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Guest Post: Don't Worry – The Government Says That The Inflation You See Is Just Your Imagination

Tyler Durden's picture





 

Submitted by Michael Snyder of The Economic Collapse blog,

If you believe that there is high inflation in the United States, you are just imagining things.  That is the message that the U.S. government and the Federal Reserve would have us to believe.  You might have noticed that the government announced on Wednesday that the cost of living increase for Social Security beneficiaries will only be 1.5 percent next year.  This is one of the smallest cost of living increases that we have ever seen.  The federal government is able to get away with this because the official numbers say that there is hardly any inflation in the U.S. right now. 

Of course anyone that shops for groceries or that pays bills regularly knows what a load of nonsense the official inflation rate is.  The U.S. government has changed the way that inflation is calculated numerous times since 1978, and each time it has been changed the goal has been to make inflation appear to be even lower.  According to John Williams of shadowstats.com, if the inflation rate was still calculated the same way that it was back when Jimmy Carter was president, the official rate of inflation would be somewhere between 8 and 10 percent todayBut if the mainstream news actually reported such a number, everyone would be screaming and yelling about getting inflation under control.  Instead, the super low number that gets put out to the public makes it look like the Federal Reserve has plenty of room to do even more reckless money printing.  It is a giant scam, but most Americans are falling for it.

Meanwhile, the prices of the things that most Americans buy on a regular basis just keep going up.  The following are just a few examples of price inflation that we have seen lately...

-McDonald's has killed the dollar menu because it is becoming impossible to "make any money selling burgers for $1".

But don't worry - the government says that the inflation you see is just your imagination.

-Amazon.com has raised the minimum order size required for free shipping from $25 to $35.

But don't worry - you can afford to order more stuff thanks to the great new job that you got during this "economic recovery".

-It is being projected that those using natural gas to heat their homes will see their heating costs rise by 13 percent this winter.

But don't worry - "global warming" should kick in to high gear any day now.

-The price of chocolate has gone up by 45 percent since 2007, and it is being projected that it will now be increasing at an even faster pace.

But don't worry - eating chocolate is bad for you anyway.

-Thanks to Obamacare, the health insurance premiums of many American families are absolutely skyrocketing.  As I wrote about the other day, one family down in Texas just got a letter informing them that their health insurance premiums are going up by 539 percent.

But don't worry - this is just "health care reform" in action.

Meanwhile, things just continue to get tougher for middle class American families.  Household incomes have actually been declining for five years in a row and total consumer credit has risen by a whopping 22 percent over the past three years.

The quality of our jobs continues to go down and our paychecks are not keeping up with inflation.  In fact, 40 percent of all U.S. workers are now making less than what a full-time minimum wage worker made back in 1968 after you account for inflation.

So what do the "authorities" say that the solution to our problems is?

They want even more inflation of course.  According to CNBC, many Federal Reserve officials (including Janet Yellen) believe that what the U.S. economy really needs is a lot more inflation...

Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.

 

Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.

 

The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama's nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.

The rest of that article goes on and on about how wonderful inflation is for an economy and about how the U.S. economy desperately needs some more of it.

Well, if that was actually true, then the Weimar Republic should have had one of the best economies in the history of mankind.

But this inevitably happens when a nation starts producing fiat currency that is backed by absolutely nothing.  There is always a temptation to just print a little bit more.

In the end, we are going to be destroyed by our own foolishness.  We have the de facto reserve currency of the planet, and the rest of the world has trusted it for decades.  But now we are systematically destroying our currency, and the rest of the globe is looking on in horror.

If you want to see a very good example of the impact that inflation has had on our economy in recent years, just check out this amazing chart which shows what the Federal Reserve's reckless policies have done to the prices of commodities.

Ultimately, the U.S. dollar will be destroyed, and we will have done it to ourselves.

Many people are attempting to protect themselves against this inevitability by putting a lot of their money into hard assets such as gold and silver, but before you do that you might want to make sure that you don't have a vengeful spouse that will toss it all into a dumpster someday.  The following is from a recent New York Post article...

A Colorado man was so angry at his ex-wife for divorcing him that he had the couple’s life savings of $500,000 converted to gold — then tossed it in a dumpster so she couldn’t have any of it, the Colorado Springs Gazette reports.

 

In June, Earl Ray Jones, 52, of Divide, Colorado, was ordered by a judge to pay $3,000 a month to the woman he’d been married to for 25 years, so he pillaged the couple’s retirement account and had it converted into 22 pounds worth of gold and silver bars,  the paper reports.

 

Jones claims he then tossed the modern-day treasure into a dumpster behind a motel, where he had been living temporarily, later telling the judge he had no money to give his ex-wife, according to the paper.

Did that story make you smile?  It sure did the trick for me.

But that story is also a picture of what the Federal Reserve is doing with our dollar.

Our currency has been used for decades by almost everyone else around the planet.  In fact, more U.S. dollars are used outside of our country than inside of it.

But now the Federal Reserve is systematically trashing the dollar and the rest of the globe is starting to lose faith in it.

Instead of realizing their mistakes, Fed officials say that we need to create even more inflation and they just keep on wildly printing more money.

In the end, we will all pay a great price for their foolishness.

 


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Thu, 10/31/2013 - 21:34 | Link to Comment km4
km4's picture
The Temptations - Just My Imagination

http://www.youtube.com/watch?v=S13ZLMNQBjc

There's Barry on the far right in opening ;-)

Thu, 10/31/2013 - 22:40 | Link to Comment nope-1004
nope-1004's picture

Definition of inflation has changed throughout the years only because governments are habitually reckless and self-serving.  The biggest joke going is that some elected idiot sitting in a mansion can "create jerbs".  What a load of shit.

Inflation, through easing lending standards, has been the only way the Fed has created jobs - by making HUGE asset bubbles appear.  Ya... home builders were busy for a time.... but it wasn't a real economy.  Asset bubbles are a byproduct of the inept leaders trying to create jerbs.

And this country is full of overweight, lazy slobs that will just sit there a wait for Obama to "make me a jerb", thereby guaranteeing that this rollcoaster of debt binging keeps going.

 

Fri, 11/01/2013 - 00:57 | Link to Comment TwoShortPlanks
Fri, 11/01/2013 - 02:59 | Link to Comment zhandax
zhandax's picture

TSP,  I have one primary objection to the $134k price projection; it includes "much of the derivative market" in the liabilities which need to be covered by the new gold 'price'.  I would contend that at least most of the derivatives will be defaulted during the event that forces revaluation against gold.  In fact, that may be the event.  Cascading margin calls when everyone is spooked on the dollar is all it will take.

Fri, 11/01/2013 - 05:31 | Link to Comment The Alarmist
The Alarmist's picture

All I know is that the can of Spam that I used to get a few years ago (2006) for $1.85 is now pushing $3 something (It's over $4 in Manhattan).  I'd switch to dog food, but in Omeriku, good dog food is even more expensive than Spam. 

Fri, 11/01/2013 - 06:35 | Link to Comment negative rates
negative rates's picture

You are what you eat, this auther needs to check into a dental school  and then see if he feels the same way. I would he doubt he would do either.

Fri, 11/01/2013 - 02:06 | Link to Comment Nothing but the...
Nothing but the truth.'s picture

I would imagine that they would also have us believe that high unemployment, lack of economic growth and asset bubbles are also just in our imagination - this US adminisrtation becomes more laughable by the day.

Thu, 10/31/2013 - 21:31 | Link to Comment LetThemEatRand
LetThemEatRand's picture

If the price of gas goes up by $3 in the fly over states, does a banker care?

Thu, 10/31/2013 - 21:35 | Link to Comment Groundhog Day
Groundhog Day's picture

2001 : .99 per gallon for regular

2013: 3.20 per gallon for gallon or a +300% rise

yea their is no inflation Bernanke

Thu, 10/31/2013 - 22:10 | Link to Comment Bad Attitude
Bad Attitude's picture

In the not too distant future, we will look back longingly on this October of 2013, when inflation was still more-or-less manageable and predictable. Back when a gallon of gasoline was a little over three dollars. When a loaf of bread was only two or three bucks. When Ramen Noodles were less than a quarter a package. When 9mm ammo was less than thirty-cents a round.

