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Guest Post: Inflation Is Raging – If You Know Where To Look
Submitted by John Rubino via Dollar Collapse blog,
Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong. Inflation is an increase in the money supply, of which a rising general price level is just one possible result – and not the most common one.
More often, excessive money creation shows up as asset bubbles, where the new money, instead of flowing equally to all the products that are for sale at a given time, flow disproportionately into the ‘hottest’ asset classes. Readers who were paying attention in the 1990s might recall that the consumer price index was well-behaved while huge amounts of money flowed into financial assets, producing the dot-com bubble.
The same thing happened in the 2000s, when excess currency flowed into housing and equities. In each case, mainstream economists and government officials pointed to modest consumer price inflation as a sign that things were fine. And in each case they were simply looking in the wrong place and completely missing the destabilizing effects of an inflating money supply.
Now we’re at it again, with economists, legislators and central bankers using low consumer price inflation as a rationale for even easier money, while ignoring epic bubbles in sovereign bonds, equities, high-end real estate and collectibles around the world. These bubbles are the true evidence of inflation, and since they’re growing progressively larger, it’s accurate to say that inflation is high and accelerating. Let’s take some exotic examples, first from the art world:
Art prices painting a disturbing picture of inflation
The Francis Bacon painting “Three Studies of Lucian Freud” was sold for a whopping $142.4 million as part of a $691.6 million Christie’s sale on Tuesday night, making it the most expensive work of art ever sold at auction.
Some argue that the sale is giving us a message about inflation that investors aren’t getting from the action in gold, the Dollar Index, or the government’s official consumer price index data.
“Asset inflation took another leg higher last night,” wrote Peter Boockvar in a Wednesday morning note. “Thank you Federal Reserve, and thank you Bureau of Labor Statistics for not including art in the consumer price index.”
And this from…would you call it the jewelry world?:
Most expensive diamond ever sold goes for $83.2M
Sotheby’s just dropped the hammer on the most expensive diamond ever sold. The stone, a 59.6-carat flawless pink diamond called the “Pink Star,” was auctioned for $83.2 million, according to Sotheby’s. That made it the most expensive jewel or diamond ever sold at auction.
The previous record for a diamond sold at auction was $46 million, for a 24.68-carat pink diamond bought by Laurence Graff in 2010. The auction follows yesterday’s Christie’s sale of the largest fancy-vivid orange diamond known to exist, a 14.82-carat stone that sold for $36 million—the highest price-per-carat ever paid at auction.
Now, if the super-rich are going to covert their paper currency into tangible things – at a time when governments around the world are contemplating wealth taxes – they need safe, confidential storage. And the market is responding:
Über-warehouses for the ultra-rich
PASSENGERS at Findel airport in Luxembourg may have noticed a cluster of cranes a few hundred yards from the runway. The structure being erected looks fairly unremarkable (though it will eventually be topped with striking hexagonal skylights). Along its side is a line of loading bays, suggesting it could be intended as a spillover site for the brimming cargo terminal nearby. This new addition to one of Europe’s busiest air-freight hubs will not hold any old goods, however. It will soon be home to billions of dollars’ worth of fine art and other treasures, much of which will have been whisked straight from collectors’ private jets along a dedicated road linking the runway to the warehouse.
The world’s rich are increasingly investing in expensive stuff, and “freeports” such as Luxembourg’s are becoming their repositories of choice. Their attractions are similar to those offered by offshore financial centres: security and confidentiality, not much scrutiny, the ability for owners to hide behind nominees, and an array of tax advantages. This special treatment is possible because goods in freeports are technically in transit, even if in reality the ports are used more and more as permanent homes for accumulated wealth. If anyone knows how to game the rules, it is the super-rich and their advisers.
Because of the confidentiality, the value of goods stashed in freeports is unknowable. It is thought to be in the hundreds of billions of dollars, and rising. Though much of what lies within is perfectly legitimate, the protection offered from prying eyes ensures that they appeal to kleptocrats and tax-dodgers as well as plutocrats. Freeports have been among the beneficiaries as undeclared money has fled offshore bank accounts as a result of tax-evasion crackdowns in America and Europe.
Parallel fiscal universe
Freeports are something of a fiscal no-man’s-land. The “free” refers to the suspension of customs duties and taxes. This benefit may have been originally intended as temporary, while goods were in transit, but for much of the stored wealth it is, in effect, permanent, as there is no time limit: a painting can be flown in from another country and stored for decades without attracting a levy. Better still, sales of goods in freeports generally incur no value-added or capital-gains taxes. These are (technically) payable in the destination country when an item leaves this parallel fiscal universe, but by then it may have changed hands several times.
Some thoughts
Clearly, inflation is raging. But because so much of society’s wealth is flowing to the top 1% — who after all can only drive one car at a time and tend to eat no more than the rest of us – inflation isn’t showing up in food, suburban houses or other mass-market products. Instead, trillions of disposable dollars are pouring into real assets that are then hoarded in mansions and high-end storage facilities. This is a truly startling asset grab when you think about it.
The one unique thing about this episode is that past migrations of capital from financial to tangible assets have included precious metals, which tend to be in demand when paper currencies are being mismanaged. That gold and silver aren’t participating is the strongest proof yet that they’re being manipulated to hide the impact of rising debt and excessive currency creation. After all, if you’re going to spend $100 million on art, your financial adviser will almost certainly tell you to diversify into farmland, oil wells and gold bars.
That this hasn’t happened doesn’t mean it won’t. Picture a chart tracking the tangible asset classes of the super-rich: art, jewelry, high-end London and Manhattan apartments, beachfront property, gold bullion, etc., the things that are exist in limited supply and continue to exist no matter what the S&P 500 or 10-year Treasuries are doing. Virtually all the lines on that chart would would be looking parabolic right about now – except precious metals. A billionaire, trying to figure out where to move his next hundred mil would look at this chart and see one outlier, one thing that hasn’t yet gone through the roof, and make the obvious choice. That day is coming.
