is stagflation already here? (China: sale, real estate, insurance)

[maine4.us]

I know stagflation is high unemployment and high rate of inflation. Some might argue that inflation isn't that high..... but in fact you must weigh in flat wages for several years. Unemployment, we have out the kazoo, they say we don't have a high rate of inflation, but have you noticed prices keep creeping up on everything? So why is this happening? People have tightened their belts until their belly has a groove, a raise is when your boss gives you a Boston telephone book to sit or stand on, and many people I know have lost their jobs and more are losing them daily. Anybody have a particular explanation for this? Why are prices rising in a down economy? Supply and demand doesn't cut it now. Demand is low and supply is too, does that mean terminally high unemployment from now on?

[dmyankee]

I am not an economist and don't play one on tv.

November 2nd is coming. Stand up and demand change. We need to clean out the Blain House and the Legislature and the Congress.

If all continues as normal, taxes are going to rise FOR EVERYONE, this next year. Until the burdens of taxation and regulation are removed from the People, we will be looking at the misery index. Those who lived through the Carter years know about that. In all other Socialist countries, 10% unemployment is the norm. Inflatiion is happening but they do not count oil and food.

If Dick Morris is right, we are about to decimate the entire baby boom generation of Democrats in the Congress. Lets do the same for Disgusta!

[OutDoorNut]

Originally Posted by maine4.us

I know stagflation is high unemployment and high rate of inflation. Some might argue that inflation isn't that high..... but in fact you must weigh in flat wages for several years. Unemployment, we have out the kazoo, they say we don't have a high rate of inflation, but have you noticed prices keep creeping up on everything? So why is this happening? People have tightened their belts until their belly has a groove, a raise is when your boss gives you a Boston telephone book to sit or stand on, and many people I know have lost their jobs and more are losing them daily. Anybody have a particular explanation for this? Why are prices rising in a down economy? Supply and demand doesn't cut it now. Demand is low and supply is too, does that mean terminally high unemployment from now on?

By rights, I suspect inflation would be through the roof these past tweny years, since most of that time loans of all kinds were cheap, and still are cheap.

BUT during that time, more and more things we buy are made cheaply overseas.

For example, today I can buy a shirt for very nearly what I paid in 1990 for an American made shirt.

However, during this same time the cost of things that are not produced overseas, has skyrocketed.

Things like real estate, college tuition, health care, and insurance.

Can you imagine how much a shirt would cost if it were still made in the USA?

So because the official inflation rate has been so low because of foreign made goods and services, the Fed was able to get away with lowering interest rates more and more and more, without causing the official inflation rate to rise--which rise would have made it impossible to keep flooding the economy with cheap money.

Meanwhile, as the standard of living improves in such places as India and China, the cost of labor in those countries will rise and is in fact rising.

The end result could be that it will some day cost as much or more to make something overseas as it costs to make it here, only we won't know how to make it here anymore.

I suspect most Americans have been "had" by wall street and their bought and paid for politicians.

Even now, the banks are making money by borrowing at zero interest from the Fed, and then using that money to buy treasuries.

So the government in effect lends the banks money, and then pays the banks interest to loan it back to the government.

In the end, we the people will end up paying for this, through inflation and/or higher taxes.

There is no free lunch.

[OutDoorNut]

Originally Posted by maine4.us

Anybody have a particular explanation for this? Why are prices rising in a down economy? Supply and demand doesn't cut it now. Demand is low and supply is too, does that mean terminally high unemployment from now on?

Keep an eye on the dollar exchange rate.

If the value of the dollar falls relative to a foreign country's currency, then it will take more dollars to buy things made in that foreign country.

And cost more for raw materials from that foreign country, which raw materials when used to make consumer goods, will cause the price of those goods to rise.

[retiredtinbender]

Originally Posted by maine4.us

I know stagflation is high unemployment and high rate of inflation. Some might argue that inflation isn't that high..... but in fact you must weigh in flat wages for several years. Unemployment, we have out the kazoo, they say we don't have a high rate of inflation, but have you noticed prices keep creeping up on everything? So why is this happening? People have tightened their belts until their belly has a groove, a raise is when your boss gives you a Boston telephone book to sit or stand on, and many people I know have lost their jobs and more are losing them daily. Anybody have a particular explanation for this? Why are prices rising in a down economy? Supply and demand doesn't cut it now. Demand is low and supply is too, does that mean terminally high unemployment from now on?

