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It's true companies are shaving food quantities in packaging while raising prices, but given the endemic obesity in the US, that might not be a bad thing. Maybe people will start to consume realistic portion sizes.
Doubling in 8 years occurs at a compound rate of 10.4%, and gas averaged $3.04 per gallon over the Labor Day wekend in 2005. Nonsensical cherry-picking without a point is what's irrelevant.
Who compounds inflation rates?
Quote:
Originally Posted by oaktonite
Yes, it is an average that is arrived at every two years by a cast of thousands trained in the field. Meanwhile, I take it that you have now retracted your ridiculous claim that food and energy are excluded from the CPI-U and will never repeat such nonsense again?
There are several CPI rates, as you fully know, but you are are lacking in all ethics to the point that you are tying to act as if there is only one, and that it includes food and energy when the most used index by the majority of economists does not.
The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy.
The only nonsense around here is what you continue to spew with your posts.
As I said before your posts add nothing to the discussion here so I would greatly appreciate it if you would go watch cartoons or something.
Bubble generally means speculation in assets financed by credit. That's not the case currently with either the bond market or the real estate market.
No, that's Speculation.
And so long as there is excess credit available for housing, and artificially depressed interest rates, and government-backed housing loans, and idiotic policies that allow home-owners with government-backed loans to have HELOCs and 2nd/3rd Mortgages, the problem will continually repeat itself from here on out.
Quote:
Originally Posted by bale002
Also I don't believe in hyperinflation.
You will....you will believe soon enough. In about 12 years you'll see double-digit Real (Monetary) Inflation, with Cost-push Inflation on top of that, and Demand-pull Inflation on top of that.
[quote=bale002;29589091]The US economy is not suffering from a crisis of production; on the contrary, if anything there is a surplus of capacity. The problem is stupid overconsumption, and even that problem is being addressed somewhat with the so-called sequester.[/quote\
No, the problem is the very same problem in the Great Depression.
The Electromechanical Industrial Revolution plus advances in manufacturing methods and process, led to tremendous efficiency, but also Surplus Labor and no place for it to go.
Now you have developing-States plus technology creating Surplus Labor.
Barring a world war in which you draft 6 Million troops, half the world is destroyed, the Marshall Plan, a new version of the Bretton Woods Agreement, and an horrid foreign policy that sows destruction, there's no escape for you this time.
Quote:
Originally Posted by bale002
Interest rates are kept low to help those who borrowed above their means in the mid-2000s to stay afloat and to stimulate those with cash to keep investing in real assets.
That doesn't make any sense. Artificially depressing the interest rates only helps those idiots with variable rate mortgages.
Quote:
Originally Posted by bale002
I also agree that the economy on US soil is suffering, or has suffered, from great losses of good jobs due to outsourcing.
So....you're nothing more than a Stalinist supporting Command Economics?
Would you like a dictionary link to the definition of "competition?"
If you cannot compete globally.....too damn bad....you should have thought about the consequences before embarking on a foreign policy that would create the conditions where you cannot compete globally.
Quote:
Originally Posted by bale002
If I had been the policymaker, I would have ensured that the pace of globalization remained slow and avoided the stupid overconsumption of the mid-2000s which helped financed the too rapid pace and also paid for the noose around the neck of average workers in the countries of early industrialization like the US.
So....we have confirmation that you are a Stalinist, and that you are an Elitist.
How ironic that you fail to realize it is precisely because your heavy handed foreign policy caused globalization to remain slow from 1898 to 2000 that is the cause of your current problems.
You cannot stop globalization, because you are not globalizing.....it is BRIC -- Brasil, Russia, India and China --- who are doing the globalizing and you cannot stop them, and they will win in the end, because of your short-sightedness.
The only thing the US is doing with respect to globalization is reacting after the fact....good job closing the barn doors after the horses got out.
Quote:
Originally Posted by bale002
A crisis of production expressed in monetary terms.
