<< <i>I checked coinflation.com today and 40% half dollars were $3.30 and 90% havles were 8.07. >>
So, in other words, prices for those are down 50% in the past 2 years, and are exactly the same as they were 34 years ago? >>
Pick the year that tells your story best.
I'll pick 1963-64; that makes them over 400% on the inflated side.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
What is the inflation rate on a simple 4-function electronic calculator that's now less than $5 (if not free)?
The tube technology of the ANITA was superseded in June 1963 by the U.S. manufactured Friden EC-130, which had an all-transistor design, a stack of four 13-digit numbers displayed on a 5-inch (13 cm) CRT, and introduced reverse Polish notation (RPN) to the calculator market for a price of $2200, which was about three times the cost of an electromechanical calculator of the time. Like Bell Punch, Friden was a manufacturer of mechanical calculators that had decided that the future lay in electronics. In 1964 more all-transistor electronic calculators were introduced: Sharp introduced the CS-10A, which weighed 25 kg (55 lb) and cost 500,000 yen (~US$2500), and Industria Macchine Elettroniche of Italy introduced the IME 84, to which several extra keyboard and display units could be connected so that several people could make use of it (but apparently not at the same time).
Monetary (money supply) inflation does not affect everything equally, and to the extent that it does, of course the timeframe matters.
I see supply and demand driven price changes in all these things in both directions, and a relatively very flat overall inflation rate both past and future
We can "predict" hyperinflation all we want, isn't that a lot of fun? But we won't be getting ACTUAL hyperinflation untill ALL prices rise very far very fast. Those who say, "it ain't happening" will be right all the way up until they're not (if ever) in the meantime the doom and gloom predictors are still waiting...
we will see a new currency system before we ever see hyperinflation. We will continue to suffer a slow, FED induced inflation until then.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>we will see a new currency system before we ever see hyperinflation. We will continue to suffer a slow, FED induced inflation until then. >>
I do not think any of us will live to see "a new currency system". And we will continue to *enjoy* a slow, FED induced inflation the rest of our lives.
<< <i>we will see a new currency system before we ever see hyperinflation. We will continue to suffer a slow, FED induced inflation until then. >>
<< <i>I do not think any of us will live to see "a new currency system". And we will continue to *enjoy* a slow, FED induced inflation the rest of our lives. >>
The problem with your statements is that you appear to think that the fed will always be in control. What has happened with every historical hyperinflation scenario is that things were relatively OK until they lost control. You can only manipulate the markets and the currency for so long until the free market takes over and determines the real value of the currency. And this happens in a hurry. This will probably be sparked by some big event... a natural disaster, war, debt default, who knows? Our economy is in a precarious position at the moment and there are no bullets left.
I'm not saying anything is going to happen or is going to happen soon, but to say with certainty that nothing will happen to cause the fed to lose control is being irrationally optimistic.
Deflation/dis-inflation is an effect of the baby boom generation retiring.
It will last for many years, possibly 20 years. Everyone expects higher inflation and higher interest rates. Not going to happen. Rates have actually declined from the depths of the financial crisis in late 2009 - early 2009.
Check your own savings accounts for verification of this.
<< <i>Before I make a mis-statement...how many of you actually do the family's grocery shopping? I do. It's easy to tell when the tab goes up a hundred. >>
Yup. And if you don't want gmo or corn syrup it's another slice on top for the free range organic action
<< <i>Rates have actually declined from the depths of the financial crisis in late 2009 - early 2009. >>
But somehow producers and retailers see the need to increase prices or reduce portions to offset income loss. Has a lot to do with declining sales that have resulted from a rapid slowdown in money velocity.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Back 1,500 - 2,000 years ago ALIENS came here to mine the gold on the Earth. The Bigfoot's were bred as slaves and used to mine the gold. When the easy gold ran out the ALIENS left and some of the Bigfoot's escaped into the wild where they lived and bred. This is why they are so elusive,,,,,,,, they don't want to be recaptured and made into slaves again. Word is the ALIENS will come back by the end of the year to confiscate all the gold currently on Earth so you better hide your stash. What they don't get will really be worth a lot
This is actually a theory I saw on the History channel awhile back. (Well my son saw it and told me about it)
Must be nice to live in fairy-tale land where you can take a narrow view of anything to convince yourself that a particular case is true. Try looking at real estate since 2010 or gold & silver since 2004 and the conversation flips. Just keep ignoring the plethora of things that have increased in price that I won't go into here because this topic has been exhausted in other threads, and focus on things that naturally decrease in price over time (i.e. electronics & technology) and convince yourself that your household budget is going further than it ever has.
If someone's income growth and investment returns doesn't at least keep up with inflation, they should look at how they've spent their time and life energy, and the decisions they've made, and their interactions with other people in their lives, and not try to blame some remote Entity (God, the Government, the trilateral commission, etc. ) for their quality of life. Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors.
true Hyperinflation is unmistakable... we wouldn't be debating if we're "there yet", it would be really, really obvious.
