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Old 08-28-2019, 06:42 PM
 
Location: Southern Most New Jersey
1,195 posts, read 860,304 times
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Inflation is too much money chasing too few goods. Well there are plenty of goods in the world right now. Many fully developed countries cracking stuff out. Several of them using slave labor. Thus low inflation.

This is not rocket science. Well maybe it is if your an economist.
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Old 08-29-2019, 03:02 AM
 
73,174 posts, read 72,988,974 times
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Quote:
Originally Posted by NJBoy3 View Post
Inflation is too much money chasing too few goods. Well there are plenty of goods in the world right now. Many fully developed countries cracking stuff out. Several of them using slave labor. Thus low inflation.

This is not rocket science. Well maybe it is if your an economist.
while that is the simple answer it is not really the whole answer since there are many forms of inflation and that definition does not apply to them all .
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Old 08-29-2019, 06:18 AM
 
1,413 posts, read 724,578 times
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Quote:
Originally Posted by Mircea View Post
... You have to understand that rationing had just ended in 1946 and not even 4 years later the Korean War breaks out in June 1950.
Americans -- meaning households and businesses -- were in total tizzy because they thought the government would start rationing again.

Flour, sugar, coffee, tea, cheese, alcohol, and a host of other things are flying off grocery store shelves, because housewives are scarfing it up thinking the government is going to start rationing again. ...
Mircea, During the post war Truman and Eisenhower's administrations, I'm unaware of “Flour, sugar, coffee, tea, cheese, alcohol, and a host of other things are flying off grocery store shelves, because housewives are scarfing it up thinking the government is going to start rationing again”.

In my family. we heard no mention of such occurrences from my NY City or Atlanta uncles regarding the grocery stores they each owned. I did not read of it in newspapers or magazines. You have links from credible (or otherwise) publications archives, reporting of such behaviors by USA housewives?

Respectfully, Supposn
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Old 08-29-2019, 11:15 AM
 
8,513 posts, read 9,263,285 times
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Quote:
Originally Posted by Mircea View Post
Recessions don't stop Demand-pull Inflation.


Neither do interest rates. In the 1970s the prime rate was as high as 19% and it sat 13% for a while and it had no affect on the housing market. People still bought homes.




But that would never have happened.

Truwoman screwed up. Period.

In 1950, nobody did polls/surveys. Those were for political elections, only.

If 1950 were 2019, you'd have dozens of pollsters asking, "Do you think the government is going to start rationing again?"

And then all the bloggers and vloggers on the internet are talking about rationing and "news" websites have quick polls, "Do you think the government is going to start rationing again?" or "Should the government start rationing again?"

Right here on City-Data there'd be a dozen threads in the P&OC and Economics Forums discussing rationing.

Once the government realizes there's ration-induced panic, it can take corrective action.

Truwoman should have gone on radio and TV and said, "I am not going to start rationing."

That would have stopped Demand-pull Inflation dead in its tracks and prices start immediately falling.

But, he doesn't do that, and neither does Eisencoward.

By the time the recession starts, households and businesses have figured out the government isn't going to start rationing and both demand and prices start dropping back to normal.

Even if that didn't happen, there was a cease-fire in July 1953, so there's no way spiking prices would have continued on for years and years.

I'll circle back later but much of that is between somewhat and significantly incorrect.

*As a technical matter the high water mark for the prime rate was in 1980 @ 20%. It was never 19% during the '70s at any time.

*"No effect on the housing market"........existing + new home sales CRATERED from the late '70s - roughly 1983.
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Old Today, 09:48 AM
Status: "Goodbye Portland, Hello Las Vegas!" (set 16 days ago)
 
Location: Henderson, NV
5,905 posts, read 6,102,202 times
Reputation: 6861
Quote:
Originally Posted by aridon View Post
So inflation comes mostly from:

Demand > Supply, causes prices to rise. This can be the result of supply imbalance, monetary policy, higher wages etc. Anything that impacts demand.

Cost push, which means input costs rise. Say when oil was upwards of $150 a barrel and this translates to higher costs throughout the economy. Tariffs, VAT and any policy that might increase costs falls under this as well.


Why are we not seeing inflation now? Well that is actually easier to explain than you would think.

We have deflation on the cost side which is keeping prices down. This is due to commodity weakness and supply costs on just about everything dropping, with some exceptions. This also plays into the next point.

We also have virtually no population growth especially without immigration, which in a demand based economy creates some serious issues. When you are growing population 2% through the 60s and 70's and now more or less even or negative without immigration that presses the brake pedal economically.

When you consider that just about everything in our economy is based on demand growth and scarcity, you remove those components and you start running into some serious issues. Like negative yielding debt and deflation. We don't have the body growth to increase demand and on top of that we are seeing deflation potential continue to rise. Very dangerous situation because if we see any further demand shocks, say due to recession, it will be VERY difficult to climb out of it when the natural growth rate is already hovering around 0% and we have utilized all our stimulus options.
If our system only works when the population is growing, it’s going to be time to go back to the drawing board because the planet is overpopulated and more people than ever, including me, have realized what a terrible deal it is to have kids. There’s no logical benefit or reason behind it at all, which is why birth rates in educated nations and people are much lower. The economy will have to adapt because it can’t just succeed like a giant pyramid scheme when there are constantly more people added.
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