We are so screwed.

Forward (over the cliff)!

Fri, 11/01/2013 - 04:05 | Link to Comment starfcker
starfcker's picture

i don't believe for a second that the rise in prices is inflation. let me define inflation as too much money chasing too few goods. naaaa... that ain't what's happening. this is just basic sheep shearing, by every means possible. eliminate competition, cut the product, short the product, gouge the unwary. there is a tacit agreement between our government and industry. cooperate with globalization and we will turn a blind eye to even the most agregious behavior. don't wanna play? good luck with that. let's see.... become a man without a concience and reap rewards impossible to imagine twenty years ago, or be a dumb fucking patriot and get ground under the stasi boot. hmmm........

Thu, 10/31/2013 - 22:36 | Link to Comment SandiaMan
SandiaMan's picture

2001: .223 7cents

2013: .223 60 cents

(price varies in locations)

Almost +900 rise.

Thu, 10/31/2013 - 22:45 | Link to Comment Uber Vandal
Uber Vandal's picture

Disneyland ticket 2003: $47

Disneyland ticket 2013: $92

https://en.wikipedia.org/wiki/Disneyland#Tickets

 

Superbowl ticket 2003: $400 - $500

Superbowl ticket 2013: $800 - 1200

http://www.krem.com/sports/football/Historical-Super-Bowl-ticket-prices-...

 

 

Thu, 10/31/2013 - 23:00 | Link to Comment 0b1knob
0b1knob's picture

I can remember when it was $2 to get into Disneyland.   Tickets for the rides cost more but were sold in booklets.   In the off season I would sometimes go there to see the free concerts.   I remember seeing Rosemary Cloney and a big band concert.   It was cheaper than a movie.   Its easy to be dismissive of Disneyland as a glorified carnival but at night its really a beautiful and spooky place.   And the main street electrical parade!

Thu, 10/31/2013 - 23:10 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Hmm..great examples. You picked two things that have a limited, stable supply and by design (and marketing) have an ever-growing demand. So obviously a reasonable person would expect the price for such items to increase at a slow-steady pace as indicated by the inflation rate.

OOOOH  - use Bitcoin as your next example of how inflation is higher than the government tells us!

Thu, 10/31/2013 - 21:41 | Link to Comment Croesus
Croesus's picture

Earl Ray Jones told the judge he "threw the gold out in a dumpster"...is that a new euphemism for "lost it in a tragic boating accident"? 

Thu, 10/31/2013 - 21:52 | Link to Comment JohnG
JohnG's picture

Yes.  :)

Thu, 10/31/2013 - 22:05 | Link to Comment NoDebt
NoDebt's picture

Hey, that dumpster is what I call home, pal.  Stop looking down your nose at me and keep throwing your gold in it.  I'm the richest fucking redneck hobo you ever met in your life.

Thu, 10/31/2013 - 22:24 | Link to Comment max2205
max2205's picture

We lost it...it's gone, no chance of getting the US back....give up and obey

Fri, 11/01/2013 - 06:49 | Link to Comment RabbitChow
RabbitChow's picture

It's not just the bankers.  It's the elite, the powers that be, andn the elected minions.  Most don't remember during the campaigns for the 2008 election, nearly all the candidates were asked if they knew what the local price of a gallon of gas was.  NONE of them knew.

Thu, 10/31/2013 - 21:31 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The moral of the story is: the government is worse than your ex wife.

 

Thu, 10/31/2013 - 21:45 | Link to Comment Skateboarder
Skateboarder's picture

The moral goes further: if you see a guy throwing out 22 pounds of Au/Ag into a dumpster, pick that shit up and run, son.

Thu, 10/31/2013 - 22:08 | Link to Comment NoDebt
NoDebt's picture

I did and I did.  I love Colorado Motel 6s.

Fri, 11/01/2013 - 05:17 | Link to Comment Australian Economist
Australian Economist's picture

Don't you mean Motel 6,000,000,000,000?

Thu, 10/31/2013 - 21:31 | Link to Comment SmittyinLA
SmittyinLA's picture

pretty soon they'll be debasing pink slime 

Thu, 10/31/2013 - 21:37 | Link to Comment Platinum
Platinum's picture

They're probably already cutting it like black tar heroin.

Thu, 10/31/2013 - 21:44 | Link to Comment Groundhog Day
Groundhog Day's picture

I made this massive mistake last night.  I came home from work late, really late.  I typically always have a home cooked meal for dinner however I was just not feeling up to cooking and didn't want to wake the wife to have her make something either.  i went out and the only thing i found open was a drive thru Taco Bell.  Five bites in (after the initial hunger subsided) I started to taste the crap.  The beans were substanard, the oil they fried it in probably wasn't changed for a week, the cheese didn't taste like cheese.

whats my point? Their are many ways to count inflation

Fri, 11/01/2013 - 03:18 | Link to Comment zhandax
zhandax's picture

I grew up at taco bell before pepsico bought it.  I just make my own now.  Really simple stuff.  Hard to believe a multination could find a way to fuck that up (well, maybe not).

Thu, 10/31/2013 - 21:34 | Link to Comment Platinum
Platinum's picture

I've become quite the fan of dehydrated food. Buy in bulk - and save!

Hunting is also great. Pay a butcher to process the carcass, and you have meat for months.

Thu, 10/31/2013 - 22:27 | Link to Comment RichardP
RichardP's picture

Yes.  Let's all 300 million of us use hunting as our main source for food.  That'll show them.

Thu, 10/31/2013 - 23:25 | Link to Comment Platinum
Platinum's picture

A great majority of those 300 million will die off fairly rapidly as their bodies go through the shock of too much food (empty nutritionally as it may be), to none. Many others will die in the mayhem of the panic, once they realize that it is everyone for themselves.

Sure there will be a lot more hunters in the coming years, which is why I'm stockpiling dehydrated food. That's what i'll be eating when everyone else is out hunting and game is scarce. In the meantime though, I'm enjoying nature's bounty.

Fri, 11/01/2013 - 03:23 | Link to Comment zhandax
zhandax's picture

Half of those 300mm are afraid of guns.  2/3 of the 150mm left couldn't hit the broad side of a barn.  I like the odds.

Fri, 11/01/2013 - 07:16 | Link to Comment RabbitChow
RabbitChow's picture

Even among the crowd that routinely hunts, it's been my experience that 80% of the ones who around guns all the time can't hit the broad side of a barn.  The joke is they don't ever want to practice or sight in because when they go home empty-handed at the end of the season, they can always blame the gun.

Fri, 11/01/2013 - 07:31 | Link to Comment I need Another Beer
I need Another Beer's picture

U got it Plat, I consume 4-5 deer a year. I pay a local abbatoir less than a buck to grind,package and freeze my kills for me. Like U I am loaded with dehydrated stuff that is left stashed. I nailed an 8 pointer trailing a doe last week as the rut approaches.

Yea I know the country is going to hell and there is absolutely nothing to be done about, but before it goes completely I will hunt and fish as much as I can and burn that gasoline.

On another note, the company I work for is telling us that the future is rosy as can be for us. It is so good that they are increasing compensation across the board.[cellular communication]. I get the feeling that cell phones will be the last thing people will do with out. By that I mean they will starve , go homeless and do without cars before giving up that cell phone.

Thu, 10/31/2013 - 23:30 | Link to Comment WOAR
WOAR's picture

With the combined plagues of wild boar and white-tailed deer in Texas, they can do that.

Seeing as how those wild boar are still spreading despite "shoot to kill" orders by Conservation departments (meaning, all season is open season)...pretty soon anyone could do it.

You'd be surprised how many animals exist as nuisance animals without providing anything in return. Get rid of all these damn dogs and cats, and you could have millions of egg laying chickens! Free food from your pets! Could you imagine such a topsy turvy world?