<< <i>Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors. >>
Slow, "regular" inflation is not healthy economic evolution. It is a stealth method of devaluation. In a healthy economy, consumers should not have to change budgets and adapt to slow changes in price. It is this "slow" inflation that required mothers and wives to enter the workforce out of necessity and required further indebtedness. When that no longer satisfied the need for more income, borrowing and second mortgages became the norm to maintain an accustomed lifestyle. The fact that it has slowly taken place is no more acceptable than if it were sudden. Those that accept "slow" inflation have been conditioned to do so. It doesn't have to be sudden to be classified as hyperinflation. If one were to look at the cumulative "slow" inflation, one would be justified to label the sum as hyperinflation. A "slow" death still results in being dead.
In a last ditch effort, earned income is being replaced with unearned income at the expense of those still able to earn. The spiraling down of this affect will not be pretty once the non-earners need more than the remaining earners are willing to or able to provide.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors.
We can document the massive debt creation because it is public record, and we can also document inflation even though "the government" keeps changing the rules. We can document purchasing power. Even though "the government" can ignore food costs and energy costs in the calculations, I don't know anyone else who can.
Businesses must pass along their cost increases in order to survive, and you are engaging in fantasy if you don't believe that increased costs in government spending aren't being passed along directly to consumers/taxpayers.
And la piece de resistance - it's impossible to add 30 million new people to a health care system without increasing costs proportionately to the actual payees, just as it's impossible to create jobs and wealth by increasing the money supply and handing it out to political cronies on the first pass.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors. >>
Slow, "regular" inflation is not healthy economic evolution. It is a stealth method of devaluation. In a healthy economy, consumers should not have to change budgets and adapt to slow changes in price. It is this "slow" inflation that required mothers and wives to enter the workforce out of necessity and required further indebtedness. When that no longer satisfied the need for more income, borrowing and second mortgages became the norm to maintain an accustomed lifestyle. The fact that it has slowly taken place is no more acceptable than if it were sudden. Those that accept "slow" inflation have been conditioned to do so. It doesn't have to be sudden to be classified as hyperinflation. If one were to look at the cumulative "slow" inflation, one would be justified to label the sum as hyperinflation. A "slow" death still results in being dead. >>
Agree. I think we're in for more stagflation.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
"For the first time in history, ALL the major central banks are printing money. One of two things will occur. If they continue to print, their respective currencies will lose their purchasing power, and we'll have inflation or even hyper-inflation. If the central banks pull back on their printing, we'll have crashing markets and a world depression." - Richard Russell
If not already done, place your bets. I'm betting central banks do not want crashing markets and a world depression. Their actions up until now make this a no-brainer.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It's not hyper. It's a "stress test". A lot of people weren't listening to Bernanke. We just use the wrong terminology and interpret "social ills" differently. Managing money is no different than managing debt. They're the same thing. We make it, we spend it, we work for more and pay more out.
<< <i>If not already done, place your bets. I'm betting central banks do not want crashing markets and a world depression. Their actions up until now make this a no-brainer. >>
Central banks, at least here in the US, have no choice. Congress' out of control spending dictates that the printing continue in an ever-increasing fashion. Do you think the fed can say no to demands or requirements for more printing?
Looking at my predictions here at the CU-PM over the past five years has taught me one thing, stick to flying.
If someone told us back in March of 2009 to guess the Market averages and PM's in 2013 and the only info divulged was $17 trillion in debt what would we have guessed?
I look at where those numbers are now and three words come to mind, smoke and mirrors.
Fortunately we have just the actors in place to accomplish the mission.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Until money velocity drastically increases we will not see drastic price inflation. Getting the money flowing is a top priority but appears to be too much of a challenge for the FED. You can give 'em money but you can't make 'em spend it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>For hyperinflation to occur, the general public has to perceive a problem. Some people don't get smart until it's too late, some never do. >>
How true.....
Not to get off topic, but it does add credance to the above statement......
I heard recently on a radio show that 35% of the people of the USA still believe the world was created in 7 days.
With that kind of thinking, it looks like hyperinflation will arrive.
(just to add....I'm not an atheist, but I don't buy into the 7 day world creation...and to the moderator, this is my first and it'll be my last post touching on the subject of religion)
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
<< <i>Gold price tells you there is no hyper or even modest inflation on the horizon. >>
<< <i>For hyperinflation to occur, the general public has to perceive a problem. Some people don't get smart until it's too late, some never do. >>
The POG is not and never will be a forward-looking indicator for inflation or deflation in the future. HI starts literally overnight, like a switch, when some entity detects a problem and acts on it all at once. Panic ensues, and it escalates. If you think you'll have a warning before HI kicks in you are mistaken.
<< <i>You can give 'em money but you can't make 'em spend it. >>
No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power.