That fails to explain hyper-inflation in both Zimbabwe and the Wiemar Republic, not to mention a few dozen other countries.....Romania is one that has experienced constant hyper-inflation.
As I have explained ad nauseum, the US is neither Zimbabwe, nor the Wiemar Republic nor any of the other hapless States that have experienced hyper-inflation.
That is not to say that the US never experienced hyper-inflation, because it did....
1806-1820
1861-1874
1915-1928
1971-1984
Some where worse than others....the Civil War period was far worse, followed by the post-WW I Era, the early Republic and then the Nixon-Carter years.
Regardless, production was not an issue, although production did compound problems during the Civil War Era.
It's true companies are shaving food quantities in packaging while raising prices, but given the endemic obesity in the US, that might not be a bad thing. Maybe people will start to consume realistic portion sizes.
Whether or not it is a good or bad thing depending on your opinion, it is a dishonest thing and an attempt at hiding inflation.
Whether or not it is a good or bad thing depending on your opinion, it is a dishonest thing and an attempt at hiding inflation.
How is it dishonest? It would only be dishonest if the label read x quantity when in fact it was less. It's not an attempt to hide inflation at all--just the opposite. If anything, it could help people stay on budget by paying the same price they were before, even if it is for less food.
How is it dishonest? It would only be dishonest if the label read x quantity when in fact it was less. It's not an attempt to hide inflation at all--just the opposite. If anything, it could help people stay on budget by paying the same price they were before, even if it is for less food.
It is dishonest because producers as a rule, do everything possible to hide the fact that they are cutting quantity in order to keep from raising prices. The psychological effect on the customer is that they do not realize they are getting less for their money and as a result do not adjust their spending habits to accommodate for the inflation they do not know is happening.
...one of my criticisms of the Trustees for the OASDI and HI (Medicare) Trust Funds is that they rely heavily on the Taxation of Benefits as a source of revenues for those Trust Funds, and the amounts are unrealistic.
HI benefits (Medicare Part-A) are not taxed at all. SS benefits are partially taxed above certain limits depending on levels of other income received. Revenue from such taxation in 2012 was $27.3 billion, or about 3.2 % of all SS receipts during the year which amounted to $840.2 billion. Maybe the meaning of "heavily rely" can be distorted enough to cover that, but certainly not in my book.
Quote:
Originally Posted by Mircea
In other words, the numbers the Trustees are seeing now are the result of retirees on very generous pension plans.
Actually, the income that may trigger taxation of SS benefits is not limited to that from employment-based pensions. It is ALL income from ALL sources worldwide, including those which may otherwise be tax-exempt, plus one-half of SS benefits.
Quote:
Originally Posted by Mircea
Those pension plans are what pushes retirees over the threshold so that their Social Security Benefits are taxed. Those very generous pension plans will give way to those pensioners on meager pension plans, eventually giving way to 401(k) plans. The 401(k) plans will not generate retirement funds even remotely equivalent to pension plans, and the result is that the revenues from the Taxation of Benefits will decline over time, not increase (as the Trustees predict), even with the $25,000 threshold being static.
Where defined benefit pensions are basically fixed flows by definition, a 401-k is a lump-sum stock that a retiree may draw from as desired or needed. The SS Trustees do a lot of odd math alright, but theirs is much better than yours in this case.
The collapse in household and business demand that proceeded from all those chickens coming home to roost in the face of years worth of miserable laissez-faire economic policy caused capacity utilization to decline.
What? No such policies existed. Laissez-faire means no interference, not by government, not by special interest groups, not by anyone.
Not only does government not interfere, the government blocks others from interfering as well. For example, the government should have forced the American Hospital Association to disband and imprisoned its directs and members for having interfered in the healthcare system and screwing it up.
Quote:
Originally Posted by oaktonite
The actual problem is underconsumption, and the sequester is only making matters worse.
No, the problem is Surplus Labor....and you have Surplus Labor because you cannot compete globally...thus global under-consumption of Made in America goods.