Fri, 11/01/2013 - 17:46 | Link to Comment Blankenstein
Blankenstein's picture

 

"You'd be surprised how many animals exist as nuisance animals without providing anything in return. "

You mean like man?  Yes, such a good idea to keep breeding exponentially and wipe anything out that doesn't fit with the upright apes's current obsession. 

Fri, 11/01/2013 - 07:46 | Link to Comment epoxe
epoxe's picture

Meh. Less than 1% are aware whats happening. 1% can happily sustain on hunting unless you're one of those morons living in a big city, if so, have fun with that.

Thu, 10/31/2013 - 21:38 | Link to Comment 0b1knob
0b1knob's picture

< This is not the inflation you are looking for....

< These are not the droids you are looking for....

Fri, 11/01/2013 - 07:18 | Link to Comment RabbitChow
RabbitChow's picture

You forgot the Jeddai hand wave. 

Thu, 10/31/2013 - 21:41 | Link to Comment ZeroPoint
ZeroPoint's picture

Once gas goes over 10 dollars a gallon, the remaining economy will go down in flames.

Thu, 10/31/2013 - 21:53 | Link to Comment A Lunatic
A Lunatic's picture

The true cost of gas for the American consumer is not far from that mark once the real expenditures such as foreign occupations, wars, taxes, subsidies, etc are considered, but since the pump says it's only $3.84/gallon we remain blissfully ignorant. If I had T.V. I suspect I could turn it on at nearly any hour and hear how rosy everything is, how we're turning the corner, Bernanke & Co. saved us from certain zombie apocalypse, gas is cheap and there is no inflation. Since I don't have T.V. I have to rely on upon my own senses which are constantly being assaulted by $3 cans of soup $8/gallon milk and $65 Levis......

Thu, 10/31/2013 - 23:18 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Ah yes. After all, you are forced to buy high priced items. I must live in a magical fairy land since the last cans of soup I bought were 88 cents, gallon of milk  2.97, and jeans ~16.00.

Thu, 10/31/2013 - 23:33 | Link to Comment WOAR
WOAR's picture

He buys Shatto milk and Campbells soup, obviously. A man who likes Levi's obviously has refined tastes!

Fri, 11/01/2013 - 00:02 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

I like my refined Levi's too. But I'm not so much of an idiot to pay more than $30 for them. Just because people are too lazy to look up prices and only pay the fair one doesn't mean there is rampant inflation.

Fri, 11/01/2013 - 07:50 | Link to Comment epoxe
epoxe's picture

You're a moron if you cant see the difference in quality of the clothing you buy for $16 now compared to a pair of pants made 15 years ago....I only buy at farm supply wholesalers and buy REAL clothing at a reasonable price. If I buy a pair of jeans at walmart they last about 10 minutes on the farm. I have some 15 year old levi's that are still great though.

Fri, 11/01/2013 - 09:24 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

So, you define inflation by the inability of the average consumer to determine they are buying an inferior product. That's kind of disingenuous since a pair of Levi's at walmart and a pair at the Levi's store cost the same to manufacture - yet vary in price by 200% or more. They intentionally manufacture lower quality products to trick you into buying the higher priced items later.

You are ignoring the fact that a lot of the cost associated with the products you buy goes to marketing(far more prevalent and expensive than 15 years ago). So if a consumer is now paying more into the marketing cost, the actual inflation of products themselves is not as high as it may seem.

Also, if the average consumer demands cheap over quality, then your "high quality" jeans become a niche product. This doesn't necessarily mean inflation has occurred. It more indicates a transition in the market. Perhaps rather than purchasing overpriced, over-marketed Levis, you should explore other low cost brands. Please don't pretend you are an expert in the quality of all low cost products. Remember, brand loyalty causes increased prices - NOT inflation.

Thu, 10/31/2013 - 23:56 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

FYI during the Iraq war, the US military was burning 380K barrels/day of oil.  Comparitively, the country of Greece burns about 390K bpd.

That was the largest single US entity consuming, but if you understand oil you know the US consumes about 18 million bpd. 

IOW, though it may not fit the political memes, it wasn't a big % of total US oil consumption.

Fri, 11/01/2013 - 03:48 | Link to Comment spiral galaxy
spiral galaxy's picture

Also factor in that yesterdays pure 100% gasoline is now 'watered' down with ethanol ...hence lower energy value per gallon & lower gas mileage.  And along those lines, the 'half gallon' OJ containers are now 59 ounces (from 64) and bag of chips from ...???....whatever down to 6 ounces.  .......etc., etc., with other items reduced in size but priced the same, if not priced higher!!

Thu, 10/31/2013 - 21:41 | Link to Comment bubblemania
bubblemania's picture

Bullish

Thu, 10/31/2013 - 21:43 | Link to Comment deerhunter
deerhunter's picture

Butcher it and handle it properly yourself and save 110 dollars.  Gut a deer quickly.  Ice the body cavity with bags of ice in warmer weather.  Skin and cut and refrigerate after boning.  If you watch someone a few times who knows knifework it doesnt take long to learn the primal cuts.  With the internet now,,, learing to handle a deer is pretty practical.  You will need some hands on experience but it is quite safisfying to buther your own game.  I will be in the woods all weekend with my bow.  The bucks are starting to chase the does a wee bit.  Could be a good weekend with some cooler weather.  Night all.

Thu, 10/31/2013 - 21:53 | Link to Comment Running On Bing...
Running On Bingo Fuel's picture

I hate when they get out into the road. It's like I drive a deer magnet or something. High speed swerving, tires stretching, almost rollover, and the fucker still runs into my quarter panel. "Can't play chicken with me bitchez --The Deer".

Over.

Thu, 10/31/2013 - 23:34 | Link to Comment WOAR
WOAR's picture

My friend has the same problem with his Japanese cars. It's like they hook up a deer whistle to the damn things...

Thu, 10/31/2013 - 21:56 | Link to Comment NoDebt
NoDebt's picture

The deer that live in the tank farms not far from my house are already going after eachother like crazy.  They live their entire lives inside a cyclone fence.  No predators, but limited food supply.  They're little itty-bitty things.  If they were ever released into the "wild" (my back yard) I'm not sure they would make it.  Somewhere in there is a lesson, I think.

Fri, 11/01/2013 - 07:53 | Link to Comment epoxe
epoxe's picture

What the hell could people be down arrowing this post for? Hate self sufficiency? Hate nature? Maybe you should go hangout @ thehill.com

Thu, 10/31/2013 - 21:52 | Link to Comment NoDebt
NoDebt's picture

I was sleeping one off in that dumpster that particular evening.  Now I live in a nice house with a nice family and a computer that I use to post on ZH.  I just wanted to let him know I put all that gold to good use.

Thu, 10/31/2013 - 21:53 | Link to Comment pragmatic hobo
pragmatic hobo's picture

3 years ago 16oz bag of doritos retailed for $1.99, $0.99 when on sale. Today bag of 12oz dorito costs $4.99 retail, usually on sale for $2.50. That is 300% increase in price. Fuck you ben bernanke and your fucking economic phd.

Thu, 10/31/2013 - 23:25 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

You don't calculate real inflation using brand-based-idiot-consumer-will-pay-anything-NBA-star-endorses products, you fool. You can still get 16 oz. of shitty, processed corn meal and cheese-like proteins for 1.99. It just might not be the same shit brand you are used to. Hell, you can get an effective meal (still processed shit) from a store for < 2.00. And that includes the time-value of a pre-prepared food item. Stop crying.

Fri, 11/01/2013 - 02:21 | Link to Comment FreeMktFisherMN
FreeMktFisherMN's picture

inflation is the increase in the supply of money and credit. It obviously leads to prices being above what they would have been, but another symptom is the malinvestment it creates, as rate are distorted and an illusion of liberated capital for investment is given that is not reflective of reality. Printing money is not the same thing as actually foregoing consumption and saving real resources that can be used for investment and ultimately greater production.