<< <i>You can give 'em money but you can't make 'em spend it. >>
<< <i>No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power. >>
FED is giving an incentive to spend money you don't even have - zero percent interest rate policy. It's not working. A rapidly growing inflation rate is an incentive to spend, but the FED will fight rising interest rates with every tool it has. Hyperinflation is strictly a political event driven by fear, feeds off of itself and will only be possible when FED loses complete control of the markets. As long as the FED controls the money supply it will not lose control of the markets. As long as inflation is within acceptable FED limits it will continue pumping money. You can't get a wheelbarrow of dollars for a loaf of bread if the load of dollars is not available to your customer to spend. Generally speaking the FED loads or unloads the wheelbarrow. Recent rises in interst rates indicates the FED is hoping to drive the fear that creates the spending you speak of. Lack of velocity of money is keeping price inflation in check. If people aren't buying at current prices it makes no business sense to raise prices. Prices on necessities however will continue to inch upward as consumers have no choice in consuming.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
You can give 'em money but you can't make 'em spend it. >>
<< No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power. >>
People have the choice to INVEST it instead of "spending" (consuming) the money that is presumably flowing in from a person's job or gift checks. Precious metals are one of the nearly infinite assets that one can invest in, that have a chance of preserving (or increasing) purchasing power. Stocks, real estate, small businesses, bonds, and all the fancy futures and options bets upon you-name-it trend or price outcome in other things... the dreaded "derivatives"
but if one wants to stick with tangible hard assets, there are many, collectibles, antiques, art, firearms, or how about a few cases of Jack or Stoli? (or Maker's Mark and Grey Goose, if you prefer), if there's going to be "wheelbarrow" type Hyperinflation, the finest booze, smokes, pills, batteries, etc. (as storable consumer goods) and durable goods, and useful tools and raw materials will also cost bales of paper and possibly be in far higher local demand than PMs... and more useful if you're planning on "staying put" when the SHTF...
"An ASE? no thanks.. that Kruggerand? can't break it, man! good luck!" The PMs will be the compact way to move the hell out of the Hyperinflation zone with passage tickets and border bribes, rather than be trying to cash back out of a truckload of metal by barter for more consumables.
This fake concept of "Either save as [depreciating] federal reserve dollars, buy gold, or spend (waste) the money" , as if those were the only 3 choices, is flawed reasoning. Often this kind of illogical conclusion is reached by bloggers on sites that, ironically, want to sell you some of their or their advertisers' gold
This fake concept of "Either save as [depreciating] federal reserve dollars, buy gold, or spend (waste) the money" , as if those were the only 3 choices, is flawed reasoning. Often this kind of illogical conclusion is reached by bloggers on sites that, ironically, want to sell you some of their or their advertisers' gold
The idea of buying into viable companies has always been a reasonable way to invest. Until Lehman, Fannie, Freddie, GE Capital, AIG et al, so were bonds and real estate. Yeah, there's always been manipulation and corruption to some extent but if you don't realize the absoluteness and pervasiveness of it now, you are in real trouble - in my opinion.
We might cruise along indefinitely just fine, that is certainly possible. My take on things is that when tptb run into real problems on their end, there will simply be no mercy accorded to us mere humans. We simply don't get to know when their gig will be up. Could be tomorrow.
Does that mean hunker down and await the end of the world? Better to live now while you can, of course. The other point is that not too many folks really plan to uproot themselves and run for any borders. The US is about as good as it gets for a homegrown native anyhow. Why subject yourself to culture shock and a bunch of real unknowns? Stay and deal with the realities, but have some alternative resources that aren't just paper or electronic based.
As history has proven time and again, precious metals are always helpful to some degree. So are dollars in some amount. So are other tangibles. There's nothing faulty with that logic.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>FED is giving an incentive to spend money you don't even have - zero percent interest rate policy. It's not working. A rapidly growing inflation rate is an incentive to spend, but the FED will fight rising interest rates with every tool it has. Hyperinflation is strictly a political event driven by fear, feeds off of itself and will only be possible when FED loses complete control of the markets. As long as the FED controls the money supply it will not lose control of the markets. As long as inflation is within acceptable FED limits it will continue pumping money. You can't get a wheelbarrow of dollars for a loaf of bread if the load of dollars is not available to your customer to spend. Generally speaking the FED loads or unloads the wheelbarrow. Recent rises in interst rates indicates the FED is hoping to drive the fear that creates the spending you speak of. Lack of velocity of money is keeping price inflation in check. If people aren't buying at current prices it makes no business sense to raise prices. Prices on necessities however will continue to inch upward as consumers have no choice in consuming. >>
I wouldn't say that ZIRP is a reason to spend, but it's a reason not to save, which is not necessarily the same thing. Serious, real inflation is a reason to spend... and that doesn't mean on frivolous things. Smart people would buy real assets with the money (real estate, metals, etc). ZIRP is perhaps a reason to spend for people who don't have money, as loan interest rates are low to buy consumer goods, cars, real estate, estate. Although I would argue those people use the low interest rates to buy sooner or buy more (or new vs used) than they would have otherwise, I'm not sure the low interest rates compel a lot of additional spending that wouldn't have otherwise occurred in terms of number of transactions. But people who buy things with cash aren't typically compelled to spend by low interest rates.
Recall during the housing boom that even though the inflation was pretty much limited to just housing, many people bought houses that wouldn't have otherwise because they feared that if they waited their dollars would no longer buy the house they wanted. Imagine that scenario for almost everything.
cheap money is always an excuse to spend, especially to those looking for an excuse. Actually, buying a new car at near zero percent interest works out cheaper than saving three years for it when you look at the future value of money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I think the Debt Ceiling fiasco will raise inflation more than anything else (QE1, QE2, twist or QE3). Just by talking about breaching the limit, it causes fear and uncertianty.
Hyperinflation is not caused by printing too much money. It is caused by fear that the money in hand will not be of value in the near future. This fear grows and feeds on itself until all trust is gone. Governments faced with hyperinflation print higher and higher denominations as a result of the escalating fear.
The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money.
it's claimed that those numbers are faked by "them" and that folks are really experiencing price inflation, really, they see it at the grocery store and gas station.