Why did South Korean LG Corporation take over the former US Zenith Corporation?
Under-consumption? Yes, for Zenith, but not for LG Corporation who could sell their product globally to 6 Billion people for a profit, and then use their massive profits to buy out the hapless Zenith Corporation, who was limited to selling to Americans and Canadians, since none of the other 6 Billion people on Earth could buy Zenith products.
Long Wang in Vietnam earns $1.35/hour operating his Japanese-made Nissei plastic injection molding machine that produces 12 plastic kitchen gadgets per hour.
Hi Chin in China earns $1.45/hour operating his Japanese-made Nissei plastic injection molding machine that produces 12 plastic kitchen gadgets per hour.
Batalog in the Philippines earns $1.60/hour operating his Japanese-made Nissei plastic injection molding machine that produces 12 plastic kitchen gadgets per hour.
Cosmin in Romania earns $2.25/hour operating his Japanese-made Nissei plastic injection molding machine that produces 12 plastic kitchen gadgets per hour.
Fat Union Fred in the US earns $30/hour operating his Japanese-made Nissei plastic injection molding machine that produces 12 plastic kitchen gadgets per hour.
And for the record......those are all premium high-paying wages in each respective State....and the Laws of Economics via the Law of Supply & Demand sets the wages in all States except the US...where the union interferes and drive up wages in violation of the Laws of Economics.
Question: Who is the most productive?
Answer: That is in fact a trick question, because they are all equally productive producing 12 plastic kitchen gadgets an hour.
Fat Union Fred sold 4,000 plastic kitchen gadgets @$4.95 = $19,800
Cosmin sold 18,000 plastic kitchen gadgets @$0.95 = $17,100
Now.....according to Liberals....Fat Union Fred is more productive, since he sold an higher dollar amount than Cosmin, and based on that, Fat Union Fred should get an hefty raise....never mind the fact that Fat Union Fred is about to lose his job, because the others can sell globally to 6 Billion people for a profit and Fat Union Fred cannot.
Quote:
Originally Posted by oaktonite
Blame the victim. The whole liturgy of "borrowed beyond their means" is a faithless caricature of actual events.
0% down is prima facie evidence that they borrowed beyond their means.
1975
Median Home Price: $37,200
Mean Home Price $39,500
Mean Wages: $8,630.92
Mean Home Price / Mean Wage = 4.58
2005
Median Home Price: $223,100
Mean Home Price $283,000
Mean Wages: $36,952.94
Mean Home Price / Mean Wage = 7.66
Additional proof they were borrowing above their means.
Seriously! It's become a sort of magic-wand term that people use in an attempt to avoid having to explain how something actually happened. There wasn't a dot-com bubble. The world of IT continued to expand through the turn of the millenium as it had in the years before and did in the years after. There was a spate of fraud and boardroom criminality that was compounded by a crisis of confidence in the polices of a new administration, but no dot-com bubble existed or burst.
Yes, there was.
There were thousands and thousands of "internet businesses" that had IPOs.
They suckered in millions of novice investors not experienced in reality (or investing).
As soon as the serious investors saw the "dot.coms" for what they were --- 5 Generation Y-Work turds in a fancy office with $Billions in stocks outstanding, $0 in assets, $0 in cash, $Billions more in liabilities and they hadn't turned a profit...and never would...they pulled the plug.
Quote:
Originally Posted by oaktonite
There was no housing bubble either. Residential real estate markets responded exactly as they should have to a drop of some 335 basis point in 30-year fixed mortgage rates between mid-2000 and mid-2003. What caused the ultimate crisis was predatory practices in and around Wall Street and a refusal to interfere with any of that in Washington.
No, that isn't how it happened.
In the first place, you had way to much available credit for mortgages...that's Interest Inflation and in artificially inflates the value of housing.
Second, interest rates were already artificially depressed.....that's also Interest Inflation which serves to artificially inflate the value of housing.