But looked at another way – in terms of the amount of paper currency being used to buy them – you could say that gold and silver are by far the most popular tangible assets in the world. China, India, and Russia between them have snapped up about 4,000 tons of gold this year, worth about $153 billion at the current price. That’s a lot more than was spent on art. It’s just that these purchases, massive though they are, aren’t moving the price.
But they are moving something: the gold reserves of the western central banks that are sending their gold eastward. They’re moving those down, at an unsustainable rate. So Western central banks face a tough choice: keep sending their gold to Asia until it’s gone, or let the super-rich bid it into the stratosphere in line with art and diamonds. Sooner or later, they’ll have to choose door number two.
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If you know where to look ...
I just have to look into my purse to know it exactly ....
This is a good visual of hidden inflation. Same price...smaller size.
http://3.bp.blogspot.com/-IXLw8yoqb4k/UhGZFsXrRnI/AAAAAAAABjc/2nUTuZis9eE/s1600/IMG_0857.JPG
1 15.1 oz box Ritz crackers @ 3.89 = .2576 cents/oz
1 13.7 oz box Ritz crackers @ 3.89 = .2839 cents/oz
Price increase of 10% +
Just got off the phone with Grandma.....buy is she super ticked!
I knew those bastards were lying to me!
Ritz suck.
It's the skyrocketing price of Cheez Its that pisses me off.
The small box of Cheez Its looks like an overgrown sample size now.
Just... have to.... hang-on.... a.... little.... bit..... longer.......
Cliff Hanger!
And in the past 8 years, Soybean Meal, High Protein, has gone from $178.38/ton Sept 2005 to $519.66/ton Sept 2013.
If anyone spent two minutes thinking about the implications of those two graphs they would be a long way towards explaining inflation in food prices.
Buy a home with a little bit of good pasture, a family milk cow, and plant a garden.
Mrs. horseman's green peppers from her garden stuffed with onions, garlic, tomatoes, home-grown grass-fed beef, and homemade parmesan cheese.
Amen, HH. There is absolutely nothing so satisfying and so price-defying as growing and eating your own food. I have several shelves in our nature-cooled basement larder that are full with home canned vegetables, relishes, sauces, jellies, jams, and fruit we grew ourselves. There is not only the great feeling of having produced it yourself, but also pride and contentment knowing you don't have to be dependent on stores for nutritionaly inferior an ever-increasingly expensive items. God bless Mrs HH, her dishes always look so appetizing. Good health to you both.
all you need is a noodle machine. that store bought stuff,as with everything else, just can't compete. and try cooking those with the sweet goat whey left over from making queso and ricotta.
My homeowener's insurance rose 7% again this year after rising 6% last year. Condo insurance downtown shot up 15% for those owners!
Health insuance....up 16% for me and the rest of the office.....
Airfare....and so on....
Inflation is hiting sectors..some harder then other. But remember, this is in an environment of almost zero money velocity. What happens when money starts to flow again?
I remain long sharecropping and black markets.
The quality of goods, like shoes and socks, has also decreased by at least 10% in the last 5 years.
Something else I see at the grocery store these days, they will have two different product sizes of one product, and one will be 'on sale' and still cost more per gram than the other size! Woe to the low-math grocery shopper.
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
--John Maynard Keynes
as to the hay, a lot of that is thanks to years of unremitting drought. 80 lb bales at $14/20 are responsible for a lot of massive organized theft, previously totally unthinkable. just sayin'
But my DBA agriculture ETF share price has hardly moved during this time period.WFT??? Can anyone explain?
All paper is inferior to the real thing...not to mention the DB is pretty weakly these days. At some point all paper diverges from the underlying asset especially so if the paper is itself based on another paper.
I noticed the same thing with Sunchips the other day. I picked up a bag and muttered WTF to myself, then realized I should not be so quick to get pissed at our teenage boy who can eat almost a whole bag in one sitting; they are now about the same size I remember from years back when they were called the "big grab" or something similiar.
Relax, the small ritz will grow up to be a single-serving size. Last I checked 5 yrs ago, u-needas were $13 a lb.
Soon they will all be replaced with store generic products, smaller package, famiar higher price.
But they are moving something: the gold reserves of the western central banks that are sending their gold eastward. They’re moving those down, at an unsustainable rate. So Western central banks face a tough choice: keep sending their gold to Asia until it’s gone, or let the super-rich bid it into the stratosphere in line with art and diamonds. Sooner or later, they’ll have to choose door number two.
qft
I'm pretty confident the central bank gold will keep flowing into private hands. I know the narrative has been that it's all been flowing to Asia, but I see that as only being part of the story. Consider, for example, the large scale "sale" of GLD shares by the likes of Soros and Paulson. It is worth noting that a share redemption = sale. Keep also in mind JP Morgan's custodial duties as it relates to massive flows of official inventory into private, confidential hands. Something tells me certain masters o' the universe are stacking heavily. How could you not, when you're faced with this:
http://research.stlouisfed.org/fred2/series/BASE?cid=124
the only factor that has kept the sheep coralled and docile is how the US exports its inflation (on consumer goods). but the worm is turning, albeit slowly, away from the dollar with bilateral trade agreements, currency swaps, not to mention the Saudi's anger over Syria (kiss goodbye to the petro dollar too).
all this takes time and moves ever so slow, but the writing is on the wall for anyone with eyes to read. it seems, though, that this administration could not care less, that this entire march to American economic extinction was no mismanagement or accident at all. one might even say this looks more and more like an orchestrated move to a NWO, and the war they are pushing for will be the next move.
Amen.
Also the price of tabacco :
STEALth Inflation :
140 grams = EUR 14.99 .. 2 years ago
125 grams = EUR 14,99 .. 1 year ago
120 grams = EUR 15,99 .. 6 months ago
115 grams = EUR 15,99 = now
Increase of 30% in 2 Years
not just that, but look at the price of bitcoins!
i used to be able to buy one for $30, now they're like $800!!!