However, a loaf of bread or gallon of gasoline or milk are still under $5 even at their most "convenient" corner store. No "hyperinflation" until these at least double from here. (oh, but when they were a kid 30 or 40 years ago, they were under a dollar!) to which it appears, maybe they'll be $10 in 2023 and $20 in 2033. It sure doesn't look hyper next year or the year after that..
Maybe the optional upgraded goods they're buying are experiencing price changes based on supply and demand, which is largely caused by A. higher quality and/or B seasonality, or C. advertising or D. [specific circumstances]
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Does the chart above include energy and housing? What was the price of a loaded Cadillac in 89 vs today? And how much higher would it be today if GM hadn't sourced production to cheaper markets. The move of production to cheaper market has provided a one-time cost savings effect that has counter-acted inflationary forces over the past 20 years. But now that goose is cooked, and manufacturing prices must now rise because all of the savings has been realized and manufacturing costs are no longer decreasing. It's been easy being the CEO the last 20 years because all you do is outsource your production which slashes your expenses and your balance sheet looks great. Now CEOs are going to have to learn how to really run a company again.
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Look at the chart again and then remember the other great move by the FED to save the banks, I mean the economy: Zero Interest Rate Policy, right before inflation dropped to negative 2%. Central banks are responsible for inflation levels as long as central banks are in control. The only control govs have over inflation is Treasury Dept. manipulation of interest rates in concert with the FED.
Central banks print for bailouts and for an out of control congress that has no financial restraint on it's spending. While we continue to print just to pay the interest on the debt, take a guess on how much the US taxpayer now owes the FED among others. As always its about debt, it is what bankers produce.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Does the chart above include energy and housing? What was the price of a loaded Cadillac in 89 vs today? And how much higher would it be today if GM hadn't sourced production to cheaper markets. The move of production to cheaper market has provided a one-time cost savings effect that has counter-acted inflationary forces over the past 20 years. But now that goose is cooked, and manufacturing prices must now rise because all of the savings has been realized and manufacturing costs are no longer decreasing. It's been easy being the CEO the last 20 years because all you do is outsource your production which slashes your expenses and your balance sheet looks great. Now CEOs are going to have to learn how to really run a company again. >>
I bought an entry level Mercedes in 1996, a C280 for $36,000. That same car costs the same today, and has more creature comforts, safety features and better fuel economy.
Products used to say "Made in Japan", then "Made in China", now more "Made in Malaysia", and soon "Made in India", then "Made in Ethiopia or Tanzania". There is plenty of cheap labor to be exploited.
I do a lot of the grocery shopping. Yesterday was the first time I decided not to buy Velveeta Shells & Cheese because the price of one box has jumped from its typical range of $1.00 all the way up to $2.50.
Blueberry syrup has gone up just now from $2.14 to $2.34. A dinky little 6 oz. clamshell of blueberries is now $3.98, so I didn't buy them, hoping to get a better buy at Sam's Club today.
Non hormone milk is still at $3.58/ half gallon, and that's the least expensive one. The smaller bag of frozen veggies is now 10.8 oz instead of 12 oz at $1.00 a bag.
I see some new price increases for food in the mix. Regular gasoline is $2.99/gal. the last I looked - at least it's down for now.
I still don't get how food and gas aren't part of the core inflation calculations.
I bought an entry level Mercedes in 1996, a C280 for $36,000. That same car costs the same today, and has more creature comforts, safety features and better fuel economy.
Products used to say "Made in Japan", then "Made in China", now more "Made in Malaysia", and soon "Made in India", then "Made in Ethiopia or Tanzania". There is plenty of cheap labor to be exploited.
That's Bernanke's contention about inflation. As long as those places remain on the petrodollar standard, the model works. When those countries make bilateral trade agreements in something other than the dollar, prices will take a significant hike.
China is cashing in Treasuries and spending their development yuans to buy resource producers and to cement business ties in those markets. By contrast, we are spending our dollars subsidizing military hardware giveaways to places like Egypt and Pakistan, for what? Frankly, we waste a whole lot of money on bad ideas, and this tendency is going to bite us.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>I'm all in for replacing pineapples with jmski52's brand of Mac and Cheese. >>
Hmmm, two-fitty for V's Mac-n-cheese and pineapples at $3.44 per? Unless comrade j's Mac-n-cheese can be blended and poured in a glass with an umbrella...I'll stick wit da pineapple. Darn things should be next to free.
<< <i>Why should pineapples be "next to free", in your view? Do they plant, tend, harvest, and ship themselves to the store? >>
When I lived in Colorado I could get one for $2. On Oahu, $3.44. Transportation costs to Colorado vice 20 miles on an Island seems self evident. So yeah I would think they'd be next to free or at least under $2.
"China’s central bank, the People’s Bank of China (PBOC), ties the yuan’s value closely to the US dollar. To do so it must buy dollars that come into the country from exporters and foreign investors when China exports more to the US than it imports, and when more investment is flowing into China than is flowing out. Those dollars go into the PBOC’s reserves. In order to make some return on them, it invests them in US government debt, the only market big and liquid enough for the size of its purchases."