Third, you had government-backed mortgages....more Interest Inflation though damage can be limited (but not eliminated) if managed properly (it wasn't).
Fourth, there is and always will be a glass-ceiling on home-ownership levels in the US for any number of very valid and legitimate reasons.
Finally, you let people with government-backed mortgages have HELOCs, 2nd Mortgages and 3rd Mortgages.....you know, because people "need" to spend to drive the economy.
With respect to the latter, that is an insane policy. I am not ethically or morally obligated to back the mortgages of other people.....although I might consider doing that if Society-at-Large would benefit,
However, no one could ever construct an argument showing that I was ethically and morally obligated to subsidize people's life-styles who were living well beyond their means --- and the HELOCs and 2nd/3rd Mortgages are prima facie evidence of that.
Why should tax-payers be on the hook for someone's over-spending-spree? Their cruise in the Caribbean? Their consolidated credit card and auto loan debts?
So.....when BRIC --- to everyone's surprise (even mine) --- started ramping up development of 3rd and 4th World States....you got caught with your pants down....you couldn't (and still can't) compete globally, and so you lost jobs, which is what triggered the massive wave of foreclosures.
You didn't just magically mysteriously start losing jobs....the first wave came with the Clinton Recession, and even though the GDP recovered, you continued to bleed jobs even up through now. Worse than that, people who regained employment did so at lower pay rate....meaning household incomes declined.
So whether the Obama Tax Cuts enacted by Bush came to be or not, the bottom line is federal personal income tax revenues were going to decline....no doubt about it.
And what has changed?
Nothing....there's still way too much credit available for mortgages, the interest rates are way too low, the government backs way too many loans, the government still wrongfully sticks tax-payers with the bill for HELOCs, 2nd and 3rd Mortgages, and there is still a glass-ceiling.
Change #1: persons on government-backed loans are barred from obtaining HELOCs, 2nd Mortgages and 3rd Mortgages.
Change #2: separate mortgages and place them in a separate pool...to avoid dragging down banks in the future.
Change #3: allow the Market to set the interest rate for mortgages for each of the 1,539 functioning economies in the US based on Supply & Demand for mortgages.
Change #4: limit the amount of available credit for mortgages.
Quote:
Originally Posted by oaktonite
So that would cover the Great Depression, the Reagan Recession, and the later of the two Bush-43 Recessions.
That's nonsensical.
The Great Depression was caused by Surplus Labor.
9The Carter-Reagan Recessions were caused by regional shifts in Capital: textile mills in New England fled the oppressive union and tax regimes for Southeast US; manufacturing fled the Rust Belt from the oppressive union and tax regimes in the Midwest to the South and Southwest; and technology fled the East Coast to go to the West Coast in order to be nearer its supply chain (Asia).
Once the Capital shift was complete, the economy resumed.
The Bush-the-Elder Recession was caused by a shift in Capital from the Defense sector of the economy (end of the Cold War) to other sectors of the economy.
Once the Capital shift was complete, the economy resumed.
The Clinton Recession was caused by Surplus Labor from Millennium Fever and Y2K Hysteria, as well as technology, plus a shift in Labor & Manufacturing Capital from the US to other parts of the World.
The Capital shift has not finished and while the economy recovered GDP, it retained Surplus Labor
The Bush-the-Younger Recession was caused by Surplus Labor created by a shift in Labor & Manufacturing Capital from the US to other parts of the World, plus technology.
The Capital shift has not finished and while the economy recovered GDP, it continues to retain Surplus Labor
Quote:
Originally Posted by oaktonite
Since all national debt and cuirrency are backed by the real goods and services output by the issuing economy, an actual or sometimes even a feared drop in GDP can cause people in ever greater numbers to seek conversion out of one currency and into another. When that option is available, hyperinflation typically occurs. When it isn't, it typically doesn't.
That's true in part, but it doesn't explain inflationary cycles in the US.
