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For folk's like me on a fixed income, or those out of work, any kind of inflation is really bad news......
"Are you ready for rampant inflation? Well, unfortunately it looks like it might be headed our way. The U.S. monetary base has absolutely exploded over the last couple of years, and all that money is starting to filter through into the hands of consumers. Commodity prices are absolutely skyrocketing, and it is inevitable that those price increases will show up in our stores at some point soon. The U.S. dollar has already been slipping substantially, and now there is every indication that the Fed is hungry to start printing even more money. All of these things are going to cause a rise in inflation."
we are sooooo far away from inflation right now.. between paycuts and and un-employment we wont have to much money chasing to few goods for quite a ways down the road. it will take me av few years just to get my pay back to what it was.
No, not really. Much of the inflation is due to cost inflation.
I guess everyone forgets just 2 years ago when ethanol plants started ramping up production and sucking corn off of the market to create a shortage, which then resulted in higher feed costs for farmers, so chicken, pork and beef prices spiked, as did all things related, such as milk, eggs and cheese, and also beverages that have high fructose corn syrup. There was about 6 months there when milk cost more than gasoline, and gasoline was averaging about $4.50/gallon at the time.
Cost inflation as it relates to food prices will continue as food crops are diverted from use as food to the production of bio-diesels and ethanol fuels.
You also had the issue of low US Dollar value which caused the price of imports (which is just about everything) to increase.
The price of clothing and other things might remain relatively stable if the US Dollar remains stable, but the price of food-stuffs will continually edge up by 1%-10% per month.
Even when prices for food stuffs are not rising, you're seeing manufacturers decrease the volume/weight of the food you're purchasing, so yes maybe you're still paying $1.89 for something, but it is no longer 16 ounces, it is now 15.5 ounces (or less).
dont confuse price increases with what inflation is.
Inflation is not always caused because prices rise. what happens is somethings may go up and if we buy those items they are at the expense of us not buying something else unless we have enough money in our hands to buy all items..
the definition of inflation could be , when to much money chases to few goods... thats a critical definition to understanding where we stand.
there are all sorts of new definitions but pretty much they all rely on us having more currancy in our hands to spend.
price increases, printing of money ,etc can all add pressure to inflationary scenerios but they themselves dont mean inflation is around the corner. the key is when we have enough money to not just buy this or that but when we can buy this and that.
we all dont have to much money at this point. thats off in the future yet if at all. most of the world is still just trying to get even with where they were and even that could be quite aways off . i dont expect to have the income i had for at least the next 2 years.
when labor costs start climbing and inventories start dropping because they are being purchased and factories are at full capacity thats a clue that we may be entering an inflationary era
Last edited by mathjak107; 10-02-2010 at 02:16 PM..
No, not really. Much of the inflation is due to cost inflation.
I guess everyone forgets just 2 years ago when ethanol plants started ramping up production and sucking corn off of the market to create a shortage, which then resulted in higher feed costs for farmers, so chicken, pork and beef prices spiked, as did all things related, such as milk, eggs and cheese, and also beverages that have high fructose corn syrup. There was about 6 months there when milk cost more than gasoline, and gasoline was averaging about $4.50/gallon at the time.
Cost inflation as it relates to food prices will continue as food crops are diverted from use as food to the production of bio-diesels and ethanol fuels.
You also had the issue of low US Dollar value which caused the price of imports (which is just about everything) to increase.
The price of clothing and other things might remain relatively stable if the US Dollar remains stable, but the price of food-stuffs will continually edge up by 1%-10% per month.
Even when prices for food stuffs are not rising, you're seeing manufacturers decrease the volume/weight of the food you're purchasing, so yes maybe you're still paying $1.89 for something, but it is no longer 16 ounces, it is now 15.5 ounces (or less).
Nice to have a competent economist in the house, Mircea. In that regard, you are appreciated. We have beginning tracking increase costs for materials in project budgets -- such as Copper is running up, now.
But what I am actually seeing on the ground in much of the real world closely matches Mathjak's observation regarding severe downward pressure on any that is even a little surplus -- like labor or housing.