This will change once China ties its currency to the gold it is hoarding. Don't think for a minute the Chinese desire to keep the value of their currency dependent on what they clearly see as a failing currency and they will not continue to invest in US government debt when it is no longer a wise investment. The yuan will be backed by gold and there is a good chance it will take world reserve currency status.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
There is also growing pressure in China from the public to divest the US debt holdings. All of the citizens are asking their officials why they own so much US debt when they are reading the same headlines we are.
Comments
<< <i>
<< <i>I checked coinflation.com today and 40% half dollars were $3.30 and 90% havles were 8.07. >>
So, in other words, prices for those are down 50% in the past 2 years, and are exactly the same as they were 34 years ago?
Pick the year that tells your story best.
I'll pick 1963-64; that makes them over 400% on the inflated side.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
What is the inflation rate on a share of IBM
What is the inflation rate on a simple 4-function electronic calculator that's now less than $5 (if not free)?
The tube technology of the ANITA was superseded in June 1963 by the U.S. manufactured Friden EC-130, which had an all-transistor design, a stack of four 13-digit numbers displayed on a 5-inch (13 cm) CRT, and introduced reverse Polish notation (RPN) to the calculator market for a price of $2200, which was about three times the cost of an electromechanical calculator of the time. Like Bell Punch, Friden was a manufacturer of mechanical calculators that had decided that the future lay in electronics. In 1964 more all-transistor electronic calculators were introduced: Sharp introduced the CS-10A, which weighed 25 kg (55 lb) and cost 500,000 yen (~US$2500), and Industria Macchine Elettroniche of Italy introduced the IME 84, to which several extra keyboard and display units could be connected so that several people could make use of it (but apparently not at the same time).
Monetary (money supply) inflation does not affect everything equally, and to the extent that it does, of course the timeframe matters.
I see supply and demand driven price changes in all these things in both directions, and a relatively very flat overall inflation rate both past and future
We can "predict" hyperinflation all we want, isn't that a lot of fun? But we won't be getting ACTUAL hyperinflation untill ALL prices rise very far very fast. Those who say, "it ain't happening" will be right all the way up until they're not (if ever) in the meantime the doom and gloom predictors are still waiting...
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>we will see a new currency system before we ever see hyperinflation. We will continue to suffer a slow, FED induced inflation until then. >>
I do not think any of us will live to see "a new currency system". And we will continue to *enjoy* a slow, FED induced inflation the rest of our lives.
plan accordingly
Liberty: Parent of Science & Industry
<< <i>we will see a new currency system before we ever see hyperinflation. We will continue to suffer a slow, FED induced inflation until then. >>
<< <i>I do not think any of us will live to see "a new currency system". And we will continue to *enjoy* a slow, FED induced inflation the rest of our lives. >>
The problem with your statements is that you appear to think that the fed will always be in control. What has happened with every historical hyperinflation scenario is that things were relatively OK until they lost control. You can only manipulate the markets and the currency for so long until the free market takes over and determines the real value of the currency. And this happens in a hurry. This will probably be sparked by some big event... a natural disaster, war, debt default, who knows? Our economy is in a precarious position at the moment and there are no bullets left.
I'm not saying anything is going to happen or is going to happen soon, but to say with certainty that nothing will happen to cause the fed to lose control is being irrationally optimistic.
It will last for many years, possibly 20 years. Everyone expects higher inflation and
higher interest rates. Not going to happen. Rates have actually declined from the
depths of the financial crisis in late 2009 - early 2009.
Check your own savings accounts for verification of this.
Trillions in QE (debt monetization and bond purchases) may have had something to do with low rates.
I knew it would happen.
I do.
It's easy to tell when the tab goes up a hundred.
<< <i>Before I make a mis-statement...how many of you actually do the family's grocery shopping?
I do.
It's easy to tell when the tab goes up a hundred. >>
Yup. And if you don't want gmo or corn syrup it's another slice on top for the free range organic action
<< <i>Rates have actually declined from the depths of the financial crisis in late 2009 - early 2009. >>
But somehow producers and retailers see the need to increase prices or reduce portions to offset income loss. Has a lot to do with declining sales that have resulted from a rapid slowdown in money velocity.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Coke has been very stable in price for years. I do the shopping.
Meanwhile, things like TVs and computers have really fallen.
Look at real estate too. You can buy a lot of Rice Krispies with
the amount you save buying a house today vs. 2007.
Very little observed inflation since 2008.
Gold and silver prices show that there is little expectation of much inflation.
This is actually a theory I saw on the History channel awhile back. (Well my son saw it and told me about it)
GrandAm
true Hyperinflation is unmistakable... we wouldn't be debating if we're "there yet", it would be really, really obvious.
Liberty: Parent of Science & Industry
<< <i>Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors. >>
Slow, "regular" inflation is not healthy economic evolution. It is a stealth method of devaluation. In a healthy economy, consumers should not have to change budgets and adapt to slow changes in price. It is this "slow" inflation that required mothers and wives to enter the workforce out of necessity and required further indebtedness. When that no longer satisfied the need for more income, borrowing and second mortgages became the norm to maintain an accustomed lifestyle. The fact that it has slowly taken place is no more acceptable than if it were sudden. Those that accept "slow" inflation have been conditioned to do so. It doesn't have to be sudden to be classified as hyperinflation. If one were to look at the cumulative "slow" inflation, one would be justified to label the sum as hyperinflation. A "slow" death still results in being dead.