Excess currency relative to demand and GDP can create Real (Monetary) Inflation. That is effectively what happened in the 1970s, and the situation was exacerbated by Wage Inflation, Cost-push Inflation and Demand-pull Inflation (which made the Real Inflation appear worse than what it actually was).
A few years ago when I calculated the Coefficient of Absorption (a laboriously pain-staking process), the Global Economy can handle another $9 TRILLION to $13 TRILLION in excess US Dollars before you start seeing evidence of Real Inflation.....and that would only be slightly higher than the normal 2%-3% annual Real Inflation rate.
What I would expect, is that Europe emerges from the funk far earlier than the US, a global shift in reserve currencies and international trade currencies, and suddenly the US has hyper-inflation running in the 25%-35% range annually.....worse than the post-WW I Era but not as bad as the Civil War Era.
And so long as there is excess credit available for housing, and artificially depressed interest rates, and government-backed housing loans, and idiotic policies that allow home-owners with government-backed loans to have HELOCs and 2nd/3rd Mortgages, the problem will continually repeat itself from here on out.
The assumption here is that cheap credit is available for the average person. It is not. There is no large market for mortgages out there, people for the most part do not have the credit rating or the income to qualify for mortgages. Only people with very strong credit ratings and financial backing are benefiting from today's low interest rates.
Quote:
Originally Posted by Mircea
You will....you will believe soon enough. In about 12 years you'll see double-digit Real (Monetary) Inflation, with Cost-push Inflation on top of that, and Demand-pull Inflation on top of that.
I am afraid you might be right here, on top of needing to print money to back fill the shortfall between spending and revenues, the government is going to have to print the money to pay Social Security and Medicare commitments. This is going to be highly inflationary.
Quote:
Originally Posted by bale002
The US economy is not suffering from a crisis of production; on the contrary, if anything there is a surplus of capacity. The problem is stupid overconsumption, and even that problem is being addressed somewhat with the so-called sequester.
Quote:
Originally Posted by Mircea
Barring a world war in which you draft 6 Million troops, half the world is destroyed, the Marshall Plan, a new version of the Bretton Woods Agreement, and an horrid foreign policy that sows destruction, there's no escape for you this time.
You may have just hit on the solution here.
Worldwide depression, which is exactly what we have here usually does end in war. It is the ultimate reset button. It reduces the excess population, it creates need for manufacturing and it destroys excess capacity. It is in fact the only solution. Not that I am advocating this solution, but putting yourself in the position of the powers that be, at some point in time the current situation will result in public unrest at home and the way despots stay in power is to redirect peoples anger away from government and in the direction of some outside enemy.
Quote:
Originally Posted by Mircea
That doesn't make any sense. Artificially depressing the interest rates only helps those idiots with variable rate mortgages.
People with variable rate mortgages are simply the ants eating the crumbs under the picnic table. The major benifactors of artifically depressed interest rates are the banks who can borrow billions and reinvest in Government paper, equities, and overnight lending at a profit. The profit of banks is why interest rates are driven artificially low.
Quote:
Originally Posted by Mircea
If you cannot compete globally.....too damn bad....you should have thought about the consequences before embarking on a foreign policy that would create the conditions where you cannot compete globally.
Tariffs have been used successfully to protect domestic markets for thousands of years. Current trade policy is detrimental to the people of the US and only benefit corporate and banking interests.
Quote:
Originally Posted by Mircea
You cannot stop globalization, because you are not globalizing.....it is BRIC -- Brasil, Russia, India and China --- who are doing the globalizing and you cannot stop them, and they will win in the end, because of your short-sightedness.
Mircea
This is not entirely accurate, in fact the majority of "globalization" is being driven by former US based corporations. Proof of this is evident to anyone who travels globally. You have a hard time telling exactly where you are in any major urban center today because where ever you go you are looking at the same major retailers. Wallmarts, Starbucks, McDonalds, KFC, Hilton, Macys, Microsoft, Pizza Hut, Costco, and many other home grown companies are there to welcome you sucking up consumers spending in almost city worldwide. The corporations who consider themselves "world citizens" now have no allegiance to the US or to the people of the US. The US could adopt a trade policy much like Germany's which looks out for it's own citizens, but the corporations are in charge of the government and their interest is the only one being looked after in Washington.
