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Why You No Like Facts? Core Inflation vs. Disposable Income
As I reminded you the other day, Ben Bernanke isn't worried about inflation. That's good to know, but what are some other facts that we can look at to determine where prices and / or purchasing power are headed. Two indicators that are relevant to this topic are core inflation (everyone's favorite to point to, since it excludes those pesky inflationary items food & energy), and income.
I'm no Phd (which according to some economists who lose millions disqualifies me from even discussing economics), but if core inflation is rising, and personal income is dropping, it stands to reason that prices normal folks pay for goods and services are more expensive than yesterday - but maybe they'll change the definition of inflation soon too.
Today Tom Keene discussed these factors with a JP Morgan economist - if you don't focus on him talking out of the side of his mouth, you'll notice he doesn't buy that there's inflation either. He also really wants to say the Federal Reserve can create individual demand, but stops just short...
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What everyone forgets about inflation is that the application of new technologies should result in a gradual decline in prices of everything. The productivity and quality enhancements that come with new developments should yield a continuous disinflation of about 2%.
StuckonZero...agree, big fan of creative destruction in everything. Just wish we had a little more it in Banking.
Soon there will be three classes of citizens: 1) Government employees, 2) WalMart employees and 3) Food stamp/welfare recipients
The reality is we have to work with this shitty situation, not matter what JPM Fuck-all has to say about it...ok...so the mkt is unfair, bias, full-of-shit, bent and seemingly totally disconnected with reality. What can be done today about protecting or growing your money, that is reality. Are we just waiting patiently for the Big Banking Holiday and possible devalue or do we just plod along adding zeros to the price of gas and milk?
Another fact to consider is the size of the products we buy has shrunk. Same price but less content. Sometimes the box is the same size but only half filled. Watch out for those potatoe chip bags. They are all the same size but mostly air with a little product in the bottom. Content weight is on the label, somewhere.
notice Dentene type gum is now nearing the size of Chicklets
The collapse of income will result in a loss of tax revenues, which will aggravate the "rosy scenarios" of the budget going forward. Their spending is rosy, their estimates of tax revenues are rosy, their estimates of growth are rosy... we're just living in happy-land with unicorns and rainbows. Or, are we living in opposite-land, and all these rosy things are really dark, bad, smelly things, and when you combine no growth, with declining tax revenues, and increasing spending, what you really have is the recipe for an economic black hole...
Had the plumber over last week to do some work ....Hr rate $120.00 .....whin I asked about the increase "everythings gone up insurance , gas ,maintance" .....thats 20% in just over 1 year ....nope no inflation here !
Thanks to manufacturing in China plumbers are doing tremendous business. Faucets, fittings, pipe, disposers, and other elements of the plumbing that used to last 20-30 years now last 4 years and go to pieces. We replaced a US made 30 year old kitchen faucet with a brand new Moen made in China. Within a year the seals went, corrosion set in, the sprayer died and all the chrome is peeling off. My company's brand new office building has had to have hundreds of thousands in plumbing repairs because the copper fittings are self-destructing.
I agree, I've replaced a couple of faucets that are only a year old myself. I think going forward folks are going to have to rely on themselves and their creativity in fixing shit then going out and paying what amounts to a days wages, for most folks, to have something simple like a faucet replaced, imo.
And that story is why DIY books are making a comeback. The guy is pricing himself out of business. Yep, his costs are way up and he should be paid for working but guess what, his clients can't pay $120 hr or at least won't unless they absolutely can't make do with their own repairs. Not too many things a plumber works on in a house that can't be done yourself although you won't get them done as fast (or as competently first few times) as a professional. I'm not bagging on plumbers either, they provide a good service and usually work hard for their money but in this day and age without pay raises for the rest of the world I don't see them being utilized for all but the most complex jobs if they are charging $120/hr.
i wish i had a family to worry about, a house to worry about, a shiny car to worry about, a widescreen to tell me i shouldn't worry about everything it's nailed to. profit now stands as meeting theft half way for the small guy.should i endorse this with my labor? i am the joe 6 pack wishing the ring would choke a goldensquid. maybe i could drink the water then. maybe my toil would go to companies with a vested interest in advancing us. is that unreasonable? when did the decoupiling of the human spirit occur? left to gas dreams, the rapacious are ready to strike a match to it, is that efficient?
Man, got a tear in my eye. Well said, though. Love your way with words.
"i wish i had a family to worry about"
Grasshopper, be very careful what you wish for. I found an unusually attractive and hormone-saturated young vixen once, and somehow convinced her that she should throw in her lot with me.
What followed....well, let's say the EASY part was the forty years of hard labor.