Should help the fat bastard epidemic though
Yeah. Now, in addition to most food having no nutritional value, it will have reduced calories too. Should do wonders for everyone's health.
Funny you should mention Ritz crackers.
I was just in the market yesterday when I notices the short square Pkg. instead of the usual tall box. We had an ice storm so we stopped at a Walmart on the way home for a few odds and ends Thanksgiving items instead of our local market. They had the new short boxes on sale @ $2.50.
I guess the trick is to sell the new size cheap at first to get you used to the size change before jacking up the price.
Try to find a 5 or 10 lb. bag of sugar now. Most are 4 and 8 lbs. at same price.
No inflation my ass.
That's why you get sugar at Costco. Buy a 25# bag and just move it into other containers.
Old gallon juice bottles are the BEST for doing that. Just wash them a few times to completely clear out the residue.
Try to get yourself off sugar - and products containing sugar and corn syrup - and you will save a lot on your medical bills.
This is a good visual of hidden inflation. Same price...smaller size.
http://3.bp.blogspot.com/-IXLw8yoqb4k/UhGZFsXrRnI/AAAAAAAABjc/2nUTuZis9eE/s1600/IMG_0857.JPG
1 15.1 oz box Ritz crackers @ 3.89 = .2576 cents/oz
1 13.7 oz box Ritz crackers @ 3.89 = .2839 cents/oz
Price increase of 10% +
Been going on for the last 5yrs,bad part is if one is not enough you must buy 2, then you paid 20% increase.
Just at grocery store buying supplies for Thanksgiving....
That 5 lb bag of Domino Sugar is now 4 LBS!!!!! and a box of brown sugar is $1.59 - compared to the old box in the pantry that's marked $1.39
Meat prices are absurd - getting near $100 for a large rib roast.
Dial soap has a big chunk scooped out of the bar - one way to downsize.
and I won't comment on heating oil costs - under $1.00 when we bought 20 years back and now well over $4
You haven't bought fuel oil in 20 yrs...whatta you got a damned 1,000,000 gallon tank?! I agree with you but the + 1 is for the tank, you're a forward thinkin' fiend!
This is why they don't teach home economics in school anymore
Thousands of food packages keep getting smaller and smaller while corrupt officials keep saying there’s no food inflation. Mexico's former president Felipe Calderon practically begged the banks to stop speculating in foods:
He told Fox News: "Four years ago, more than 90 percent of the purchases of grains and food came from companies related to production or distribution of grains. Today… more than 40 percent are operations related to financial institutions." That’s irresponsible US banks making food more expensive for everyone and forcing 48 million American into food stamp soup lines. -- Recalling ‘Tortilla Riots,’ Mexico President Warns About Food Crisis, Sept 11 2012, CNBC
To add to your list of "visual hidden inflation": 24 slices of cheese turned into a 22 slice package, 3 oz of salmon shrunk into 2.6 oz,, 18 ounces of peanut butter "melted" into 16.3 oz, 14 oz of Lay's chips instead of 16, a 5.7 lb. sack of Iams dog food downsized into 5 lbs.
Adds Alec Deacon: "Sure, corrupt politicians will swear on the Bible there's no food inflation... while at the same time mortgaging our children's future. But inflation is everywhere. And it's so dangerous... “
http://www.cnbc.com/id/48996423
@AlaricBalth
I can't tell you how many people I've had to explain that same simple concept to because they just weren't paying attention. It's a stealthy way to hide the shock of price inflation. Nobody pays attention. They don't think about it at all. And when it's pointed out to them they just brush it off because most people are so caught up in their normalcy bias that they can't be shown or informed of anything that doesn't fit their narrow little paradigm that "everything is okay".
Once the suppliers can't lower the quantities of their products anymore or make the bags and boxes big enough to look "fuller" well they'll just say, "fuck it", and those smaller quantities of products will stay the same but the prices will escalate even higher than they were when they were being sold at a larger quantity. That's when people will start to wake up.
And it doesn't help that 50+ million people (most of whom are severely taking advantage of the system) are on SNAP EBT cards. If you don't think that causes inflation on certain products then you're crazy. So not only are the workers/makers paying more for products, we're also paying for the millions of Free-Shit Army drones to scoop up food for free as well.
We're getting fucked from both ends and then some!
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered
~TJ
The quote is not accurate. But I dont want to understate TJ contributions to liberty.
http://www.monticello.org/site/jefferson/private-banks-quotation
Like many quotes from people through out history ........ it does do a good job of summing up his beliefs accurately though.
What difference at this point does it make? Our job is to do the bankers bidding and make sure they never suffer again.
Try wiping your Ass!!!
if the toliet paper roll gets much smaller,they will have to put it on a SPOOL!!!!!!!
It wont be long until you can get two rolls side by side on the tp hanger.
Take it from the Popper,some of these ladies have a lot more backdoor then others!!! Giggity!
Toliet floss aint gonna cut it!
Mr Whipple says: GO LONG CHARMIN!!!
Vic Rattlehead icon=+1
Soon, Wal-Mart will have to put TP vending machines in each stall.
They alrrady have them. They are called Cash Registers and the Checkout line. There are some who purchase their unprocessed shit, digest it, then return some processpool shit back on the currency the next time they shop at Wal~Mart.
Why do you think they wear Plastic Gloves?
(They will not tell you upfront. They will say, "Oh the money is dirty.")
Well if you ain't eating as much then you ain't shitting as much. Besides..That is what the Currency is for. Currency has a dual usage now. Toliet Paper...and afterwards you can spend it.
They will trade your used Toilet Paper at the Bank for nice clean Toilet Paper at your local Bank Branch at no cost.
Why flush currency down the toilet?
Now is your currency going down the toilet? I mean...think about it. When you accept change from your Grocer why is it that they are wearing Plastic Gloves? Do they know that the Currency has been up someone else's ass crack, and, you do not?