What I am thinking we are seeing or going to see is -- some things are whipping upward as a Cost-Push that you are describing, some downward, as Mathjak is seeing -- so what we are actually seeing is a realignment of comparative values of entire sectors -- not so much across the board inflation nor deflation.
We have beginning tracking increase costs for materials in project budgets -- such as Copper is running up, now.
There's a temporary production shortage and some inventories are low. The ICSG just put a report out for the 1st half of 2010 about 6 weeks ago. Usage is increasing and I'm sure that's tied to development of the 2nd World (former East Bloc, Russia, Brazil and India) and expanding 3rd World Countries.
Basic infrastructure development puts a greater demand on copper (and other resources) than commercial/consumer development.
Quote:
Originally Posted by Philip T
But what I am actually seeing on the ground in much of the real world closely matches Mathjak's observation regarding severe downward pressure on any that is even a little surplus -- like labor or housing.
What I am thinking we are seeing or going to see is -- some things are whipping upward as a Cost-Push that you are describing, some downward, as Mathjak is seeing -- so what we are actually seeing is a realignment of comparative values of entire sectors -- not so much across the board inflation nor deflation.
Housing is not a perishable item like meat, dairy, vegetables or this year's summer fashions. There's no need to panic and sell now to ensure that I get at least something out of it. I can hold on to the property for almost as long as I need to, maybe 5-15 years and sell it when the market improves.
Labor is a different animal. It isn't like it was 40 years ago. Then, your starting wage with a non-union company depended on your education/experience level, and your raises varied. Now nearly all companies have fixed wage scales for new hires and for raises (mostly to avoid lawsuits for discrimination in hiring and wages).
Wages won't drop for existing employees, but the employer might lower the starting wage for new hires. Still, there's a lag-time. A temporary surplus of labor is not going to affect wages any more than a temporary shortage of labor, but long term surplus labor will eventually depress wages, but not necessarily for the currently employed. The employer could decide to revise the pay scale to eliminate raises or lower the "top-out" wage, but that normally wouldn't occur unless they were forced to cut the prices of their products or services too, and that might happen if the government continues to dump stimulus packages onto the economy.
Argue semantics and technicals all you want. I don't think many of your average voters really give a shidt over what "is or isn't inflation".
If the same amount of money could buy two loaves of bread last year only buys you one this year, that's good enough. I too get tired of these silver spoon up their behinds prima donnas sitting in their Ivory Towers utterly detached from the real world that most of us live in. They sit there and say "but there's no inflation".
Medicals gone up
My auto insurance has gone up
Damn electric bill has gone up
Property tax has gone up
Cable bill has gone up
Gas has gone up
Shaving cream's gone up
Underwear's gone up
Box of cereal has gone up (by means of a smaller box)
"Oh but we're having a recovery. We are worried about DEflation".
Shut the f**k up ok? Like hell there's "no inflation.
I still want to know what color the sky is in Ben "Dover" Bernankes world. Cuz there's no way in hell he's living on earth.
With teh growth prediction being pretty firm on being flat 'I don't look for inflation to go anyhwere.That alone will keep demand low.The only thnig I see goig up now is health insurnace rates.
Location: Prescott Valley,az summer/east valley Az winter
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Quote:
Originally Posted by Mircea
No, not really. Much of the inflation is due to cost inflation.
I guess everyone forgets just 2 years ago when ethanol plants started ramping up production and sucking corn off of the market to create a shortage, which then resulted in higher feed costs for farmers, so chicken, pork and beef prices spiked, as did all things related, such as milk, eggs and cheese, and also beverages that have high fructose corn syrup. There was about 6 months there when milk cost more than gasoline, and gasoline was averaging about $4.50/gallon at the time.
Considering that the effect of taking the sugars out of corn leaves all the protiens which is used for animal feed~ which by the way is all the corn used in making ethanol is~ making ethanol from corn only decreases amount of high fructose corn syrup to be had. And thats what everyone is blaming for obesity.
Making ethanol out of corn has had absolutely no effect on the amount of food grade corn in the world.
Please blame something else for you know not about this item.
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