 

Regarding the price symptom, they are going up way more in general than .govt would have us believe. Inflation's effects are heterogeneous for certain. Certain sectors see higher prices than others, depending on preferences. Housing and health care obviously are among the tops with the bubbles, and pretty much anything with debt which is what the economy generally is predicated on. 

 

In measuring prices, it has to be the same quality item. If the price is the same but now it is the lesser quality generic brand, that is not the way to compare. 

Fri, 11/01/2013 - 09:56 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Interesting. The 'quality' of cars has increased greatly over the last 30 years. I have a Lincolnt Town Car that cost $36,000 in 1993. My 2011 Mazda has better quality materials, more features, better technology and cost 18,000. So does that mean there has been deflation in the car market? I don't think you will answer yes, so let me just say, inflation is NOT based on the same quality item. Inflation is based on available items that serve the consumers' lives in the same way.

Yes, I agree some facets of life are becoming more expensive. Yet, anyone with the same standard of living of someone 30 years ago has not seen a great increase in prices (beyond the targeted 2% annually). The problem is more that people have come to expect a growing quality of life for the same price (+ 2% inflation). This cannot be realistically attained at all times. So the affect of slowing quality of life increases feel like inflation when in actuality it is not.

Fri, 11/01/2013 - 01:05 | Link to Comment yogibear
yogibear's picture

The shrunk the package size of all sorts of items. A pound of bacon is now 12 oz.

It's criminal what the Fed is doing. 

Thu, 10/31/2013 - 22:12 | Link to Comment DOGGONE
DOGGONE's picture

ZH, TD,
I think that BLS' CPI-U is sound. See here:
http://www.bls.gov/opub/mlr/2008/08/art1full.pdf
and note the 1958-1998 flat behavior of Real Homes
http://showrealhist.com/RealHomes.gif
with two small bubbles along the way. CPI-U rose a factor 5.6 over 1958-1998.

Thu, 10/31/2013 - 22:14 | Link to Comment DOGGONE
DOGGONE's picture

ZH, TD,
I think that BLS' CPI-U is sound. See here:
http://www.bls.gov/opub/mlr/2008/08/art1full.pdf
and note the 1958-1998 flat behavior of Real Homes
http://showrealhist.com/RealHomes.gif
with two small bubbles along the way. CPI-U rose a factor 5.6 over 1958-1998.

Fri, 11/01/2013 - 00:04 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Here's the condensed version of that.

Unlike the rest of the world, rent is the dominant US household expenditure.  It is overwhelmingly dominant. 

Declining personal income has prevented rent increases of significant amounts.  This inability of the dominant expenditure to rise has swamped out food and gasoline, which have risen, and results in somewhat low numbers for the overall report.

And that's pretty much that.  Bernanke knows it.  That's why too low inflation is scary to him.  It means personal income is in freefall.

Thu, 10/31/2013 - 22:15 | Link to Comment Reaper
Reaper's picture

"Everything the government says is a lie." ~ Nietzsche. Every government statistic is a lie. Beef is up 20+% in one year; shrimp is up 15% in one year; wine is up 13% in one year; cold cuts are up 20% in one year. "Everyone who trusts the government's lies is a fool." ~ Reaper

Thu, 10/31/2013 - 22:24 | Link to Comment deerhunter
deerhunter's picture

pricing cold cuts by half a lb.  I guess if you are an EBT king or queen you can't and don't need to figure that out.  I love old fashioned loaf.  Full of nitrates and msg.  But oh,, with some mustard lettuce and cheddar on dark rye.  God bless Eckrich.  Love lunch meat and have seen it made.  LOL,,, great weekend to all.

Thu, 10/31/2013 - 22:30 | Link to Comment max2205
max2205's picture

Inflation only impacts those who pay for stuff....FSA forward march

Thu, 10/31/2013 - 22:37 | Link to Comment raki_d
raki_d's picture

Yes- Inflation is here for Middle class & below & there will be more. It is intentional to fight the Deflation monster and counter negate it. Read it here on ZH - Ray Dalio called it Beautiful deleveraging caused by Fed money printing. Rich gets ultra Richer. No other option left but to print print print. Savers lose.

Thu, 10/31/2013 - 22:34 | Link to Comment GeorgeHayduke
GeorgeHayduke's picture

Inflation is the fault of Eurasia. We've been at war with them forever and they are an insidious lot. Tomorrow it will be Eastasia's fault. Ask no questions citizen.

Thu, 10/31/2013 - 22:37 | Link to Comment Notarocketscientist
Notarocketscientist's picture

So 25 years of marriage - some asshole converts the wealth he and his wife have acccumulated into gold (and buries it somewhere then tells the judget he chucked it in the bin) - leaving his wife possibly wihtout a pot to piss in - makes you smile?

Fri, 11/01/2013 - 09:49 | Link to Comment loneranger
loneranger's picture

That will most likely not fly in divorce court.  I would suspect that the judge would determine that he owes half that to his wife and that he will be working out a payment plan with his spouses legal representation.  Just my guess.  I am not a lawyer.

Thu, 10/31/2013 - 22:45 | Link to Comment JR
JR's picture

The Fed has worked for decades to suppress inflation… -- CNBC

The nominal* median income of 122,459,000 U.S. households, according to the U.S. Census Bureau, was $50,099 in 2012. In the year 2000 it was $41,262; in 1990 it was $28,506; in 1980 it was $16,542; in 1970 it was $7,651.

In short, who cares what CNBC says; it’s meaningless.

http://www.davemanuel.com/median-household-income.php

*Income that has not been adjusted for inflation and decreasing purchasing power.

ITEM:

May 15, 2012 (Washington, DC) – Seniors have lost more than one-third of their buying power since 2000, according to the Annual Survey of Senior Costs, released today by The Senior Citizens League (TSCL). TSCL is one of the nation’s largest nonpartisan seniors advocacy groups.

In most years, seniors receive a small increase in their Social Security checks, intended to help them keep up with rising costs. But since 2000, the Social Security Cost of Living Adjustment (COLA) has increased benefits just 36 percent while typical senior expenses have jumped 82 percent, more than twice as fast.

(The Social Security cost of living inflation adjustment was 1.7% for 2013 and will be 1.5% for 2014.)

Thu, 10/31/2013 - 22:46 | Link to Comment Osmium
Osmium's picture

If I was going to imagine something, it would be naked women, not inflation.

Thu, 10/31/2013 - 22:52 | Link to Comment Wonder why
Wonder why's picture

I use to like reading ZH, this is one of the poorest article I have read on ZH, I feel bearish people are out of argument. While I do not agree on QE (this is not the point), you guys should know that printed money is not reaching the public, inflation occurs in FUCKING EXPENSION CYCLE WHICH WE ARE NOT EVEN CLOSE, money is only deposited back to the FED which create absolutely no inflation. We could argue that little inflation is created when debt owned by the FED mature, at this point... money have been printed to pay debt... I agree with myself. The super hyperinflation scenario that everyone is talking about will only happen in a crazy expansion cycle where printed money finally catch up and no exit trade has been planned by the FED (none has been planned ... ). Never heard about a country named Japan...? OMG!... and how can I not comment on the Jimmy Carter comments?? Who wrote that?? Tyler Durden please identified yourself, is there any offer I could lift to reveal your identity? Jimmy Carter was president in the early 70’s, at that time MS-DOS was not invented...economist were making linear regression by hand... you had to be home to phone someone... flying somewhere was like 600$ (in 1979 dollar term if anyone here is able to bring it back to 2013 dollar)...you could die from a cold ... Rocky 1 was not even out, this has nothing to do I know but whatsoever... never heard of technological improvement... ??? I remember people laughing at the state deputy that wanted to increase minimum wage by 50%... this is no better ... My points are, inflation calculation have to change, let’s debate on how they changed not on should they be changing... and please don’t speak like it’s a conspiracy ... FED has NO IDEA when/if inflation is going to hit... they are economist, they expect stuff 2 years from now with 50.1% change of happening (nice job). Point is , stop speaking like it’s a government fact that inflation is 15%, I personally see no inflation... actually deflation is more probable in my point of view (let’s debate on that if you want). ZH has been brainwashing with less and less and poor article are becoming increasingly popular... bring back some good analysis please...oh fuck forget it ... reding the comments ... I’m out of ZH...  Sorry bro, and ... ho just finishing my 50 cent hot dog... the same I used to consume in 1999 ... let’s pray they don’t hit 51 cent. Thanks, WonderWhy.