Nobody has ever refused my currency.
The Stinkin' Lincoln and the Rankin' Franklin still spend.
My yogurt was £3 last week. This week it is £3.50. BTATFH in yogurt!!!. There ain't no inflation according to FYB (fuck you ben) so keep buying that yogurt. Next week I'm going to go long on 10,000 pots of yogurt with Tesco, and stuff the sell by date, just BTATFH.
Yes I am loosing it!!!!
The sell date is issued to increase the velocity of yogurt buying.
I'm nit sure about That. I eat lots of yogurt. If it's 3-4 days past exp. Date you can notice a difference .....2 weeks past. Forget it !!
My point is the sell date has nothing to do with the eat-by date.
Get with it, man! You need to buy paper yogurt, it lasts forever.
The top 8 emerging markets have an average inflation rate of 6.3%, led by India’s double- digit pace, Indonesia at 8.3%, Turkey at 7.7% and Russia at 6.2%
Just look at the items on the CPI index and then dont look there.
Shrinking food weights in familliar packages, here in the USA. Gas was <$2, then $4, now $3.(too, similar related: Look for PI Typhoon to influence sugar prices, maybe?) Uh yeah, it's all goin to art and compressed carbon rocks.
the pound package of coffee or bacon went to 12 oz last year, and now I'm seeing 10 oz pacakges for the same price as 16 oz packages before.
Of course, if you asked 100 Americans under 30 how many ounces were in a pound, I'll bet less than 15 would know the answer.
Funny, the druggies know 16 oz is a pound!
lol.....
yeah, they do mother nature stuff and know weights thereof, but some of the oz is milk sugar increepflation from distri-friction.
I thought they used the metric system.
28 grams/Oz
Of course when talking Troy weight the answer is 12 oz/pound...Sell Paper - Buy Physical - Sleep Well!
28 grams in an ounce, 16 ounces in a pound. A lady by the name of Mary Jane once taught me that.
sp3 hybridized carbon, or carbon in a tetrahedral lattice.
If you can shrink the package, the price can stay about the same, and the quality of the ingredients goes down.
If you cannot shrink the package, the price goes up, and the quality of the ingredients goes down.
It's a lose lose for most of us.
Inflation is the increase in money supply, not the increase in prices (that is called BULLSHIT).
Much like the popular phrases...."I could care less"(it's couldn't) and
Money is the root of all evil (close, but it's the LOVE of money that is the root of all evil)
@orangedrinkandchips
He's right. Inflation is the increase in money supply. If there is no increase in the money supply, price can still go up if demand exceeds supply. Since very few sheeple understand monetary policy or the deleterious effects of too much money creation, most people attribute rising prices to rising real demand for the goods.
Agreed.
when I read about art and diamonds making all time OMG highs in auctions, it reminds me of the Law of Mass.....
If you crush a can, it still weighs the same but looks different. The "mass' has to go somewhere and it won't go away.
Liposucktion(sp)....same story....so you get your ass sucked out....it wont go there again BUT IT WILL GO SOMEWHERE.
This money will go somewhere! It shows! Just take a look.
The Fat ends up in Soap...Tyler Approved
Yep.
MV=PQ. You can have an increase in money supply without a corresponding increese in prices but the common symptom is an increase in prices.
On an unrelated note. WTF is with the god damn cereal commercials. Every time I move to a new page these things pop up and starting playing interrupting Eric Johnson's riffs. I'm really at a point of rethinking spending any more time on this site. Its really going donw hill on this site and whether I am on it or not, the world is still going to hell in a hand basket
Because in a real economy, price increases would signal the invisible hand that guides the economy to add capacity via new competition.
Most of those 1 lb packages are now 12 oz. Coffee packages have shrunk as well.
Go to your local eatery and you can see those $7.25 meals now cost you $11 out the door.
Little by little the street is squeezing the small person.
Like boiling the frog slowly.
Here on the west coast, a fast food chain called Carl's Jr. started selling what they called "The Six Dollar Burger" around 10 years ago. Price back then: about $3.29. The marketing gimmick was that you could get a restaurant quality burger (that would typically cost 6 bucks in a sit-down restaurant) for a little over half the price.
I wondered back then how long it would be before the Six Dollar Burger would cost more than six dollars. It doesn't yet but it is getting close.
I know you can't get a burger in a sit-down restaurant for $6, though. $10 minimum.
Well, if your central bank is giving billions of dollars each month to the owners of their largest banks, and if the business climate stinks to high heaven, what do you think is going to happen. The folks can't really buy more consumer stuff. They have three of every possible thing already.
There's no iflation, get over it.
Auto tires is where to look. Everytime I have to buy tires I don't. I just make sure I have a spare for when the next one blows out.
Tire prices are tied to the price of oil.
I just put 4 on the old Audi. Paid almost $80 less than last time (50,000 miles ago) for the same tires.
Apples to Apples, baby.
Inflation DOES, NOT, EX, IST. (4 syllables for emphasis when speaking)
My experience:
Reser's macaroni salad: October, $2.59. November: $4.28
Ajax dishwashing soap (52oz.): September, $1.69. November: $2.96
Hillshire Farms Beef Polska Keilbasa: October, $2.49. November: $2.96
The winner IS:
G.E. 53 watt halogen light bulbs (4-pack).
September: $1.69 (made in Mexico). November: $7.38 (made in China)...YES, this is NOT a typo.
Oh, yeah, the damned Rembrandt I wanted to buy just went up again...
Buy American artists circa 1850-1960...they're "investment comers" in the art world.
PS. American original comic book art, too(lots of it still CHEAP... you like Superman, learn and buy Superman, etc. (This one I know personally. 20~yrs bought/traded/sold, with a time machine I'd buy virtually EVERY page I ever passed on 10 years or more ago, once dreamed of owning a collectibles store, Ebay makes that fiscally unwise)!
BLS responds:
MScott, substitution list.