In a last ditch effort, earned income is being replaced with unearned income at the expense of those still able to earn. The spiraling down of this affect will not be pretty once the non-earners need more than the remaining earners are willing to or able to provide.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
We can document the massive debt creation because it is public record, and we can also document inflation even though "the government" keeps changing the rules. We can document purchasing power. Even though "the government" can ignore food costs and energy costs in the calculations, I don't know anyone else who can.
Businesses must pass along their cost increases in order to survive, and you are engaging in fantasy if you don't believe that increased costs in government spending aren't being passed along directly to consumers/taxpayers.
And la piece de resistance - it's impossible to add 30 million new people to a health care system without increasing costs proportionately to the actual payees, just as it's impossible to create jobs and wealth by increasing the money supply and handing it out to political cronies on the first pass.
I knew it would happen.
<< <i>
<< <i>Slowly changing household budgets and slow changes in the price, quality, and selection of goods and services are not "hyperinflation", they're regular inflation that accompanies healthy economic evolution, even with small and large "punctuated equilibrium" events that select against certain inherent characteristics, behavior patterns, locations, and economic sectors. >>
Slow, "regular" inflation is not healthy economic evolution. It is a stealth method of devaluation. In a healthy economy, consumers should not have to change budgets and adapt to slow changes in price. It is this "slow" inflation that required mothers and wives to enter the workforce out of necessity and required further indebtedness. When that no longer satisfied the need for more income, borrowing and second mortgages became the norm to maintain an accustomed lifestyle. The fact that it has slowly taken place is no more acceptable than if it were sudden. Those that accept "slow" inflation have been conditioned to do so. It doesn't have to be sudden to be classified as hyperinflation. If one were to look at the cumulative "slow" inflation, one would be justified to label the sum as hyperinflation. A "slow" death still results in being dead. >>
Agree. I think we're in for more stagflation.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
If not already done, place your bets. I'm betting central banks do not want crashing markets and a world depression. Their actions up until now make this a no-brainer.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Managing money is no different than managing debt. They're the same thing. We make it, we spend it, we work for more and pay more out.
<< <i>If not already done, place your bets. I'm betting central banks do not want crashing markets and a world depression. Their actions up until now make this a no-brainer. >>
Central banks, at least here in the US, have no choice. Congress' out of control spending dictates that the printing continue in an ever-increasing fashion. Do you think the fed can say no to demands or requirements for more printing?
If someone told us back in March of 2009 to guess the Market averages and PM's in 2013 and the only info divulged was $17 trillion in debt what would we have guessed?
I look at where those numbers are now and three words come to mind, smoke and mirrors.
Fortunately we have just the actors in place to accomplish the mission.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I knew it would happen.
The die is being cast now as to how much of this mess translates to less services, sharply higher taxes, and soaring inflation.
We'll have all three and my money is largely on inflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If anything, we are looking at deflation.
<< <i>For hyperinflation to occur, the general public has to perceive a problem. Some people don't get smart until it's too late, some never do. >>
How true.....
Not to get off topic, but it does add credance to the above statement......
I heard recently on a radio show that 35% of the people of the USA still believe the world was created in 7 days.
With that kind of thinking, it looks like hyperinflation will arrive.
(just to add....I'm not an atheist, but I don't buy into the 7 day world creation...and to the moderator, this is my first and it'll be my last post touching on the subject of religion)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>Gold price tells you there is no hyper or even modest inflation on the horizon. >>
<< <i>For hyperinflation to occur, the general public has to perceive a problem. Some people don't get smart until it's too late, some never do. >>
The POG is not and never will be a forward-looking indicator for inflation or deflation in the future. HI starts literally overnight, like a switch, when some entity detects a problem and acts on it all at once. Panic ensues, and it escalates. If you think you'll have a warning before HI kicks in you are mistaken.
<< <i>You can give 'em money but you can't make 'em spend it. >>
No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power.
<< <i>You can give 'em money but you can't make 'em spend it. >>
<< <i>No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power. >>
FED is giving an incentive to spend money you don't even have - zero percent interest rate policy. It's not working. A rapidly growing inflation rate is an incentive to spend, but the FED will fight rising interest rates with every tool it has. Hyperinflation is strictly a political event driven by fear, feeds off of itself and will only be possible when FED loses complete control of the markets. As long as the FED controls the money supply it will not lose control of the markets. As long as inflation is within acceptable FED limits it will continue pumping money. You can't get a wheelbarrow of dollars for a loaf of bread if the load of dollars is not available to your customer to spend. Generally speaking the FED loads or unloads the wheelbarrow. Recent rises in interst rates indicates the FED is hoping to drive the fear that creates the spending you speak of. Lack of velocity of money is keeping price inflation in check. If people aren't buying at current prices it makes no business sense to raise prices. Prices on necessities however will continue to inch upward as consumers have no choice in consuming.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< No, but you can give them a lot of incentive to. How quickly would you spend or convert your savings if you knew it would be worth 5%, 10%, 15%, 25% less (or worse) next year? So technically no one would be forcing you to spend your money, but you have no choice if you want to retain your spending power. >>
People have the choice to INVEST it instead of "spending" (consuming) the money that is presumably flowing in from a person's job or gift checks. Precious metals are one of the nearly infinite assets that one can invest in, that have a chance of preserving (or increasing) purchasing power. Stocks, real estate, small businesses, bonds, and all the fancy futures and options bets upon you-name-it trend or price outcome in other things... the dreaded "derivatives"
but if one wants to stick with tangible hard assets, there are many, collectibles, antiques, art, firearms, or how about a few cases of Jack or Stoli? (or Maker's Mark and Grey Goose, if you prefer), if there's going to be "wheelbarrow" type Hyperinflation, the finest booze, smokes, pills, batteries, etc. (as storable consumer goods) and durable goods, and useful tools and raw materials will also cost bales of paper and possibly be in far higher local demand than PMs... and more useful if you're planning on "staying put" when the SHTF...