Ever increasing inflation? Everything they've done so far has barely staved off deflation.
Printing does not = inflation.
Quote:
Originally Posted by Colorado xxxxx
Bingo we have a winner! Chicken dinner for you!
Most people on this thread have no concept the velocity of money without money moving there is no inflation on large scale inflation is required for a fiat money system.
Correct. The big spike in the 1970s there should have been a clue.
Good for you guys.
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Originally Posted by bradykp
the price of oil will continue to go up. demand around the world is increasing. get used to it. that's not inflation - that's supply and demand of a finite resource.
Actually that is Demand-pull Inflation.
Quote:
Originally Posted by jertheber
One of the most overlooked aspects of the western economies is that they have been, for the most part, charades right from their beginnings.
Your central thesis is correct, but your evidence does not support your claim.
Quote:
Originally Posted by jertheber
That's the beauty of modern day capitalism, very few question it's shadowy, dubious side.
There's nothing dubious about Capitalism --- which is a Property Theory and not an Economic System.
Perhaps you're referring to the Free Market Economic System, which is often paired with Capitalist and Socialist Property Theory.....and could be used with Communist Property Theory, but it has never been attempted.
Even if you would be referring to the Free Market Economic System, your evidence still fails, since you do not have a Free Market System.
You have a Quasi-Free Market System (largely in name only), that is heavily interfered with Soviet-style Command Economics.
For example, when the American Hospital Association banded together member hospitals to stifle competition and drive non-member hospitals out of business in 1939, that is an example of Soviet-style Command Economics.
The government should have interfered to stop it.
Another example: when the American Hospital Association started dictating what an insurance policy must cover and the prices for such services ---also in 1939 --- that is an example of Soviet-style Command Economics.
Still another example: when the American Hospital Association started lobbying State legislatures for "enabling laws" or "enabling legislation" (terms used in history and economic texts to describe the Soviet-style tactics used by the American Hospital Association) in order to skirt or circumvent insurance rules and regulations during the period 1939 to 1946 to gain an unfair competitive advantage over insurance companies, that is an example of Soviet-style Command Economics.
And still yet another example: when the American Hospital Association created the Blue Cross insurance company in 1946 (after using "enabling laws" or "enabling legislation" to gain an unfair competitive advantage), and then continued its policy of "Out-of-NetworK" fees and charges it created in 1939, that is also an example of Soviet-style Command Economics...
....you see when the American Hospital Association grouped member-hospitals together to pit against non-member hospitals to stifle competition, one of the policies the American Hospital Association created was "Out-of-Network" to punish you if you attempted to exercise freedom of choice and engage in Free Market activity and select the hospital of your choice.
And, why, yes, the American Hospital Association co-wrote Obamacare along with the IRS and H&HS.
That's no different than the American Federation of Dairy Farmers -- a group of Big-Agro Corps like Monsanto, Cargill, Con-Agra and other giant corporate dairy farms et al -- who control the dairy market in the US through lobbying efforts, with the end result being that you pay more than you should be paying for dairy products.
Quote:
Originally Posted by jertheber
Crash??? How about a slow painful demise that will be reminiscent of the final days of those other once great empires now covered in dust.
You're 6 years too late, and $12,000 short.....I already predicted that here on C-D back in 2007, about a month before I predicted the recession and its length and its effects.
The worst is still to come. So-so through October, at which point things will begin to slide. If you want a Republican president in 2016, vote Democrat in the 2014 Mid-Term...otherwise vote Republican....although people will probably (and correctly) blame Obamacare for future economic problems (not to mention the Social Security and Medicare fiascos), it might be a surprise.
Centrally...
Mircea
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