not be a housing crash or something drastic like that but it will be where everything will cost so much more. Especially with the tariff. What do you see in next 2 years or so? Will most people have jobs yet can't afford to buy much? will human consumption go down or will everyone live off of credit card & then get screwed that way? Will we become like the Europeans whom I feel are less consumer driven, they have less space so they buy less & everything does cost more in Europe than USA.
What will a high inflation future look like?
IMO we are experiencing a blow off top in equities fueled to a large extent by the debt orgy of the last decade. A collapse/default and reset of debts to sustainable levels will be deflationary.
Food and "recreation" of eating out are two different things...I have to assume.
I could have purchased a 50" 4K TV for $300 on Prime day, about 1/6th or less of the price as a decade ago...
So your mileage may vary.
Personally,we NEVER eat $150 dinners. We don't eat $100 dinners - well, maybe once a year if the kids or special old friends visit.
Wage growth has been fairly poor throughout my entire working life (40 years plus). Luckily, I worked for myself so this did not apply. But those I know in other jobs tended to make less and less as the years went by (downsizing, cast off and rehired as contractors, etc.)...
Even current wage growth - with low unemployment - is dismal. I think it's about even (meaning no growth) for the past year when measured against basics....even worse when put to the real world test with the higher gasoline and health care prices.
I always like to reference my own personal "base". In 1974 in a rural area of TN, my first real job was as a laborer framing houses. I didn't know carpentry, so this involved just carrying 2x4's from a pile to sawhorses and eventually cutting them to a certain length. Skill level was still almost nil.
I made $5. an hour - at the time that was not considered a lot of money. At one point we had no work and I did temp-unskilled work for $3.50 an hour. That was bottom of the barrel.
Using a basic inflation calculator the $5 today would be about $28 an hour.
The $3.50 would be $19 per hour.
This is why people have a hard time convincing me that a min. wage of $15 is excessive. We have gone so far downhill (for those at the bottom) that down looks like up.
Year before that I had a "learning job" as a dishwasher in a health food eatery. I say "learning job" because it was done to learn the healthy ways of cooking and was known to pay well below any normal wage (maybe restaurants could get away with this due to claiming tips were received..which they were not for the kitchen help!).....
That job was 1.50 an hour in 1970, which would be $10 today. Yet people don't look at $10 an hour today as being a "complete joke intern" type of wage. In some places that is even advertised as a wage to draw you in!
My, how much has changed...and it is reflected in the "inequality" numbers. These days, it appears, one is one one side of the divide or the other. There is not as much middle ground.
No, absolutely not. Lauded economist John Maynard Keynes once quipped that a modest amount of inflation in wages allows the common man a sense that he is "getting ahead". For some reason our Federal Reserve sees 2% inflation as a rational target rate. Why not 1% or 3%?
No banker or economist wants to see deflation because it can result in a death spiral of declining growth and wages as asset prices fall. While rapid inflation is unpleasant as prices and wages ratchet up, the limits of deflation are zero and death.
One common mistake: investment gain could be inflation.
If your 401k gained a lot in the past decade, then you could be wondering how this could happen, it must be inflation -- wrong, inflation is on the consumption side. Was your money's purchasing power eroded? That is the question.
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