Get usaed to it. What others cal stagflation we and the rest of Wash. Cty call normal.

[Submariner]

The economy is bad, it has been bad.

I do not see anything happening to fix it.

Increased government spending will translate into higher taxes; so huge increases in taxes will be coming at us eventually. I do not see how those increases could possibly be slow and gradual.

I had a link to a webpage on the DOL.gov site which gave the Unadjusted Unemployment rate nationwide [the raw data before they skew it to match the political message]. It was climbing and in May it was at 23%. Just two percent lower than it hit in 1935 when it peaked at 25%. But then about the end of May the DOL took down that webpage.

Since then I have been running a daily google-alert looking for the real Unemployment numbers, but the government is no longer releasing those numbers. So it must be high.

With the BP oil leak I was expecting to see the oil refineries shut-down. Had the oil blocked the shipping lanes and stopped fresh crude from getting into the refineries on shore. If that had happened we would have seen gasoline climb up past $5/gallon quickly.

I do not see much of a light at the end of the tunnel.

May God bless us all.

[Zymer]

For far too many years people have been encouraged (brainwashed) to be "consumers"- buy buy buy, consume consume consume, instant gratification, easy credit buy now pay later.

Well, "later" is here and we're all paying.

I don't believe that it's a sustainable economic model, you can't just keep buying and buying and buying, sooner or later you have to pay the piper. What really bothers me is that the talking heads keep talking about "getting the economy back on track", "getting consumers to start spending money again". Hello? That's how we got where we are now, it's kind of like the engineer ordering the fireman to keep shoveling coal into the boiler of a runaway train.

There has also been the problem of jobs moving offshore as ODN mentioned. I think a big part of that has been due to the unions. There was a time (before minimum wage laws, etc.) when the unions were a good thing, getting better wages and benefits. But they've gotten too big for their britches, demanding more and more and more. Well, that's just fine and dandy, for them...for a while. Eventually they price themselves out of the market so that the people can't afford to buy their goods and the manufacturers move production out of the reach of the unions in order to be able to make a product that the people can afford to buy. The unions have shot themselves in the foot, it's time for them to go away.

I could go on a huge rant here, but I won't. I just think it's time we teturned to a simpler practice of economics, buying what you need to survive (that you can't produce for yourself) and saving and paying cash for "luxury items".

[wabanaki]

now try compare price for wood screws, i used to pay $1.38 for 1 lb box, now it cost $8.25 for 1 lb.
I ask the sale person why so expensive, he said it import from China, with high tariff impost by the US gov and transportation cost and we not make them in this country because machine to make them are gone or outdated.

Originally Posted by OutDoorNut

By rights, I suspect inflation would be

For example, today I can buy a shirt for very nearly what I paid in 1990 for an American made shirt.

However, during this same time the cost of things that are not produced overseas, has skyrocketed.


There is no free lunch.

[OutDoorNut]

Could be the price of brass the screws are made of has skyrocketed because, with the rapid industrialization of third world economies, more brass is being consumed worldwide.

[Mark S.]

I'm just old enough to remember the last really bad recession in the early 1980s. People were just as scared. Unemployment was actually higher then. Terrorism was on the rise. The Cold War was at its height. Economists were predicting another Great Depression. Others were predicting the complete breakdown of society, food riots, nuclear armageddon. The survivalist movement became very popular in some circles.

And then things got better.

Perhaps I'm too much of an optimist, but I'm not overly worried about the short term. The economy is still struggling, but there are signs of improvement. It's been a slow, gradual improvement, but I'm not so sure that's such an unhealthy thing. A "boom" tends to be a very fragile thing, leading back to a bust.

As for our long-term future, I think we have a lot of problems to work out, or the next bust could be really, really bad. I think both the Republican and Democratic Parties are corrupt and have sold out the interests of the country and people in favor of the interests of Big Business and other special interest groups. We do need true change in this country. But neither the Republicans or Democrats show any signs of giving us that. Just more of the same.