Thu, 10/31/2013 - 23:11 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Glad you're leaving then. You havent learned a fucking thing here by the sounds of it.

Edit: Here a whopping 49 weeks to boot.

Thu, 10/31/2013 - 23:58 | Link to Comment QQQBall
QQQBall's picture

In 1999, that mutt might have had some meat in it?  What could have anything of value in it for 50 cents?

Thu, 10/31/2013 - 23:22 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

So you're arguing that the lack of lending has slowed money velocity and therefore no inflation?  Nice effort, but wrong.

The Fed provides liquidity to the banks, taking toxic assets off their books.  So underwritten assets are not allowed to migrate back to their true market values.  That's inflation.  Next, the banks - with no one "credit worthy" to lend to - continue to inflate "risk asset" bubbles, including things like corn, wheat, oil, etc.  This may come as a surprise to you, but those things are actually inputs to the production of things consumed, such as food and clothing.  That's why the 1/2 gallon of ice cream still costs $3.49 but only has 2 cups of actual ice cream in it, and why a pound of coffee is now 10 oz.  That's inflation.  I could go on, but my sense is that you need to be fed in small bites.

Try a little logic in your rants, WW.

Thu, 10/31/2013 - 23:30 | Link to Comment Bay of Pigs
Bay of Pigs's picture

+1

You could give him dozens of examples, but I doubt you would reach him mayhem.

Thu, 10/31/2013 - 23:50 | Link to Comment Cashcollateral
Cashcollateral's picture

No-one throws liquidity into commodity trading. Commodity risk-trading is a two way street, you can't inflate a commodity (which by definition must be consumed) over the long term with speculation. No real traders do that. You bid it up, then you sell it down. Speculation hits capital assets (like the stockmarket, or EM junk debt).

What "inflation" is being seen in the US economy is due to price of imports increasing because the dollar is going to shit. Quantity decrease like you mentioned is structural and due to increasing costs of production (especially oil, seeing as the "energy boom" in the US is due to reserves that cost nearly 70c on the dollar to get out of the ground). This is not inflation in the classical sense of prices bid up through too many buyers with too many dollars. There are no buyers and they have no dollars. The Fed can print until the money supply goes asymptotic and it would have marginal effect on inflation because the money never reaches the general populace.

Fri, 11/01/2013 - 00:25 | Link to Comment MagicMoney
MagicMoney's picture

Lol I had to laugh at this post.

 

"What "inflation" is being seen in the US economy is due to price of imports increasing because the dollar is going to shit."

 

This is a result from inflation ie debasing the currency. It's true wages for the middle class are not rising, but there is significant inflation in assets. Housing market is being lifted in high end markets like Mayfair, Hamptons, etc. Inflation does not simply come from wage inflation, that's a Keynesian faulty assumption. The whole point of QE is to create asset inflation to create the wealth effect. People to lift prices on speculation. Housing bubble was inflation. Housing bubble is inflation. There is no question when the Fed first started the first QE program, prices rose very high substantially initially. Commodities were inflated. Simple thing as a weaved basket rose dramatically. Don't tell me this wasn't inflation. This was at a dollar store too. Ha. This was at the start of the recession, where prices were suppose to fall due to "deflation".

 

Aggregating inflation does not capture asset bubbles, which are a product of inflation being created, and inflation is not necessarily shows the symptom of rising prices either, another faulty assumption by mainstream economist. It can manifest in malinvestment. Great Depression was a credit bubble that popped, but barely any visible price inflation was visible, stock prices rose to bubble levels before crashing, heralding the Great Depression.

 

As far as the exchange rate, US dollar is simply propped up by other foreign currencies that trash their currency to make the USD look good. And falling exchange rate due to QE which is a euphemism for money printing is inflation. It's debasing the currency. Inflation only occuring from "pull demand" is fiction. Inflation can manifest anywhere.

Fri, 11/01/2013 - 00:44 | Link to Comment Cashcollateral
Cashcollateral's picture

Yep that's fair enough. Asset inflation is a thing and that definitely is happening, but assets are not consumables. "Inflation" in terms of both the CPI and this article are refering to consumables. Unless people are reverse mortgaging their asset-inflated house prices to go out and buy baked beans at the supermarket, this isn't the same thing we're talking about.

Debasing the currency results in inflation but only in the countries who are recieving a surplus of USD (see China). You do not get domestic inflation from depreciating currency, except in imported goods.

Fri, 11/01/2013 - 01:12 | Link to Comment MagicMoney
MagicMoney's picture

Ahh, I don't know where you been, but food is a consumable. Food and energy are consumables. Inflation only shows up on things you actually buy, not things you don't buy. If steak becomes too expensive, then people buy a cheaper substitute. You are not getting the point that you can't aggregate inflation. Food and energy are well known to be inflated during the recession, where "deflation" is expected. You can cherry pick cherry prices, but not many people buy cherries, and yes food prices have increased on a whole. There is no question about it. Food, and energy are scarce resources and are sensitive to inflation. Energy in particular. When people find meat to be too expensive, and find the only thing affordable, and worth value for necessity of food, they buy chicken, which is always cheaper than meat, but since beef is too expensive, they choose to buy chicken over beef, because of cost.

Fri, 11/01/2013 - 01:18 | Link to Comment Cashcollateral
Cashcollateral's picture

Good points, but you keep missing the last part of the equation:

1) People buy steak. 
2) The CPI is based on steak
3) The price of steak increases
4) The CPI increases.
5) People cannot afford steak
6) People buy dog food.
7) CPI shows no change because it doesn't register dog food
8) Because no-one is buying steak, the price of steak decreases until people buy it again

If the price of steak cannot decrease to a point where people can buy it (eg because costs are too high), it is structural and by definition not inflation.

The problem with defining structural cost increases as inflation is it suggest that the problem can be fixed by decreasing the money supply. This is too facile and wastes time looking at the wrong issues. We need to find real answers to address the structural issues (eg getting people jobs, decreasing cost of inputs).

Fri, 11/01/2013 - 02:04 | Link to Comment MagicMoney
MagicMoney's picture

How can a price of steak rise in a recession when more people are jobless? Food stamps? Chuckles.... Answer either there is less supply of steak, or stake prices are rising because of inflation. Asset prices such as commodity price increases can have the effect of rising consumer prices. Food, and energy is something people buy. Health care, education are other things people buy. Those are rising in costs. When people prefer to buy physical assets as a hedge against inflation, that is inflation. You don't need low unemployment, and high wages, but you are dismissing that as inflation. Asset inflation is inflation. A housing bubble with bided up prices based on cheap money is inflation.

 

In China, pork is a staple food in the Chinese diet. When pork prices rise, coincidently with inflationary policy, that's inflation. That's not anecdotal. Prices are rising. It's not hyper inflation, but they are rising, which coincides with rising real estate. QE is there to create asset inflation. Suppress interest rates, buying bonds, and MBS, that is inflation.

 

The point you are making is there is no wage inflation, but there is asset inflation. Commodity inflation can create high consumer prices. Inflation doesn't spill over from, and always from wages. Food and energy are consumable. Whether it is consumable, or not is not really relevant. In Japan there is rising costs, and falling wages. Japan has a policy of money printing, which is clearly not working. Despite these efforts wages are falling, and energy is inflating.  I don't know how else to explain it to you. And yes debasing the Japanese yen increases import prices.