"An ASE? no thanks.. that Kruggerand? can't break it, man! good luck!" The PMs will be the compact way to move the hell out of the Hyperinflation zone with passage tickets and border bribes, rather than be trying to cash back out of a truckload of metal by barter for more consumables.
This fake concept of "Either save as [depreciating] federal reserve dollars, buy gold, or spend (waste) the money" , as if those were the only 3 choices, is flawed reasoning. Often this kind of illogical conclusion is reached by bloggers on sites that, ironically, want to sell you some of their or their advertisers' gold
Liberty: Parent of Science & Industry
The idea of buying into viable companies has always been a reasonable way to invest. Until Lehman, Fannie, Freddie, GE Capital, AIG et al, so were bonds and real estate. Yeah, there's always been manipulation and corruption to some extent but if you don't realize the absoluteness and pervasiveness of it now, you are in real trouble - in my opinion.
We might cruise along indefinitely just fine, that is certainly possible. My take on things is that when tptb run into real problems on their end, there will simply be no mercy accorded to us mere humans. We simply don't get to know when their gig will be up. Could be tomorrow.
Does that mean hunker down and await the end of the world? Better to live now while you can, of course. The other point is that not too many folks really plan to uproot themselves and run for any borders. The US is about as good as it gets for a homegrown native anyhow. Why subject yourself to culture shock and a bunch of real unknowns? Stay and deal with the realities, but have some alternative resources that aren't just paper or electronic based.
As history has proven time and again, precious metals are always helpful to some degree. So are dollars in some amount. So are other tangibles. There's nothing faulty with that logic.
I knew it would happen.
<< <i>FED is giving an incentive to spend money you don't even have - zero percent interest rate policy. It's not working. A rapidly growing inflation rate is an incentive to spend, but the FED will fight rising interest rates with every tool it has. Hyperinflation is strictly a political event driven by fear, feeds off of itself and will only be possible when FED loses complete control of the markets. As long as the FED controls the money supply it will not lose control of the markets. As long as inflation is within acceptable FED limits it will continue pumping money. You can't get a wheelbarrow of dollars for a loaf of bread if the load of dollars is not available to your customer to spend. Generally speaking the FED loads or unloads the wheelbarrow. Recent rises in interst rates indicates the FED is hoping to drive the fear that creates the spending you speak of. Lack of velocity of money is keeping price inflation in check. If people aren't buying at current prices it makes no business sense to raise prices. Prices on necessities however will continue to inch upward as consumers have no choice in consuming. >>
I wouldn't say that ZIRP is a reason to spend, but it's a reason not to save, which is not necessarily the same thing. Serious, real inflation is a reason to spend... and that doesn't mean on frivolous things. Smart people would buy real assets with the money (real estate, metals, etc).
ZIRP is perhaps a reason to spend for people who don't have money, as loan interest rates are low to buy consumer goods, cars, real estate, estate. Although I would argue those people use the low interest rates to buy sooner or buy more (or new vs used) than they would have otherwise, I'm not sure the low interest rates compel a lot of additional spending that wouldn't have otherwise occurred in terms of number of transactions. But people who buy things with cash aren't typically compelled to spend by low interest rates.
Recall during the housing boom that even though the inflation was pretty much limited to just housing, many people bought houses that wouldn't have otherwise because they feared that if they waited their dollars would no longer buy the house they wanted. Imagine that scenario for almost everything.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Linked from here.
I think the Debt Ceiling fiasco will raise inflation more than anything else (QE1, QE2, twist or QE3). Just by talking about breaching the limit, it causes fear and uncertianty.
Hyperinflation is not caused by printing too much money. It is caused by fear that the money in hand will not be of value in the near future. This fear grows and feeds on itself until all trust is gone. Governments faced with hyperinflation print higher and higher denominations as a result of the escalating fear.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money.
Knowledge is the enemy of fear
However, a loaf of bread or gallon of gasoline or milk are still under $5 even at their most "convenient" corner store. No "hyperinflation" until these at least double from here.
(oh, but when they were a kid 30 or 40 years ago, they were under a dollar!) to which it appears, maybe they'll be $10 in 2023 and $20 in 2033. It sure doesn't look hyper next year or the year after that..
Maybe the optional upgraded goods they're buying are experiencing price changes based on supply and demand, which is largely caused by A. higher quality and/or B seasonality, or C. advertising or
D. [specific circumstances]
Liberty: Parent of Science & Industry
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Does the chart above include energy and housing?
What was the price of a loaded Cadillac in 89 vs today? And how much higher would it be today if GM hadn't sourced production to cheaper markets. The move of production to cheaper market has provided a one-time cost savings effect that has counter-acted inflationary forces over the past 20 years. But now that goose is cooked, and manufacturing prices must now rise because all of the savings has been realized and manufacturing costs are no longer decreasing. It's been easy being the CEO the last 20 years because all you do is outsource your production which slashes your expenses and your balance sheet looks great. Now CEOs are going to have to learn how to really run a company again.