Macaroni Salad ---> Ramen Noodles + mayonnaise
Ajax dishwashing soap ---> Sand
Kielbasa --> Turkey Franks
Light Bulbs --> Sunlight
As you can see, inflation is next to zero.
At that rate, they need to warm up the "presses" 'cause we gonna have some dangerous deflation to deal with especially as the turkey dogs are later substituted by roadkill.
>> Kielbasa --> Turkey Franks
You young bucks really want to save some doe?
Pussy ---> Hand
Sane, disease-free bitchez are an incredibly expensive commodity that most men can not afford.
Especially the sane part!
Starting to look negative...
Ctrl+P 4-eva!
you don't have to look that far ... a pound of almonds used to cost around $4 ... in the last year the price has now jumped to $8/lb.
@pragmatic hobo
It's a good thing a own a pecan tree.
English and Black walnut grove on unincorporated acreage, just saying
Pistachios.
Through the roof. The Chineese love the "happy nut". But then again, who doesn't?
Any comments about the cost of...
HEALTH INSURANCE?
http://www.youtube.com/watch?v=Bg98BvqUvCc
Nobody is talking about it cause we cant handle the truth!
Benefits go down, costs go up....WTF OBAMA? SERIOUSLY?
BUT I though Mr. Obammy said the average family would save $2500 per year?
You're not suggestin...wait, you racist!
Yeah, well just wait until the exchanges create paper "Art" investments. That'll fuck the value of the "real" art, which can be manipulated until kingdom come, for which no one would ever go to jail, but only pay a small "fee", and admit no wrong doing.
Given that world grains stocks are steadily decreasing (measured in days of use), there is evidence the ROW is starting to be able to outbid the West for food...
Did anyone really think that oil increasing ~3 fold in price since 2005 (Brent) would not result in cost push inflation?
As for the uber wealthy, well at some point it is all about impressing your peers with want you can amass.... In some sense, many of them have more money than they know what to do with...
The price of a good going up (even oil) does not cause inflation. That's a fallacy. Inflation is caused by an increase in the quantity and velocity of money in circulation(and money substitutes, such as debt). Think about it. If the price of one thing goes up, the price of other things is held down by an equal amount. Marc Faber gave a great talk where he explained really well how you can have both "inflation" and "deflation" (in prices) at the same time. The example he used was if gold was discovered in one spot, you'd have everyone rushing over there spending cash in that locale causing price inflation, while the places where the people left would crash. It makes perfect sense. Wish I'd have kept a link to that video of his.
You clearly don't get....
For example, if the cost of resource extraction goes up because it requires more energy, the price is going to go up no matter what the money supply does....
It also applies to scarcity where supply cannot be increased by throwing more money at the problem....
That is cost-push inflation...
From 1998-2005, approx $1.5 trillion was invested to increase oil supply from 67-73 mmbpd, since then $3.5 trillion has been spent (2005-2012) to basically keep it flat...
Any discussion of economics that does not include resource limititions is moot...
Yes, Flakmeister, I understand that. If costs of a good go up, that good becomes more expensive; however, whoever is purchasing that more expensive good now has less purchasing power remaining to purchase other goods in the economy (or to allocate to savings). So the increased price of that good detracts from prices elsewhere in the economy and nets out. What you're describing is a change in prices, but the relative prices of goods in an economy change all the time as available resources and consumer preferences are continually in flux.
http://captiongenerator.com/9908/Hitler-not-pleased-with-Bitcoin
Asset price inflation is meaningless to consumers. It is the consumer price inflation that causes misery.
There's nothing in the article which proves that the physical asset price inflation taking place is caused by excess money supply, except probably in stocks. It could simply be that wealth is gravitating to the 1% and they are investing it in assets, thereby pushing up asset prices. No increase in money supply needed for this to happen.
Also, "inflation" means different things to people. Inflation of the money supply is a real but technical measurement whereas most people see inflation as a rise in consumer prices. Both are correct measurements. And as the author admits, a rise in the money supply does not automatically equal a rise in consumer prices.
"No increase in money supply needed for this to happen."
Then why is money supply increasing? What is the purpose of this activity, in your view?
The money supply is being increased to pump up the markets ...the stock & bond markets that is.
But not necessarily the precious objects markets (art, jewelry etc), which the article is mostly about. These MAY be getting pumped up for the reason I stated: a gravitation of wealth to the 1%.
...just my opinion. But 5 people don't agree :-(
Cut the Crap, Scrap the Cap.
Social Security Seniors need a raise from the Banks stealing all their Interest on Savings. Those low-end bucks get spent for local cash velocity circulating rather than stashed double-dutch for the fascist dominator corporate class.
i ask again - who is the legal owner of the gold in western central banks? this is something i haven't found a satisfying answer, because, as we know, most of the central banks are private enterprises. are they custodians for national treasuries? if not then this gold belongs to the families who also own the central banks. it makes perfect sense. instead of holding it in their private vaults, they used it as a start up capital to create central banks and take control of nations moneys.
if this is the case, then this is big! current flow of gold from west to east is a clear sign, that old banking families are changing carriages(central banks) and now they are in process of moving their personal wealth(gold in central bank reserves) in broad daylight via open markets by just calling it gold leasing, of course with clear knowledge, that this gold is meant never to be returned.
It actually makes no difference where gold goes from and to. That's the beauty of using gold as money Gold floes one direction, and then prices adjust forcing the gold to reverse directions and flow the other way. That's why the powers-that-be don't want such a system: they don't want a continual flow in one direction (into their pockets).
You have never applied you theories to the real world...
For example the existing stock of monetary gold is incapable of supporting the international oil trade....
And you are aware that the Gold-oil ratio has been remarkable stable from even well before Nixon shut the window...
Central banks are sole source vendors for country treasuries to purchase their currency.
You can cut a silver coin into pieces ane each will hold that fractional value and demand. Now try that with a painting or a mac-mansion.....
Nope.
You cut your pretty coin into pieces of *scrap* silver.
View: scrap prices
You are splitting hairs. If you take a 400 ounce good delivery bar and split it into 400 1-ounce ingots, the collection of ingots will be worth more than the 400-ounce bar.
The OP specified the medium as "coin"
he was most certainly not referencing a 400 ounce bar!
And cutting up a 400 ounce bar and selling the pieces requires trusting the person (entity) doing the chopping.
You seem to say "I could do this", assuming you were refering to me when you wrote "you take a 400 ounce bar".
No, nobody is going to buy ingots from me. It would be stupid for me to cut up a 400 ounce bar and try to peddle the remains. I further propose, that if the OP were to mangle a 400 ounce bar, that noone would want the remains for more than the scrap price.
Now, a professional could slice and dice a bar and make a nice profit. But this is not an enterprise the OP (nor i) should be doing in his mother's (nor my mother's) basement.
If a non-professional even scrapes his silver, he turns it into scrap.
You are still splitting hairs. The idea here is that precious metals are divisible. Art is not. Neither are McMansions. That said, just straight up land is a decent analog and a big reason why stable/multigenerational wealth likes both PM's and land, as land is also divisible.
Or a nusimatic, or 54 carat diamond or even a congressman or President..
We know that the Unemployment rate is a lie - this was admitted to last week. It's nice to see zero Congressman asking the obvious question: what IS the unemployment rate? Can anyone figure it out? Because 7.8% feels WAY low.
And so it is with inflation. Fresh produce, in particular, seems to be much more expensive than it used to be just a year ago. A grapefruit is $2 (although they advertise it as "2 for $4..." isn't that cute?)
Lemons are $.0.50 each, when they used to be $0.33 just a year ago. Sugar is sold in a 4lb bag for the same price that a 5lb bag used to be just recently.
Automobiles are keeping their cost down by cutting quality.
We all see it, and we all feel it. So who believes the statistics?
Who believes *anything* that this government tells us anymore?
This is really much easier than we are making it. Your biggest three expenditures over the cost of a year will dwarf any fluctuations in the small stuff.
Looking back over the last twelve months...
Personal Income Taxes----Up more than 10%.
Real estate taxes: up12%
Healthcare- up 34% BEFORE the new policy starts.
Homeowners's insurance: Up 10%.
I'd have to have food and gas drop by 50% for me to have no inflation.
Thank God I do not have any kids in college.....
This entire analysis is wrong, not because the author doesn't understand economics, but because he is ignorant of how the new global economy functions.
We have been laboring under the misconception that capitalism and markets exist to "some" degree, but we are way off the mark. Markets require some form of discipline to function in regards to price discovery. However, what happens when all discipline is removed? Further, if it is replaced with global command control?
Early communist command structures failed because they lacked a pricing mechanism to oversee efficient supply to meet demand. What happens if you can eliminate free markets and take your control global? Through central banks and the control of currency and credit in collusion with large corporations? With expanding populations to create excess labor supply?
By controlling prices and inventory you can place it where demand will pay the highest prices. By flooding labor markets, you can control wages and determine an appropriate standard of living, by expanding currency reserves in all countries, you can eliminate any real measure of inflation, deflation or benchmarks for asset values.
As long as the population agrees to remain invested in this new system, you have total control over who is rich and who is poor. World war becomes problematic, because it deceases labor pools. Military investment and expenditure becomes strategic- in advance weaponry for the control of populations, to maintain national rivalries and to control resources and their distribution.
To think, we all love to talk about the stupidity of the Illuminati, when they have effectively enslaved us in a new world order, without us even recognizing it. Studying economics in subject isolation leaves us with conundrums, like gold and silver prices, or national debts, or currency in circulation or FED balance sheets or foreclosure inventories, etc.
We are left arguing over the facade of an economic era that is past and destroyed, blind to the new realities that confront us. The only option is to get out of the system and create alternative political-economic markets that minmize our interface with the ruling oligarchy. First, we have to see and understand. We have to penetrate the matrix. Check your assumptions at the door.
As Ludwig-von-Mises explained, socialism collapses without market-based price discovery due to a lack of the means of "economic calculation."
Our fascist economy will eventually go the same route: without price discovery you can't produce the right mix of goods and services.
Mises was operating from the assumption that different markets existed and functioned. Mises' theories are irrelevant in a global command economy structure. Prices can be anything the collective wants by creating scarcity and demand valued in paper currencies which have no restraints (Japan, USA, EU). This is why we haven't seen a collapse and why we won't see a collapse.
Wealth becomes allocated by level of influence. There are no black markets for products to run to. Existing contraband are a function of Elite control and a behavioral weapon of choice.
The right mix of goods and services are merely moved globally to new markets with excess demand. Since production is in accordance with meeting minimum demand schedules, supply is never an issue.
Economies will never collapse (see Greece), some will just be poorer than others. The level of goods will be what is necessary to control populations and channeled to the most important segments to maintain order.
Gold and silver may be marginalized until they are concentrated into the hands of half a dozen families and their proxies. Their values have no correlation with historic economic theory.
Economies will NOT collapse- they will tighten and become more rigid, more controlled with less and less opportunity. It is the anti-market economy and values will be TOTALLY subjective.
And pray tell what is the true cost of a tonne of C02? How is the value of the Ogallala aquifer discounted?
Or you are assuming like all the economic asshats of old that the Earth has infinite carrying capacity?
"Now we’re at it again, with economists, legislators and central bankers using low consumer price inflation as a rationale for even easier money..."
WHERE ARE YOU SEEING LOW CONSUMER PRICE INFLATION??? Let us know, so we can shop there...
The good news is, at some point the downsizing of product will have to stop..
Perhaps at the travel / trial size level?
Everything will become sample size. I wonder how that will work with clothes, if we eat less for the same money we should fit in smaller clothes. Clothes have more than doubled over last five years.
Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong. Inflation is an increase in the money supply, of which a rising general price level is just one possible result – and not the most common one.
There is only one "proper" level of inflation .... and that is zero. First, know "money is a promise to complete a trade". This is obvious from examining trade, a three step process: (1) Negotiation;(2) Promise to trade; (3) Delivery. In simple barter (even when one party exchanges money), steps (2) and (3) happen simultaneously on the spot. Money allows (2) and (3) to happen over time and space.
Traders "create" money by making trading promises. With a properly managed Medium of Exchange (MOE), these promises are certified (recorded and money certificates or records generated). These certificates then circulate in the marketplace. They are accepted in simple barter because traders are "guaranteed" they never change their value ... any time ... anywhere?
How is this possible? Easy. Money is created by traders making trading promises and extinguished on delivery according to those promises. Thus supply and demand for money are always in perfect balance. This is necessary to guarantee zero inflation.
But what if the trader DEFAULTs? Then supply and demand for money are out of balance. The solution is to collect an equal amount of INTEREST to recover the DEFAULTed certificates and protect the marketplace from ensuing INFLATION (of the MOE).
The operative relation is: INFLATION = DEFAULT - INTEREST
Proper management entails monitoring DEFAULTs, collecting a like amount of INTEREST, thus guaranteeing zero INFLATION everywhere at all times.
Further, proper management means freely certifying "all" trading promises. The assessment of INTEREST is an actuarial problem just like assessing risk in insurance underwriting. Responsible traders enjoy zero interest. Irresponsible traders have to go to pawn shops for their money.
It is important to note here that "a rollover is a DEFAULT". All governments rollover their debt. They never keep their trading promises. Further, they pay the least amount of interest of any class of traders. So to avoid inflation, other traders must pay more than their fair share of interest. Governments are deadbeat traders. With proper collection of interest from them, they would never be able to initiate a workable trade unless they changed their ways and kept their promises.
Complete transparency is necessary to guarantee proper management of the MOE. It must be impossible for DEFAULT to not equal INTEREST and this can't be accomplished in secrecy.
It is "impossible" to measure inflation of any MOE. However, it is trivial to guarantee it is zero; thus the need to measure it is obviated.
Todd Marshall
Plantersville, TX
It is also important to understand that printing, inflation, steals from any productivity increases that an economy may achieve FIRST. Therefore, if an economy is growing productivity at, say, 3% a year and the criminals are printing, stealing, 3% a year, then price increases may be about zero, but they are still stealing about 3% of the economy a year.
Now if yearly prices increases are say 5% in an economy producing 3% productivity gains, then the theft from the economy is really 8%.
Now over time the criminals destroy the returns on capital and labor and have to print, steal, more and more, but that is a story for another time.
Guillotine maintenance tip #3: Spare blades should be stored in a sealed and dry box with an amount of desiccant equal to .1 gram per square centimeters of the sum of both sides of the blade.
By the relation: INFLATION = DEFAULT - INTEREST, if a trader can DEFAULT without an equal amount of INTEREST being collected, there will be inflation. If more INTEREST is collected than DEFAULTs experienced, deflation will ensue.
Proper management of any Medium of Exchange (MOE) has no interest whatever in prices or growth or productivity gains or unemployment rates or nearly anything else economics voodoo hand-wavers spew out as control knobs and instrumentation they have concern for. It only requires that DEFAULT = INTEREST at all times everywhere, and that this performance is open for all trader's view.
In a properly managed MOE, thieves are removed from the marketplace immediately on detection. Proper management makes certification of their trading promises impossible because interest collections from them would equal any trading promise they would try to make. All governments would experience this treatment as they are always the biggest thieves.
Dear God, look at lumber prices! Panelling that was $9 bucks a sheet 2 years ago is $15. 33% increase in other lumber products. Oh, well, my customers will have to foot it.
Soon you will see fewer choices --many products disapear as companys downsize product lines. Same as it is in all gov't controlled economies. With fewer choices comes fewer out lets and then the lines form for bread and potatoes-- Happy Thanksgiving fellow travelers.
A woman here sent her kids to daycare with lunches which did not include any grains. The lunches were otherwise fully balanced meals with the standard meats, vegs, fruit, milk. So the daycare had no choice but to fine her 10 dollars and feed her kids some Ritz crackers.
12 oz pkg of bacon is $5.47 here, wtf....1 lb of ground beef, 90/10 is $4.87 lb...
Thank goodness they don't include food prices in the 'official' inflation numbers, imagine how bad inflation would be????
PS - remember when you could buy a pound package of bacon?
forget bitcoin, im going to cryptsy.com and going all in on digitalcoin before anyone else notices.
hmmm..methinks central bankers have no right of title to gold. it doesn't belong to central banks as it is a sovereign asset. shipping a country's assets east is effectively acting as a "fence" for eastern nations, that is..CB's are "fencing" stolen property.
But they are moving something: the gold reserves of the western central banks that are sending their gold eastward. They’re moving those down, at an unsustainable rate.
UPS is heaping big increases this on their fees. The 2014 ground minimum charge is $6.24, a 6.8 percent increase from 2013. Amazan shoppers will once again be frenzied buyers thanks to "Free Shipping" on items that will cost 10% more to buy, at least....
SOS SOS SOS SOS SOS SOS SOS SOS SOS SOS
Inmate of open-air prison run by lunatics and populated almost entirely by zombies is desperately seeking a pen-pal ... because God gave Eve to Adam, and Aldous Huxley gave someone to Winston Smith.
For mutual support in these trying times, am seeking fellow non-zombie intelligent, open-minded, and well-informed inmate for discussing topics of mutual interest, such as:
Both actual and notional nuclear accidents, and nuclear technology of all sorts. Is nuclear safety always an oxymoron?;
Same as it ever was. “Kill the man, kill the problem,” Joe Stalin. Change is a process, not an event. Chicken Little has always been wrong, so why not now?