Fri, 11/01/2013 - 06:05 | Link to Comment geoffb
geoffb's picture

I get what you are saying Cash. The structural issue is levered debt.  Everything is priced almost entirely by promises instead of savings. One group of people has near costless promising power in this regime and they are driving the price of assets up in search of yield and vanity. Without ever increasing levels of debt, the promises cannot physically be kept. Call it debt inflation if you like, most around here prefer the term Ponzi.

Sat, 11/02/2013 - 11:26 | Link to Comment Vooter
Vooter's picture

"If the price of steak cannot decrease to a point where people can buy it (eg because costs are too high), it is structural and by definition not inflation."

And that's all you need to know about this pedantic asshole: He just wants his book definition of "inflation" to be correct. He's not interested in the fact that people are actually struggling mightily to stretch stagnant or declining paychecks. As he wrote earlier (or at least I think it was him): "Shit is expensive." Translation? Shit is expensive, and if you can't afford it, tough shit--you're a loser and I hope you suffer.

Fri, 11/01/2013 - 00:33 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

@ Cash collateral...this may be news to you, but not every entity holding a position in a commodities future is a TRADER.  Let me know if you want a lesson in securities markets, risk, and valuation.

Fri, 11/01/2013 - 00:47 | Link to Comment Cashcollateral
Cashcollateral's picture

hahahahahaha so you hold your futures to expiry then do you? What do you do with the 100,000 tonnes of corn you just bought?

Futures are settled on expiry with physical delivery or cash settlement. They cannot be "held".

Fri, 11/01/2013 - 01:00 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Nice try on re-direction, amateur.  Let me know when you want to discuss real issues, not securities 101 definitions. 

Fri, 11/01/2013 - 01:30 | Link to Comment Cashcollateral
Cashcollateral's picture

I thought I was, until you very graciously offered to teach me about securities markets.

Here's your opportunity. 

I believe the prices of goods in the US are increasing due to fundamental structural issues, such as rising costs of inputs and logistics, which consumers do not have the capacity to match because their real incomes are decreasing. As such, I believe rates of consumption are decreasing which is causing the present economic shitbox we see in the American economy.

I believe that inflation, by definition, refers to the increase in price of goods and services due to there being enough spare money in the hands of consumers for them all to simultaneously bid on all consumable products, all at once, forcing them all to rise. However, rate of consumption does not decrease, because people still have enough income to keep purchasing (even though the absolute "dollar value" of the goods has increased). I do not believe this is the case in the US.

I believe that it is dangerous and counterproductive to mistake the definitions of the two scenarios, because it wastes time and effort focusing on problems that do not exist, and the treatments that would fix one are disatrous for the other and make the situation worse.

What do you believe?

 

Fri, 11/01/2013 - 13:55 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

I like that rather than providing an argument to the factual statement that made you look like an idiot, you attempted to demean the person making the statement. #ArgueLikeAChild

Thu, 10/31/2013 - 23:54 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

So - your rhetoric is great and all - using things like ice cream and cofee are fantastic logical examples that people can relate to. Yet they fail to provide a complete picture. Easy arguement on coffee: you'd be a dolt to not realize that the demand for coffee, especially branded "high-end" coffee, has risen dramitically in the last 10 years. If you understood the process of growing, harvesting, shipping, roasting, and distributing coffee, you would realize that the supply chain has had no chance of keeping up with increases in demand. Certain near-monopoly star-chains are also good at controlling supply, thus increasing their own profit margins and the end-user price.

All of those previous words are pointless. The only way you can actually judge inflation is by actual commodity prices. http://futures.tradingcharts.com/ shows pretty damn close to 2% avg. inflation from the few items i looked at. The average person can judge true inflation from the price of basic goods - those not associated with brand-names. The stuff made by you-don't-give-a-fuck Inc. are the only things you should be looking at for inflations. Everything else (fucking Gatorade? who buys that $1 for a bottle of bitter kool-aid shit?) is manipulated by marketing/stupidity of people.

If you want a good example of high inflation, choose apples or rib eye. If you want a good example of reality, choose pasta, lettuce, jalapeno peppers, rice, beans (raw, not pre-cooked you lazy, brand-loyal fuck), lumber, nails, paper plates, or light bulbs(new technology excluded obviously).

A pound of coffee is 10 oz? Are you having trouble with the reading? Just because your favorite brand of coffee tries to rip you off doesn't mean every product is inflating in cost/ounce. Pick a different brand. Shop sales. Use coupons. Get discounts. Get smarter. It's a changing world, not an ending world. You live in a world where the MSRP is not the real price. It's the price fools pay. Get used to it.

Fri, 11/01/2013 - 00:04 | Link to Comment Bay of Pigs
Bay of Pigs's picture

You provide some good examples. How about health care, car insurance, cable, tuition, taxes, tolls, ferries, etc...? That's just off the top of my head too.

Anyone suggesting there isn't any currency debasement and resulting inflation going on is a wing nut or a complete fucking retard.

Fri, 11/01/2013 - 00:19 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

But things like healthcare, car insurance, cable, tuition, tolls, and ferries are based off of people's growing dependency and complacency, not real-world average prices on needed goods. If you put yourself in the same standard of living that your parents had 30 years ago, do you really think your monthly expenditures would be so high? Or maybe you have grown accustomed to having more and more. Every time you get a raise, you should be able to buy more stuff every month right?

The human in us measures inflation by a different standard than reality does. Don't go to the doctor every month(people sure didn't 30 years ago), don't have full coverage on a $40,000 car (people sure as shit didn't 30 years ago), don't buy cable(most people didn't 30 years ago), go to a cheaper school(we actually have more options now), don't live somewhere that forces you to rely on toll roads and ferries. The majority of people that complain about inflation are really suffering from urbanization. Move somewhere less expensive and your standard of living goes up. Does that mean there is deflation?

 

Fri, 11/01/2013 - 00:37 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Some of us were around 30 years ago and don't need to ask their parents in order to have an actual perspective.  You might visit John Williams' Shadowstats for an empirical view of inflation.  Because you are just spewing unsubstantiated pabulum.

Fri, 11/01/2013 - 13:05 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

You can use numbers to tell any story you want. So tell me, what is this "actual perspective" you have received with the assistance of age and a for-profit website that benefits from politics and argument?

Fri, 11/01/2013 - 00:26 | Link to Comment Cashcollateral
Cashcollateral's picture

I think we need to draw a definition between "inflation" and "structural cost-of-living increase".

Inflation occurs because everybody everywhere simultaneously has money, and they are all out buying the same wide set of goods and services, causing all prices to react by going up to reach equilibrium. This is why it is frustrating to see an article say the household incomes are decreasing and that prices are inflating in the same breath. If there is no income, there is no spending, if there is no spending, it is not inflation.

Structural increases in the cost of living occur because the price or dynamics of the upstream supply chain have altered the price of the final good. 

There has been currency debasement. Because the US runs a huge trade deficit, the currency debasement manifests in higher prices for some goods. Noone is arguing with this. However, this is nothing to do with American consumers having more disposable income. 

Your examples:

1) Healthcare: Structural. Unless everyone's all been going out and getting sick simultaneously?
2) Car insurance:  Structural, unless the huge amounts of spare income everyone has in this economic boom period is all being spent on new cars?
3) Cable: Structural
4) Tuition: that one more people have been buying, but this is more an expanding proportion of their existing income, not because the income itself has increased.
5) Taxes: why is this even here? This isn't a good. This is a result of a broke-ass government trying to dig its way out of a hole.
6) Tolls:  as above.
7) Ferries: Structural. Price of oil, maintenance. You could argue its the debased USD increasing the price of oil as a lead-in, but this is still not domestic inflation.

The point being: shit is expensive. In some cases, it's getting more expensive. But the word "inflation" implies that people actually are receiving more money and are actually spending it. They are not. Do not mistake one for the other.

Fri, 11/01/2013 - 00:27 | Link to Comment ObamaCaresHugSquad
ObamaCaresHugSquad's picture

Well I guess on the bright side, the party was fun while it lasted.. at least we were getting good ice cream for a while.  They could have been stiffing us the whole time..

Thu, 10/31/2013 - 23:39 | Link to Comment Cashcollateral
Cashcollateral's picture

This is pretty clearly some second-language-english stuff which detracts a little from the reading but I agree entirely with the content.

Stop posting this goddamn awful Snyder bollocks. People like him are the reason why noone takes economic criticism seriously. This isn't encouraging critical thinking, this is encouraging vacant speculation and poor logic. The examples stated are structural, they aren't even caused by inflation.

Inflation doesn't present because there is no money velocity. There is no money velocity because the wider population have no disposable income. The fed may be increasing the money supply but the majority sticks at the bank level, and whatevers left just ends up overseas where it's used to make iPads because that's where generates the best return on capital. That money never makes it to the consumer, they can never circulate the cash, there is no inflation. Only shareholders with bigger dividends and inflated capital prices, a depreciating USD on global terms, and wealthy Chinese.

There are more than enough problems with the economy that we can be focusing on, there's no need to chase made up problems with no understanding and look stupid in the process.

ZH really has been descending into conspiracy theory and poorly-informed soapbox bullshit. How about we post some real analysis for a change?

Thu, 10/31/2013 - 23:57 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

You started and ended so well.

Sat, 11/02/2013 - 11:08 | Link to Comment Vooter
Vooter's picture

So our receipts are wrong?

Sat, 11/02/2013 - 11:05 | Link to Comment Vooter
Vooter's picture

"you guys should know that printed money is not reaching the public, inflation occurs in FUCKING EXPENSION CYCLE WHICH WE ARE NOT EVEN CLOSE, money is only deposited back to the FED which create absolutely no inflation"

Then why do it?

Thu, 10/31/2013 - 23:08 | Link to Comment boeing747
boeing747's picture

Do you know now I have to eat two BIGMACs to feel full?

10 lbs Oatmeal 5 years ago is $5.39 now $8.39?

Leather belts: 2 inches shorter from tip to 1st hole.

Thu, 10/31/2013 - 23:37 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Sure that's your "belt" your looking at, Mr. "747"?

Thu, 10/31/2013 - 23:43 | Link to Comment Teddy Tenpole
Teddy Tenpole's picture

  

I also wonder if the fact that more US dollars than ever have been required worldwide to carry trade?  And wonder when they will come home?

 

 

it's called "dickdo" I believe

Thu, 10/31/2013 - 23:43 | Link to Comment mrpxsytin
mrpxsytin's picture

The Romans ended up doing more for the countries they conquered than for the common people living at home. While, Britain got roads, plumbing, central heating, literacy, trade, etc. the Roman commoners got inflation, and bread and circuses. 

The empire of the USA is doing the same thing. The monetary policies of your Federal Reserve are inflating commodity prices, which are benefitting the commodity exporting nations. QE is creating employment, it's just not creating employment in the USA. But in a commodity exporting nation like Australia the people are getting a very tangible benefit of QE.

In an S&M relationship the dom has to be very careful not to let the sub dom from the bottom. I think the USA is being dommed from the bottom. The USA thinks it's dominating the sub countries but in reality the sub countries are getting the better side of the deal.

Everything the USA is doing is being determined by the submissive countries. The USA is just reacting to the subs misbehaviour. If you realise that a sub intentionally misbehaves in order to get discplined, then you realise that the sub is actually in control of the dom. If the dom truly wants to be in charge then they actually have to starve the sub of attention. But most doms aren't strong enough to do that. Most doms are actually weaker than their subs which results in the sub dominating the dom by getting the dom to continue domming them. 

The USA has become the dommed dom, esentially being forced to keep whipping the subs. And the subs are absolutely loving it right now. Australia, one of the weakest countries on earth is lapping up the sweet cream that the Fed keeps shooting on her face. Things have never been so good!

Mr. Bernanke I've been such a naughty girl... I think I need some more of that monetary punishment.... 

Fri, 11/01/2013 - 08:27 | Link to Comment 22winmag
22winmag's picture

Truer words were never spoken.

Fri, 11/01/2013 - 08:45 | Link to Comment falak pema
falak pema's picture

Rome started to fall when the doms imported sub slaves to keep their women happy, when on parade, or at the coliseum races.

Never leave Jezebel with a hungry slave. Next you know he is in charge of the praetorian guard and humping not only your wife but your mistress as well; while you orgy in Pompei with the wife of your best Senatorial friend.

What goes around come around to bite your wayward ways like a piece of lead in your belly. Those leaden roman pipes...and all that pump and orgiastic dump. 

Bottom line : the Italians never wanted an Emperor on their soil for nigh 1500 years after the last Roman Caesar got impaled on a Wisigoth long pike.

Then they got Musso and now Berlu. Well, all good things come to an end. 

So whose next up in the US...? An elected impotus or an imposed Caesar?

Thu, 10/31/2013 - 23:49 | Link to Comment q99x2
q99x2's picture

two weeks ago I went and bought a box of Keebler crackers for the old lady that lives here. When I brought it back she took out the remainder of her previous box and compared them. She said look at this the new one is just as much money but 20% smaller. I told her that that is one of the weapons the globalists in Washington D.C. using to take over the United States of America. I said the other thing is that they are making them out of GMO to slow kill you. She didn't ever believe anything I said about the Washington D.C. globalists that have declared war against the United States of America until her 75 year old sister in Pittsburgh began telling her the same thing.

So in a years time all the old people across the United States have become aware of the traitors that have taken over Washington D.C.

Not long now. 

Thu, 10/31/2013 - 23:57 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Great anecdote. It's definately an accurate depiction of everyone else's blind, exaggerated experience.

Fri, 11/01/2013 - 07:21 | Link to Comment falak pema
falak pema's picture

yes, but the depressing part is the ambiguity of his punch line : not long now before she departs or before she mans the remparts?

Fri, 11/01/2013 - 07:31 | Link to Comment Ghordius
Ghordius's picture

lol. btw, "...new one is just as much money but 20% smaller. I told her that that is one of the weapons the globalists in Washington D.C. using to take over the United States of America..."

so the evil globalists in DC dictate sizes and prices to the poor, poor megacorporations that package and market food? Poor old lady

Fri, 11/01/2013 - 00:42 | Link to Comment MagicMoney
MagicMoney's picture

There is definitely is inflation. The government, and Fed has the incentive, and do surpress inflation numbers. They lie. My mom who is not economic savy by any means is even startled how prices have increased. She knows that prices are increasing. She is a value conscious shopper, and knows prices. She says things have gotten so expensive.

 

I rather believe value concious shoppers than the government.

Fri, 11/01/2013 - 00:06 | Link to Comment QQQBall
QQQBall's picture

People are paying down debt and not borrowing. The things that are financiable have "inflated" prices - student loans and FHA housing?  Had the market been allowed to clear, bad debts would have been wiped out or reduced, asset prcies would have dropped and effective demand would have increased. The FEd is recapitalizing the banking system; it is not pushing liquidity into the economy. The Fed govt has like $2.5T in gross revenues and over $200T in liabilities; and it spends $3.5T per annum, so the deficit is near $1T. Not a storyline for a happy ending. 

Fri, 11/01/2013 - 02:34 | Link to Comment GreatUncle
GreatUncle's picture

A better way to look at inflation if you are not fortunate to have an excess is how fast those who manipulate the economy are devaluing you to nothing (or worse if you are prepared to borrow to support your existence).

The sovereign debts, globally now around the world is requiring a higher level of inflation to keep the defaltionary Leynes mechanism going and ALL THAT DEBT!

Can't see how they can keep going unless inflation hits the 15-20% rate myself and with it serious unrest.

Fri, 11/01/2013 - 02:39 | Link to Comment GreatUncle
GreatUncle's picture

Reading the comments, it is rather interesting people complainig about a 50% increase over 5 years that will be a doubling every 10 years.

That rate or similar has been there all along so what's new?

WITH NO PAY RISE TO MATCH OR EVEN GETTING LESS EXPOSES THE COSTS YOU PAY BECAUSE YOU ARE FINDING IT HARDER TO PURCHASE THINGS.

All hunky dory, what seemed like you had enough nobody cared about inflation.

 

Fri, 11/01/2013 - 04:50 | Link to Comment orangegeek
orangegeek's picture

"...

The Government Says That The Inflation You See Is Just Your Imagination ..."

 

but pending deflation is as real as it gets.

Fri, 11/01/2013 - 05:26 | Link to Comment shinobi-7
shinobi-7's picture

There is indeed almost no inflation right now. That much is true. But you have to look at the global picture to understand it.

Wage inflation? Gone. Globalization guaranties that most salaries today will see very little rise. For many jobs, someone in China can do the same cheaper putting a lid on wage increases. Many jobs are relatively protected (civil servants) or insulated (Hairdressers) but since overall the purchasing power of people doesn't grow. Increasing your wage is a real relative increase and is therefore very difficult for most jobs.

Assets inflation? We are certainly having some but mostly as "bubbles". It is an unavoidable collateral of the Central Banks policies as some, very little, money trickle to the real economy. As it goes mostly to the wealthy, their "stuff" tends to see more of these bubbles.

Ressources inflation? (Mostly food and energy) We see a lot of it globaly and this is entirely due to demand outstripping offer. But this is true only for the world economy. Locally, the picture is quite different since we are entering an era of relative devaluations. The Euro has held steady and consequently Europe as a whole has almost no inflation. (That is true in Germany, much less in a country like Italy where there is a culture of "rising prices" slowly pricing the country out of the word markets.) The US has devalued the dollar and consequently is seeing some imported inflation. Much less than it should since the dollar remains the world currency but some nevertheless. More interestingly, Japan which used to have deflation is now seeing some inflation as the Yen lost 25% of it's relative value. We'll see more soon together with a crash of demand. (April next year when the VAT goes up to 8%?)

Even more interesting is the case of China which has a lot of inflation. But it also has a lot of growth, as well as a high relative use for oil (thanks to high marginal added value) which allows the country to manage a higher level of inflation. This will be the case as long as there is growth.A lot of inflation also ends up being exported to developping countries who end up "developping" mostly on paper and very, very slowly in reality. 

In the current context, the chance that we will see a crash of demand "Europe style" in other developped countries is much higher that a pick up of inflation. Japan will be first sometimes next year. The US will follow soon after, that is if the dollar hold stready. Would there be a clash between China and the US with a fall from grace for the dollar, then all bets are off.

So to resume, more deflation on the horizon as long as the globalization process continues. We currently have a much higher chance of a recession in the US, Europe and Japan than expansion and recessions are not inflationary.

Fri, 11/01/2013 - 05:43 | Link to Comment shinobi-7
shinobi-7's picture

To those people who see inflation everywhere: You're right, but this is only part of the picture. To the price of goods you must (and governments never forget) deduct technological progress. (That's a 2Tb hard disk for the price of 1 last year.)

This means that we should naturally live in a deflationary world (where the value of money goes up every year Bit Coin style.). But sometimes in the past Governments realized that in order to distribute more that they could tax or borrow it was a good idea to first put their hands on these 1 or 2% a year of technological progress. (That's how 5% of inflation becomes 2%) Fair enough?

Sat, 11/02/2013 - 11:02 | Link to Comment Vooter
Vooter's picture

A loaf of bread cost $0.21 in 1963. A gallon of gas cost $0.30. Which technological advances have made bread and gas ten times more valuable than they were in 1963?

Fri, 11/01/2013 - 05:59 | Link to Comment can
can's picture

The Guild Basic Needs IndexTM (www.gbni.info) provides a better view at real cost of living developments.  It peaked in 2008, came down, had another, lower peak in 2011, and moves more or less sideways since beginning 2012.

 


 

Fri, 11/01/2013 - 06:09 | Link to Comment falak pema
falak pema's picture

This has been a huge year for stocks, and that is likely to continue. However, not all stocks are created equal. Several DJIA stocks simply are not living up to the performance expectations of the broader stock market.

Why are the worst performing DJIA stocks in 2013 : Coca Cola, Mcdonalds, IBM, Caterpillar, At&T, Exxon ?

The Five Worst Performing DJIA Stocks of 2013 - MarketWatch

What does rising Inflation thru monetary devaluation and falling consumption do for these stocks?

Fri, 11/01/2013 - 06:38 | Link to Comment negative rates
negative rates's picture

In cats case it's because they lost a ton o money from bankruptcies, and now 3/4 used up and 1/4 paid for machineary sits idle waiting for the next real estate boom.

Fri, 11/01/2013 - 07:24 | Link to Comment IlluminatiSlaveDog
IlluminatiSlaveDog's picture

The inflation numbers are just more Orwellian doublespeak.  Lies are truth, war is peace, slavery is freedom..... No different than the propeganda that the former Soviet Union spewed out to their subjects.  The number of hours, without any compensation, that salaried US IT workers have to work to keep their jobs from the offshore Indian contractors is obcene.  All the profits going to the executive bonus pool. Productivity gains comrade  

Fri, 11/01/2013 - 10:36 | Link to Comment madcows
madcows's picture

I just did the YoY calcs through October, and had our personal inflation rate at over 10%.  Fuck you BLS, you lying, filthy, disgusting traitors.  you should be hanged.

Fri, 11/01/2013 - 14:06 | Link to Comment bunzbunzbunz
bunzbunzbunz's picture

Is that 10% without bothering to change companies providing services, alter shopping habits, or in the extreme case move to a different city where costs are more beneficially associated to your lifestyle?

Hypothesis: lazy people who aren't willing to change will pay more. Example: I sign up for a magazine for $5/yr. The next year the subscription cost goes up to $30/yr. My god, THAT MUST BE 500% INFLATION. Or I'm an idiot for not cancelling. I'd rather have a scapegoat, so I'll call it inflation.

Thu, 11/07/2013 - 13:06 | Link to Comment madcows
madcows's picture

are you really that retarded?  what I call inflation is predominantly food, gas, clothes, utilities... essentials.

And, you are retarded.  Changing shopping habits to avoid rising costs is a way of AVOINDING inflation.  Moron.  If the cost of steak goes up, so I don't buy it, THE FUCKING PRICE STILL INFLATED.

I track all our expenditures, and check the inflation each month on a YoY basis.  10% is fucking 10% nimrod.  It's thousands of dollars each year.  If you want to know why the economy sucks, most normal families are getting thousands taken out of their income each year.  That represents a big hit to the economy.  Instead, you call inflation a scapegoat.  What a fucking idiot.

Fri, 11/01/2013 - 10:53 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture
Why Michael Boskin Deserves Our Contempt


“The debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.”

-Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003

http://www.ritholtz.com/blog/2010/01/why-michael-boskin-deserves-our-contempt/

Fri, 11/01/2013 - 11:18 | Link to Comment Dark Space
Dark Space's picture

I don't know why that story about the guy throwing away a half million bucks made you smile. He was obviously going through a traumatic experience and had a break with reality. The gold is gone forever and he's in jail. He'll likely be charged with failing to pay child support and stay in jail forever because you can't give your money away and then choose not to pay - it just doesn't work that way. So he's going to not get treated for his mental health issues, he'll probably get raped and beat up on a regular basis, and his wife is going to be short $36k a year (which perhaps is questionable as to whether that is fair). Not sure why any of that would make you smile you sick fnck.

Sat, 11/02/2013 - 10:54 | Link to Comment Vooter
Vooter's picture

You don't really think he threw the gold in a dumpster, do you?

Fri, 11/01/2013 - 11:43 | Link to Comment moneybots
moneybots's picture

"Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly."

 

It is really a fiction.

Rising wages are going to be eaten up by faster rising inflation, so it won't help borrowers to repay debt.  There is no reason to have inflation, except that the money has to be borrowed into existance, thus there is interest cost.

 

Sat, 11/02/2013 - 10:53 | Link to Comment Vooter
Vooter's picture

Ah, so they use dumpsters instead of boats in Colorado...interesting...

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