There is no inflation this week. Barilla pasta is on sale. 5 1lb boxes for $4 at Stop and Shop. Good shit.
"That food and energy stuff"...you know...the useless shit that doesn't serve our purposes when trying to convince people we are not destroying the nation.
Brushing off the cost off food and energy when trying to convince us that there is no inflation should be considered justifiable cause for public stoning.
These guys should be beaten to death with baseball bats....after being starved for a few days, doused with gasoline and set ablaze.
You left out slicing off their 'nads and stuffing 'em down their throats. I'd suggest right after the starving and before the dousing with an accelerant.
Nah, just dump them on Ceti Alpha 6 and tell them it's Ceti Alpha 5.
THIS IS CETI ALPHA 5!
again: "it's called the CONFIDENCE GAME." That's how the Fed DOES IN FACT create indivdual demand. In other words "COMPETENTCY." As the ability of the Fed to maintain a zero interest rate policy without resorting to "extraordinary measures" (they are not QE'ing--else why would "the doves" complain about it not being so??!!) instills true confidencent that it is the market and NOT the fed that is setting these exceptionally low rates...thus causing the impact of these low rates to be felt through the economy broadly. since there is everywhere and always inflation these low rates "impact the bottom line immmediately." hence the importance of focusing on jobs and incomes: "who's gonna buy your ever inflating asset?" as Europe TRULY deflates and Asia slows down materially the answer is the same: the American consumer must start getting paid in order that he has money to buy things with. In effect "the buyer of last resort" for "Planet economy." Of course the government doesn't hurt either...but this is what the Fed and the Fed's have been trying to do: "stoke demand" so that our hapless buyer of last resort can pay some taxes too! AMAZINGLY IT MIGHT EVEN WORK!
love the irony, the fed starves.
but think of the increases in productivity with every raise deferred. earn those foodstuffs that every day fill you less.
China is once again facing bad labor shortage. The cost of Make in China is in up trend for years to come. It may not cost less to made in Mexico, Indonesia neither. If it were cost less, things already been made in Mexico and Indonesia before. Made in the U.S.A will cost much more of course. So embrace yourself for inflation. It's stagflation we will have for a long time. Never deflation. All things you need are getting more and more expensive. Your paychecks, if you have any wil buy less and less. If that's not inflation I don't know what is.
This guy seems like he is full of shit!
You think so? LMAO
I heard he is opening an interior decorating company and wall vaginas are going to be the lead product since he doesn't like gold.
http://www.psychopathiceconomics.com/DavosEconomicForum/2012/01/29/is-dr-nouriel-roubini-a-gynecologist-a-gold-hater/
"There are other unresolved problems. Housing prices remain high based on traditional measures such as affordability and rental returns.
According to the latest Economist survey (published on 26 November 2011), Australian house prices were overvalued by 53% based on rents and 38% measured against income levels relative to long run averages."
"Overvalued house prices and high household debt increases vulnerability to an economic slowdown, with an accompanying rise in unemployment or to higher mortgage rates"
by Satyajit Das from....
The Daily Reckoning.
You can always affect supply; you can never affect demand. That is existential to the Fed's capabilities, or any central bank for that matter. Government can't help you WANT to buy more things - one must demand it in themselves.
- Don't say this too much as you may be labeled a conspiracy theorist
Take Solyndra, for example. Give them half-a-billion and watch them....go away. Govt creating market demand is like a whore demaning she give it away for free. Boner
Ah, but they can make you want to buy things... if you believe the price will be 10% more tomorrow than it is today, then you will want to buy it. I'm wondering at what point people will think it's a better deal to empty their retirement savings and spend it all rather than spend the next few years watching the Fed inflate it away to nothing?
Exactly. And that's the way to kill the economy even faster (completely discouraging saving).
"if you don't focus on him talking out of the side of his mouth"
God. Popeye reincarnated and joined JP Morgan?
He still eats green stuff but its greenback, not spinach.
It's the way all empires end. Too expensive to maintain, much less grow. Too complex. Not enough producers. Debasement of currency. Lawlessness abounds from the pauper to the prince.
History repeats....the bell curve rules.
Don't worry, scrote. There are plenty of 'tards out there living really kick-ass lives. My first wife was 'tarded. She's a pilot now. Krugman is 'tarded, now he's a Phd. economist.
Professor/(confessor) Krugman would make guillotine fodder of you heretic!!
Do not challenge the church!!
Believe as you have been instructed or become an outcast subject to execution as an enemy of the state.
Zee choice is yours.
Apparently, whatever affected his mouth also affected his brain!
Appears to be a stroke victem.