Same as it ever was. Bankers v. The People is nothing new. In 1833 Andrew Jackson took on and succeeded in killing the Second Bank of the United States. In 1963 JFK took on the Fed and was killed. The bankers will do “whatever it takes” to keep it going as long as possible;
Same as it ever was. See Historical Revisionism of WW1 and WW2 as a battle of valiant truth-telling historians versus the plush OSS/CIA myth-telling “historians” as waged notably by the largely, and very sadly, forgotten Harry Elmer Barnes, 1889–1968. Many brave souls such as he have seen history through the lens of The Truth is First Casualty of War … and lived to tell the tale, or at least published before their death;
Same as it ever was. See John Kenneth Galbraith 1975 Money: Whence it Came, Where it Went about the Capitalist Crisis as predicted by Karl Marx. Four decades later and still going?;
Same as it ever was. 1984, Alice in Wonderland, and The Wizard of Oz as works of history – and Newspeak, shunning, straw man, murder, etc. as (largely) effective social controls;
zerohedge.com as island of sanity, albeit sorely lacking in collegiality; and
weaknesses in the prison system which might allow its escape and/or subversion.
SOS SOS SOS SOS SOS SOS SOS SOS SOS SOS
ALso, beware you Satellite TV/ Land Line Phone/ High Speed Internet bundels! These fucks have contracts no man can understand. And once you sign, you bill goes up every month non-stop. I called my provider and told them to go fuck themselves, I was sick of the rate increases. Well, when I orded my phone cancelled and then said I wanted to dump interent, then the bastards changed their tune, slashed a big amount off the costs and gave me a 1 year contract. Why? I am sure that if you threaten to leave, and I told them I was going, they Have to do something or lose your business. By all means call these fucks and fight with them. It saved me a bundle!
Car insurance and house insurance are up. Why? Just look at natural disasters! The companies are trying to recoup their losses. We who have no claims are being jacked up to cover those who live in disaster prone areas. Though I hear from friends in Florida and the Gulf Coast that companies are walking away rfusing to write a policy at any price. They know what is coming. Inside a couple years another mega hurricane is going to slam that area. They DO NOT want to be holding coverage for these people. I hear states are providing insurance, I could be wrong, but I have heard that. If so, then a state will go bankrupt in the next hurricane.
Inflation is everywhere. You just need to look at food, fuel and health care. And good luck living without those Eh?
Having just moved from Naples FL, I can confirm the home insurance issue. For one, what they did was redraw all the flood maps about 1.5 years ago. Anyone on the coast is in 'flood zone', my insurance doubled. Speaking with the locals on my street (I had moved there from up north), in over 25 years, the street had NEVER flooded, even with all the storms that ripped through there. However, as of the redrawing, just about all of the 'regular' insurers (Allstate, Nationwide, etc) all refused to write. I was able to get insurance last year through a company called Tower Hill. It was running just over 3400 a year to insure my somewhat humble property. That didn't include the FEMA 740/yr you have to buy. My agent told me that in another 2-3 years EVERYONE on the coast was not going to be able to get insurance and that we'd all have to be insured through the Florida state plan, which was more expensive, according to this chap, than what I was paying at the time. I'm in the northeast again and my insurance is now 850 a month for a similarly priced home. Car insurance is significantly less expensive as well. Close to 2500 (no accidents, speeding tix) down there to now 1150.
I am wondering really how the home owners can cope with the insurace rates, and what does this do to property values. When you are house shopping and your real estate agent mentions these huge insuance rates, that must send buyers running for the hills.
I have heard from friends down if Florida, that the next BIG one will drive a nail into coastal property's heart. They are not near the coast, but they are on flat wet ground, thus any storm surge over a couple feet comes racing inland.
The weather pattern in the Pacific, the el nino/ la nina cycles have been acting strange lately, a persistant la nina [cool water phase] has been hanging on. I feel that when the next el nino does break upon us, it will unleash a string of disasters. Not hurriances, as el nino tends to rip them apart, but many other disasters result from a big maybe record el nino that is coming sometime in the next few years.
The big re-insurers, the guys who insure insurance companies, they keep tight records of every little hick up in weather losses. They are nervous by their own accounts, and are even considering their whole business model, as the rate of loss increases is going to destory insurance and re-insurance. Government will be called upon to insure the people, a government already broke. That is some joke.
It doesn't matter to the wealthy, and by my experience down in Naples, there are A LOT of them. The 3 years I lived there, year round, on the main drag down there for big houses, Gulf Shore Blvd, has had a major building trend. I would guess they've built at least 12-15 large houses. Not big houses, I'm talking 20-30 thousand square feet. Huge. They look like hotels, and they're just someone's 'second home', or winter home.
My friend's mother has lived on the corner of Gulf Stream and one of the main avenues running down there for about 20 years. Just last year the house behind her sold for some gawd awful amount of money, like 900k, and they tore it down and rebuilt with a three story, probably around 4k square foot house. Again, someone's second home. I met the people, nice enough, but geeze uz.
The last year and the beginning of this 'season' have been overwhelmingly busy. The people come earlier in the year and stay longer. It costs a lot of money to live down there. A plate of spaghetti and meatballs at any 'decent' restaurant is around 18 bucks. A good steak, like a 14 ounce NY Strip runs anywhere from about 38 bucks and cheap places to, get this, 94 dollars at preston's...I can't even imagine why 'rich' people would go there.
But, back to those houses, the people must just build them realizing they can get wiped out and self insure? Bentleys, Mazeratis, Ferraris and Porches are as plentiful as Hondas. It's fucked, I tell you. The rich are getting MUCH richer and the poor, well, they can clean my bathroom. I mean, that's the attitude.
None of this matters.
What matters is that China, where everything is made is going to stop increasing it's foreign exchange reserves. This means all that "Made in China" stuff will start increase in price more rapidly.
I'm sure, as inflation breaks beyond hideable limits, and societal breakdown increases, the super rich will put their money into bitcoin, not gold, as they see the utility of a cyber currency in the face of chaos.
Heh.