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Look at the chart again and then remember the other great move by the FED to save the banks, I mean the economy: Zero Interest Rate Policy, right before inflation dropped to negative 2%. Central banks are responsible for inflation levels as long as central banks are in control. The only control govs have over inflation is Treasury Dept. manipulation of interest rates in concert with the FED.
Central banks print for bailouts and for an out of control congress that has no financial restraint on it's spending. While we continue to print just to pay the interest on the debt, take a guess on how much the US taxpayer now owes the FED among others. As always its about debt, it is what bankers produce.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>The chart above shows that average inflation rate is near the lowest levels of the last 20 years even with QE and money printing. Kinda proves that money printing in and of itself does not create inflation.
Governments create inflation through minimum wages and price controls. Central banks only print to accommodate this increased demand for money. >>
Does the chart above include energy and housing?
What was the price of a loaded Cadillac in 89 vs today? And how much higher would it be today if GM hadn't sourced production to cheaper markets. The move of production to cheaper market has provided a one-time cost savings effect that has counter-acted inflationary forces over the past 20 years. But now that goose is cooked, and manufacturing prices must now rise because all of the savings has been realized and manufacturing costs are no longer decreasing. It's been easy being the CEO the last 20 years because all you do is outsource your production which slashes your expenses and your balance sheet looks great. Now CEOs are going to have to learn how to really run a company again. >>
I bought an entry level Mercedes in 1996, a C280 for $36,000. That same car costs the same today, and has more creature comforts, safety features and better fuel economy.
Products used to say "Made in Japan", then "Made in China", now more "Made in Malaysia", and soon "Made in India", then "Made in Ethiopia or Tanzania". There is plenty of cheap labor to be exploited.
Knowledge is the enemy of fear
Blueberry syrup has gone up just now from $2.14 to $2.34. A dinky little 6 oz. clamshell of blueberries is now $3.98, so I didn't buy them, hoping to get a better buy at Sam's Club today.
Non hormone milk is still at $3.58/ half gallon, and that's the least expensive one. The smaller bag of frozen veggies is now 10.8 oz instead of 12 oz at $1.00 a bag.
I see some new price increases for food in the mix. Regular gasoline is $2.99/gal. the last I looked - at least it's down for now.
I still don't get how food and gas aren't part of the core inflation calculations.
I bought an entry level Mercedes in 1996, a C280 for $36,000. That same car costs the same today, and has more creature comforts, safety features and better fuel economy.
Products used to say "Made in Japan", then "Made in China", now more "Made in Malaysia", and soon "Made in India", then "Made in Ethiopia or Tanzania". There is plenty of cheap labor to be exploited.
That's Bernanke's contention about inflation. As long as those places remain on the petrodollar standard, the model works. When those countries make bilateral trade agreements in something other than the dollar, prices will take a significant hike.
China is cashing in Treasuries and spending their development yuans to buy resource producers and to cement business ties in those markets. By contrast, we are spending our dollars subsidizing military hardware giveaways to places like Egypt and Pakistan, for what? Frankly, we waste a whole lot of money on bad ideas, and this tendency is going to bite us.
I knew it would happen.
<< <i>I'm all in for replacing pineapples with jmski52's brand of Mac and Cheese. >>
Hmmm, two-fitty for V's Mac-n-cheese and pineapples at $3.44 per? Unless comrade j's Mac-n-cheese can be blended and poured in a glass with an umbrella...I'll stick wit da pineapple. Darn things should be next to free.
Liberty: Parent of Science & Industry
The USA is their largest customer, why would they do this?
China is cashing in Treasuries
No they are not. I dont often post blogs but this one has pretty pictures that illustrate my point. http://qz.com/132584/chinas-veiled-threat-to-buy-fewer-treasurys-is-an-empty-one/
Knowledge is the enemy of fear
<< <i>Why should pineapples be "next to free", in your view? Do they plant, tend, harvest, and ship themselves to the store? >>
When I lived in Colorado I could get one for $2. On Oahu, $3.44. Transportation costs to Colorado vice 20 miles on an Island seems self evident. So yeah I would think they'd be next to free or at least under $2.
<< <i>China is cashing in Treasuries >>
<< <i>No they are not. I dont often post blogs but this one has pretty pictures that illustrate my point. http://qz.com/132584/chinas-veiled-threat-to-buy-fewer-treasurys-is-an-empty-one/ >>
From your link:
"China’s central bank, the People’s Bank of China (PBOC), ties the yuan’s value closely to the US dollar. To do so it must buy dollars that come into the country from exporters and foreign investors when China exports more to the US than it imports, and when more investment is flowing into China than is flowing out. Those dollars go into the PBOC’s reserves. In order to make some return on them, it invests them in US government debt, the only market big and liquid enough for the size of its purchases."
This will change once China ties its currency to the gold it is hoarding. Don't think for a minute the Chinese desire to keep the value of their currency dependent on what they clearly see as a failing currency and they will not continue to invest in US government debt when it is no longer a wise investment. The yuan will be backed by gold and there is a good chance it will take world reserve currency status.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey