Open Mic September 7
The Democratic Convention was this week. We’ve said a lot about it, but have you any more to say? Also this week: Curiosity has started running around on Mars. Iraq is being friendly with Syria. The Catholic Church has another problem with a bishop in Kansas City. People have died from a hantavirus outbreak in Yosemite. There was also a football game this week. The Dow Jones Industrial Average hit a new post-crash high.
And a jobs report is out today.
Don’t see an article on a particular topic, but want to talk about it somewhere? This is Open Mic. Talk about whatever you want, but stay respectful.
We create a new Open Mic every week to give a clean slate, but feel free to add to this topic at any time.
Related articles
- Yosemite hantavirus: Man sickened in 2nd area; 6000 to be warned — Los Angeles Times (latimesblogs.latimes.com)

This entry was posted by Logarchism.com on September 7, 2012 at 3:00 am, and is filed under Open Mic. Follow any responses to this post through RSS 2.0.You can leave a response or trackback from your own site.
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#103 written by Mule Rider 9 months ago
No, Max, I was just waiting for DC to go first since he was the first to speak on the subject.
Now, I know you guys would love to dismiss a guy like Williams and what he does at ShadowStats as nothing but “tinfoil hat conspiracies” or thinking he has an “axe to grind,” but the man has an impressive resume and does his homework. You don’t get to just blithely dismiss him. Maybe his analysis isn’t perfect and maybe inflation isn’t quite as bad as the numbers he produces say it is, but he makes enough of a case to suggest it’s a little different than what the government says. But since you guys seem to only want to lap up what the government tells you, and since I’m an equal opportunity contrarian, I’d argue even the government’s numbers suggest inflation is more of a problem than you guys suggest. Pay closer attention to what’s been going on with “headline” rather than “core” inflation.
Look at the past 12 years or so. Outside of roughly one full year overlapping most of 2002 and one full year overlapping most of 2009, headline inflation has consistently outpaced core inflation. And in some cases, like last year and 2008, it was by a wide margin. A few more observations so that nobody thinks I’m glossing over anything: the two inflation measures were roughly neck-and-neck in 2007, headline was WELL below core in 2009, and in recent months we’ve seen headline dip below core inflation again.
Now I get why they’ve historically omitted food and energy prices over time, but provided what’s happened over the past 10–12 years, where headline inflation has much more often outpaced core inflation, and working with commodity markets like I do and seeing the kind of shift we’re seeing in food and energy markets (where tons of money that Bernanke has essentially created out of thin air is flowing into) and how those prices haven’t been fully passed on to consumers at the retail level (but will soon), ignoring headline inflation because of its “volatility” in favor of core inflation WILL cause you to get an UNDERSTATED sense of actual inflation.
Look, this makes sense right? Hard times hit. People will stretch a buck on necessities first. Money pours into things like food and gas rather than dishwashers, video games, or motorcycles. That’s out-of-pocket money, i.e. money that’s actually being spent, and you CAN NOT ignore that.
For the record, I don’t see hyperinflation as a problem.….yet. And maybe not in the very near future; depends on the course we take as a nation. But I do see inflation as being a bigger problem than how the government frames it. And it’s primarily because of two reasons: the focus they place on core at the expense of headline inflation when headline inflation has more often been higher in the past decade or so and for some of the reasons pointed out at ShadowStats where changes in methodology have masked actual inflation.
Feel free to disagree, but please don’t think I’m coming at this hollow or empty. And I hope I’ve presented enough information to make at least a semi-reasonable case in you guys’ view.
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#104 written by Mule Rider 9 months ago
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#105 written by rgbact 9 months ago
It seems like a parody of itself, almost like a Saturday Night Live “fake” commercial.
Must admit.…it really does! Wow, I’m anti-gay marriage but that is a truely horrible ad. Gives almost no information, has the slow piano playing background music that almost always means sap, and its main argument that Obama has no values is vague and offensive. But hey, still not sure if its as bad as the cancer ad. C’mon Gary, hire a real marketing firm. You can do better than this.
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#106 written by Max 9 months ago
Mule,
It’s not that I, personally, am arbitrarily dismissive of Williams. But here’s the nitty-gritty:
1) Williams is saying “hyperinflation” is just around the corner. Of course, he’s been saying this for half a dozen years now. Somewhere around 2018, he now says. To be fair, let’s give him a couple years either way.
2) Flinty-eyed bankers; lenders of money whose primary purpose is to make money on lending money, people who look over the horizon to BE DAMNED SURE that they will PROFIT on money lent today for 10–15-30 years. They CANNOT do that if they don’t take a VERY realistic view of inflation during the term of those loans. And THEY DISAGREE with Williams!!! THEY are setting 15– and 30-year mortgage rates at 3 percent and less!!!! Thousands of them!!
So, with THAT as a given, I believe I would be wiser to cast my lot, and my personal opinion, on inflationary possibilities with those bankers, not Mr. Williams.
As Jim Williams said: “
Sport, truth, like art, is in the eye of the beholder. You believe what you choose and I’ll believe what I know.“
YMMV -
From Treme’s article on DNA debunking the long-held claim by the Mornom church that America’s First Nations are really the remnant of Israel’s Lost Tribe:
Some longtime observers believe that ultimately, the vast majority of
Mormons will disregard the genetic research as an unworthy distraction
from their faith.That sentence made me LOL even before I had my coffee. It’s so exactly the way I feel about poll results that I happen to dislike! I loftily dismiss them as “an unworthy distraction
from my faith.”
So okay, those boring party-pooper science guys may have wrecked yet another fun theory… but you gotta admit, Treme, there’s something kind of spooky about the Doc’s little ancient rock art guy from the Dalles in Oregon having a menorah on his head.
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@rgb… Wow, I’m anti-gay marriage but that is a truely horrible ad.
See, this kind of fair-minded, straight-shooting is why I like rgb. Love him or hate him, but the man calls a shovel a shovel.
This ad is actually terrible for two reasons:
1.) It totally destoys the pious pretense that wingers are “just trying to save traditional marriage.” Instead, it puts the naked truth pretty much right out there. “Here in the privacy of our uptight white kitchens, we don’t like gay people and that’s all there is to it. Deal with it.”
2.) It made me giggle. When you are trying hard to be serious and people wind up laughing at you, that’s pretty lethal for whatever message you are seeking to convey.
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#109 written by rgbact 9 months ago
Now, I know you guys would love to dismiss a guy like Williams and what he does at ShadowStats as nothing but “tinfoil hat conspiracies”
Mule, I wish that guy would get some national attention. I haven’t seen anyone else uncovering the stuff he does. Anyway, we had a good inflation thread awhile back that discussed alot of these issues. My latest thoughts are.…are we even able to gauge the current CPI stat correctly? Williams states that the CPI formula was changed. Since then, by magic, the index has never shown a time of great inflation. Is that even credible or possible? Is the current formula “fixed” so as to never show inflation? Do we need to adjust how we interpret it then? Or do we need to find a new index? Most economic stats are somewhat cyclical, is it really credible that inflation just never gets bad anymore? Seems like either our unemployment stats are too finely tuned…or our inflation stats aren’t tuned enough.
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#111 written by rgbact 9 months ago
But what about those BANKERS???
Check out yesterday’s Zerohedge. It has a nice article on how much of those bonds are owned by the Fed. If you always have a buyer of last resort, why not buy those T-bonds even if you think they’re way too expensive. The Fed has broken the bond market,so I’m not sure its a good inflation guage. Gold is at $1750/oz btw.
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#112 written by Max 9 months ago
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So, are any prices actually rising in any sort of hyperinflationary way? Or is this all predictions of future disaster, like the people who keep telling us that the Second Coming is just around the corner? We’ve been waiting for that one for 2000 years. Is that how long we’ll have to wait for Williams’ apocalypse to happen?
I still don’t see any evidence of inflation being a problem at the moment.
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See, the thing with predicting disaster is that, some day, there will, in fact, be a disaster. Disasters sometimes happen. So if you keep predicting a disaster, some day you’ll be right. The question is whether the predicted disaster is close enough to warrant changes to current policy, and whether current policy is making a predicted disaster more likely to happen in the near future.
In the case of global warming, for instance, there is really solid evidence that the disaster is happening right now, and that current policy is contributing heavily — even causing it to happen. Altering our policies will not only help to slow the problems, but are actually helping in a myriad of ways (alternative, renewable non-polluting energy sources will create millions of new jobs, give us a cleaner and healthier environment, and will actually be sustainable forever, as opposed to using up limited fossil fuels.)
In contrast, in the case of the inflationary apocalypse, there are doomsayers who have been saying doom for decades, and it just isn’t happening. Time and again, we’ve gone past the dates of the predicted disaster, and it never hit us. Furthermore, suggested solutions, the prescriptions that have been proposed for avoiding the disaster, are always worse than the disaster itself would be, and will cause a great deal of damage to the world’s economy.
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Romney has gone totally off the deep end. I mean really. Completely insane.
Romney is so desperate, he is making up the most absurd crap one can imagine.
I dare you all to click on the link. The man has gone batshit crazy.
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#117 written by Max 9 months ago
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#119 written by rgbact 9 months ago
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#120 written by Mule Rider 9 months ago
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Mule,
I have been kind of busy lately, as have you apparently. I’m glad you’re back for the inflation topic.Yes, oil prices rose quite a bit during several segments of time. And the increase in oil prices caused a corresponding increase in food prices, which are, relative to several other industries, particularly sensitive to oil prices.
But what we have had, then, is inflation in two root markets: fuel and metals.
Metals often rise in times of economic uncertainty, simply because people use metals as a hedge against currency devaluation. When people begin to have fears of potential currency devaluation, they buy metals, causing spikes in their prices. We’ve seen it happen repeatedly, and it happens when there isn’t any quantitative easing. And, there have been signs lately that the prices of metals are reaching the point where their bubbles will burst, leaving a lot of people underwater wondering what went wrong.
Oil now rises consistently when demand for oil rises, simply because there isn’t production headroom of the sort we had in previous decades. We get occasional supply shifts, such as is happening with fracking (itself a problem, but that’s for another day). As a result, we’ve had a brief respite from the higher oil prices, but it’s hard to imagine that it buys us more than a few additional years before we hit those $120+ prices again (just look at the trend lines and you’ll see what I mean).
Take those out of the equation, and we don’t have inflation. But, of course, the shadow guy says we shouldn’t be taking them out of the equation, because they are really things people buy. And, in a sense, he’s right. From the perspective of the person buying goods, that inflation is quite real.
BUT, that inflation is not caused by loose money. It’s caused by an increase in demand for commodities that have a ceiling in supply. And, therefore, pointing to loose money as the cause of that inflation is missing the point entirely. One tightens the money supply if one wishes to reduce inflation that is caused by the money supply. Sure, a tighter money supply would reduce inflation in oil, but that’s only because it would cause a recession, which would lower demand for oil, which would reduce the price of oil. Not quite the causal relationship typically described by Austrian School adherents. In other words, to the extent that it solves the problem, it does so entirely by accident.
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Michael, thank you for explaining that.
I have an immense problem. Stuff like what you explained seems intuitively obvious to me. Therefore, I assume it is obvious to everyone, and I don’t bother to explain it. Why explain something that is freaking obvious?
So when I read stuff like what Mule linked, I think, “This is clearly a person who is trying to get low-information people upset over nonsense. But the people who read Logarchism are not low-information people, and they’re pretty smart. So none of them are going to be scared by this silliness, right?”
It’s clear that Williams’ concerns are partisan propaganda, not actual economic worries, as you explain. I can’t imagine anyone would be taken in by his argument, other than partisans who want to believe it anyway. I’m not egotistical enough to think that I’m smarter than the average bear, so I assume that what is clear to me is also clear to everyone. Maybe I’m wrong.
When I dismiss an obvious partisan hack like Williams, someone like Mule insists I didn’t read him, or don’t understand him. But I do understand him. I also understand that he’s an idiot.
Hell with it. I’ll let you explain this stuff.
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#125 written by Armchair Warlord 9 months ago
dc,
It’s quite simple really — there are entire schools of thought with adherents who are objectively clever people that are simply wrong. This kind of thing is common in the softer sciences, where it’s difficult to disprove a theory except with an extreme preponderance of evidence. This kind of thing is common in military science as well as economics — wars, like recessions, are relatively rare and unique events and rarely lend themselves to dispassionate analysis. Regardless, there is clearly a right and wrong school of thought on the subject when one does the necessary spadework to dig through the mythmaking.
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#126 written by Mule Rider 9 months ago
“It’s clear that Williams’ concerns are partisan propaganda, not actual economic worries.…”
How, exactly, is that “clear”?
“But I do understand him. I also understand that he’s an idiot.”
See, when you say stuff like this, it comes off like the naysayers on the old 538.com who dismissed Nate in much the same fashion. Williams, like Nate, has the credentials. Look at his academic and professional profile. It comes off as borderline absurd when someone at a relatively obscure blog who openly admits they don’t have the strongest professional credentials in the field of economics outright calls someone like that an idiot.
You’ve resorted to ad hominems and insults and made presumptions of his motives but you’ve yet to offer any substantive, quantitative refutation of his critique. Until you make even the slightest attempt to do so, then sorry, it is YOU who can not be taken seriously on this matter. So go back among the rest of the unthinking herd and wonder why McCain wasn’t elected President in 2008.
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#127 written by Mule Rider 9 months ago
“Yes, oil prices rose quite a bit during several segments of time. And the increase in oil prices caused a corresponding increase in food prices, which are, relative to several other industries, particularly sensitive to oil prices.”
You don’t get that kind of a quick pass-through in terms of energy and food prices. Those are adjustments made over years and haven’t been fully reflected at the retail level. Not even close.
“And, therefore, pointing to loose money as the cause of that inflation is missing the point entirely.”
And ignoring it so you can say, “there is no evidence of inflation anywhere” and pretend it isn’t a problem ALSO misses the point entirely. We can nitpick over particulars like IF and HOW MUCH of it is related to real shifts in supply and demand versus loose money supply, but the fact remains that the cost of goods is going up in a problematic fashion, and there is a threat of it getting worse before it gets better.
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Mule,
I get what you’re saying about credentials. But since people with equally good credentials come to opposite conclusions, “having credentials” can’t prevent one from being flat wrong. Certainly Paul Krugman has better credentials than either of us (probably even better than Williams — I don’t think Williams has a Nobel on his resume, right?), and you feel qualified to disagree with Krugman. (At the moment, I’m not defending Krugman, nor attacking you; I’m merely underlining that “credentials” may not be relevant to the current discussion).
As for the basis of my opinions on Williams, Michael explained it better than I could. In brief, I think Williams is looking at the wrong factors, blaming the wrong things as causative, and ignoring too many of the actual influences. He has a point he wants to make, which may be a perfectly valid point, but he’s pushing it too far. The predictions of disaster he’s making have been made for a long time, and just aren’t coming to pass.
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Mule,
You don’t get that kind of a quick pass-through in terms of energy and food prices.
Why wouldn’t you? We have shorter supply chains than we had in previous decades, so the lag between raw materials and retail finished goods is much shorter than it was in the 1980s.
And ignoring it so you can say, “there is no evidence of inflation anywhere” and pretend it isn’t a problem ALSO misses the point entirely.
And if I were doing that, I would be missing the point. But I’m not. I haven’t said there’s no evidence of inflation anywhere. I’m saying that the evidence points to a supply ceiling, coupled with increased demand, that is causing the inflation that we do see.
We can nitpick over particulars like IF and HOW MUCH of it is related to real shifts in supply and demand versus loose money supply
It should be relatively easy to see it, if it’s there. Inflation caused by loose money appears everywhere. Look at the 1970s version of inflation, and you’ll see what I mean. It doesn’t matter if you’re talking about oil, food, cars, rubber bands, thumbtacks, hotel rooms…they were all rising at double-digit rates. Today, we’re seeing it in specific markets, not in a widespread fashion.
the fact remains that the cost of goods is going up in a problematic fashion, and there is a threat of it getting worse before it gets better.
I don’t disagree with this. But here’s the thing: let’s say you go to a doctor, and you have a fever. The doctor can tell that you have an infection, but can’t tell whether it’s bacterial or viral. If the doctor gives you antibiotics, and the infection is bacterial, he’s treating the infection. If it’s viral, he’s doing harm.
Similarly, you’re talking about the economy having a fever. You want to administer antibiotics. I’m pointing out that the evidence suggests this is a viral infection. Tightening the money supply won’t stop oil or food prices from rising, except to the extent that it creates a recession.
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#130 written by Mule Rider 9 months ago
“I get what you’re saying about credentials. But since people with equally good credentials come to opposite conclusions, “having credentials” can’t prevent one from being flat wrong.”
I get that. But it should prevent someone like youself calling an “idiot” and and saying their only concern is dissiminating “partisan propaganda.”
” I don’t think Williams has a Nobel on his resume, right?”
Winning a Nobel Prize isn’t necessarily indicative of being “better” or right more often. Those are specifically to honor a specific contribution to the field in an isolated time period, generally one year. It’s a bit old and worn out to keep trotting that out on Krugman’s behalf as if it makes him above reproach from someone without a Nobel.
“The predictions of disaster he’s making have been made for a long time, and just aren’t coming to pass.”
Disasters oftentimes have much more subtlety to them than we seem to think and are not always that obvious till they’ve reached that “tipping poing,” “critical mass,” etc. That doesn’t mean that everything happened overnight or all at once. It was something building over time, and it’s a valid point that this is a diaaster that’s slowly building, but at some point will be treacherous for everyone. And that’s another point in this; that being that it’s easy to dismiss concerns that aren’t slapping you directly in the face but are affecting millions of people you don’t relate to on a daily basis. What’s the old saying? A recession is when you’re neighbor loses his house/job. A depression is when you lose yours. Don’t discount a creeping disaster because you either don’t say or are insulated from the effects.
“Why wouldn’t you? We have shorter supply chains than we had in previous decades, so the lag between raw materials and retail finished goods is much shorter than it was in the 1980s.”
Just so we’re clear, I’m speaking just about the connection between oil and food, not anything else. And I can tell you looking at it the way I do with my job that there are enough complexities involved that this recent increase in input prices to wholesale producers of food hasn’t been fully reflected at the retail. Not by a country mile.
“And if I were doing that, I would be missing the point. But I’m not. I haven’t said there’s no evidence of inflation anywhere.”
You’re, right, you didn’t. DC did. Which is who I was referring to; which also underscores the challenge of this type of free-for-all style of discussion with everybody weighing in. Don’t get me wrong, it’s nice in a way, but we often find ourselves defending against statemetns we didn’t make but that somebody else on our “team” did.
“Tightening the money supply won’t stop oil or food prices from rising, except to the extent that it creates a recession.”
I don’t think you, I , or anyone else can know this with certainty.
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Mule,
I’m speaking just about the connection between oil and food, not anything else. And I can tell you looking at it the way I do with my job that there are enough complexities involved that this recent increase in input prices to wholesale producers of food hasn’t been fully reflected at the retail.
Even if that’s true, it still doesn’t point to currency devaluation from loose money as the culprit. It merely means that we’ll be seeing higher food prices later on.
You’re, right, you didn’t. DC did.
That’s why it helps if you indicate to whom you’re speaking. Not that there’s anything wrong with consolidating it into a single comment, but attaching a name to the response does help.
I don’t think you, I , or anyone else can know this with certainty.
There’s little we can know with certainty, but we can look at the preponderance of evidence. The preponderance of evidence supports the following
Inflation caused by loose money appears everywhere. Look at the 1970s version of inflation, and you’ll see what I mean. It doesn’t matter if you’re talking about oil, food, cars, rubber bands, thumbtacks, hotel rooms…they were all rising at double-digit rates. Today, we’re seeing it in specific markets, not in a widespread fashion.
Monetary policy is systemic; it impacts the entire economy. We’re not seeing systemic inflation; we’re seeing segmented inflation.
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It’s a bit old and worn out to keep trotting that out on Krugman’s
behalf as if it makes him above reproach from someone without
a Nobel.If that had been what I was doing, you’d be justified in pointing this out. But I wasn’t trying to imply that Krugman is above reproach. Quite the contrary, Since you so often take Krugman to task, despite his achievements and credentials and recognitions, it implies that you agree achievements and credentials and recognitions do not make someone immune to being taken to task. Far from using Krugman’s Nobel as a shield to put him above reproach, I was trying to say that even having gotten a Nobel does not make one right all the time, certainly not in your view. Therefore, I don’t really take Williams’ credentials as meaning much, certainly not more than, say, Krugman’s. Either way, what matters is the argument, and Williams didn’t convince me.
Don’t discount a creeping disaster because you either don’t say or are insulated from the effects.
That’s not why I discount it. I discount it because I’m convinced Williams is wrong in his analysis, not because I personally don’t feel the effects. I’m convinced the effects he’s pointing to are due to other causes entirely, and that the cures he would propose would do far more harm than good.
I understand what you’re saying about “tipping points,” that certain phenomena are not really visible until they reach a crisis threshold and make things fall over. But the problem here is that even if Williams is wrong, he can keep saying, forever, “We don’t see the effects yet — hyperinflation hasn’t hit us — only because we haven’t yet reached the tipping point.” He can use this argument for the next hundred years to avoid considering the possibly that he is simply wrong.
It’s the same as with, for instance, an economic policy designed to spur growth that doesn’t appear to be working. Believers in the policy can point to some subtle metric and say, “but see this? Things are changing. It all hasn’t reached critical mass yet. Give it time.” How long do we wait to see the effects before we answer, “no, it really isn’t working at all”?
I don’t see any evidence that anything happening now is going to lead to hyperinflation. I most certainly don’t think that the low interest rates and mild QE programs are going to do it.
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We’re not seeing systemic inflation; we’re seeing segmented inflation.
Yes, this is what I meant when I incorrectly and inexactly said something about not seeing any evidence of inflation. I was speaking in systemic terms, and I should have made that clear. I don’t see any evidence of the sort of system-wide pressures that devalue currency over the economy as a whole. Yes, the prices of some individual things are rising — while the prices of other commodities and processes are falling. There isn’t any evidence of a general system-wide trend of rapidly rising prices across a wide swath of the economy, other than fluctuations caused by (for example) energy speculation.
I’m sure Mule is right that, in at least some cases, there is more going on than simple supply and demand. There are pressures involving technology changes, big shifts in the mix of active or growing industries, a crumbling infrastructure that puts pressure in unusual places of the economy, disasters such as Hurricane Isaac that force spending and revenue shifts, two wars winding down which also significantly alter spending and the mix of government contracting, etc., etc. And none of these influences have completely played out; all are going to continue having effects for a long time.
All told, it doesn’t appear to me to be pushing us toward hyperinflation. Indeed, I see more danger in letting things cool down too much, and dropping us into another recession, which is what’s happening in Europe.
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#135 written by Mule Rider 9 months ago
“If we’re allowed to pick and choose particular commodities to indicate inflation, we’re liable to get results that are wildly different from one another.”
What a howler.…but at least we get a two-for-one on our laughs as they talk about their worry of deflation in an article that mentions housing prices and NFL tickets, two of the most over-inflated items you can spend money on. Funny how nobody from either of those sectors was worried about inflation when double-digit annual price increases was the norm.
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#137 written by Mule Rider 9 months ago
“Systemic inflation, on the other hand, will show up everywhere. (By “everywhere, I mean that it’s pervasive, not that you won’t find dropping prices in any market.)”
Yeah, but it’s time to worry when prices start rising sharply for things like food/energy that people can’t do without (or are met with extreme hardship if they have to pare back their consumption significantly) as opposed to NFL tickets or McMansions, which people can clearly do without.
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#138 written by rgbact 9 months ago
Funny how nobody from either of those sectors was worried about inflation when double-digit annual price increases was the norm.
Thats why I think the indexes are just faulty. Housing prices going way up…they show no inflation. Housing pricing going down and gas prices skyrocketing.….they show no inflation. What has to happen to show inflation?
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#139 written by Max 9 months ago
But looking at food/energy and seeing rising prices, then running around crying “hyperinflation” and extending the issue across the board is simplistic and ignores the short term effects that could have caused those price increases.
The extended (not caused by global warming!) drought across two-thirds of America, destroying crops in the fields, killing grass in pastures, lowering water tables, causing beef herds to be reduced because ranchers can’t afford to feed the cattle or import water for them to drink, raises food prices now and in the near future and has NOTHING to with monetary policy. And the effect can ripple through the supply chain for two or more years. The beef herd can take as many as 5 to 6 years to reëstablish when breeders are slaughtered. New breeders must come of age and then 2 years for new calves to come to market.
A hurricane can go through the Gulf of Mexico and oil and gasoline prices will go up for WEEKS, even with NO DAMAGE to rigs and refineries. A POTENTIAL threat in the Straits of Hormuz and the Persian Gulf and oil and gasoline prices will increase for weeks even if NO ACTUAL incident occurs! A refinery fire in California will cause gasoline prices to increase NATIONWIDE and stay there for weeks and even months. None of which has anything to do with monetary policy.
These two items, food and energy, are two of the more volatile items in the market basket and significant factors must be taken into account, and time frames well considered, before counting those particular chicken before the inflationary egg is hatched.
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Mule,
Yeah, but it’s time to worry when prices start rising sharply for things like food/energy that people can’t do without
Sure, we can worry about it. But that’s different from proposing that we tighten money to combat it. When we have food prices rising for reasons besides energy costs, maybe we should stop promoting ethanol and encouraging arable land to be converted into housing tracts. Maybe we should be encouraging people to eat more vegetables and less meat and dairy, which would allow us to get more food from less land.
Tightening money is a tool used to combat an overheated economy. What signs are there that we have an overheated economy? Is it the low unemployment? The increase in luxury retail purchases? The rise in market share of Escalades coupled with the fall in market share of Yarises?
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#141 written by Max 9 months ago
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rgbact,
Housing prices going way up…they show no inflation. Housing pricing going down and gas prices skyrocketing.….they show no inflation. What has to happen to show inflation?
I’m pretty sure I answered this question already. Core inflation is meant to show systemic inflation. So when you have a sector sharply diverging from the mean, it should be excluded from core inflation…specifically because it’s sharply diverging from the mean.
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#143 written by rgbact 9 months ago
it should be excluded from core inflation…specifically because it’s sharply diverging from the mean.
Sounds like me and PPP polling. Eliminate the number you don’t like
Had you been alive/cognizant between 1974 and 1981, you would not have to ask that question.
I was, knucklehead. Setting aside the fact that the CPI formula was changed.….please outline what sectors drove the 70’s inflation that are not driving todays. Healthcare? Toothpaste? Lawnmowers?
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rgbact and Max,
I think your problem is with the term “inflation” which apparently means different things to different people.
oh, and since central banks are supposed to keep inflation at 2–3%,
The US inflation rate was in the 12% range in late 1974 and is in the 2–3% range now. Maybe a four-fold difference in the core inflation rate could bear on rgbact’s question in #143.
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#145 written by Max 9 months ago
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#146 written by Max 9 months ago
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rgbact,
Sounds like me and PPP polling.
Exactly. Except nothing like it.
Eliminate the number you don’t like
That’s why it’s nothing like you and PPP. It has nothing to do with liking or disliking. It has everything to do with the question being asked. If your question is about people’s daily expenditures, then the exclusion is a bad thing. If the question is about whether we’re seeing the effects of an overheated economy, then the exclusion is absolutely necessary.
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#148 written by turrboenvy 9 months ago
I admit that I know precious little about how inflation is calculated, but when something is as volatile as gas prices, wouldn’t you want to exclude that? Yes, your commute costs more, and those gas prices will trickle down to the price of every-day things, but it’s gas that’s going crazy, not the value/buying power of a dollar. Gas prices more than doubling (say there’s a big hurricane and they go from 1.75 to 4.20 within a week) doesn’t mean that we’ve had 140% inflation. Just like when they go back down, it doesn’t mean we’re experiencing deflation.
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#150 written by Max 9 months ago
Mono,
No prob. He’s probably still searching the internets. I’ll ask: Who, in their wildest imagination, could see a GOP Prez would, (could) do this:
Number nine: Federal taxes and spending. To support programs, to increase production and share inflation-produced hardships, we need additional tax revenues.
I am aware that any proposal for new taxes just four weeks before a national election is, to put it mildly, considered politically unwise. And I am frank to say that I have been earnestly advised to wait and talk about taxes anytime after November 5. But I do say in sincerity that I will not play politics with America’s future.
Our present inflation to a considerable degree comes from many years of enacting expensive programs without raising enough revenues to pay for them. The truth is that 19 out of the 25 years I had the honor and the privilege to serve in this Chamber, the Federal Government ended up with Federal deficits. That is not a very good batting average.
By now, almost everybody—almost everybody else, I should say—has stated my position on Federal gasoline taxes. This time I will do it myself. I am not-emphasizing not—asking you for any increase in gas taxes.
I am—I am asking you to approve a l-year temporary tax surcharge of 5 percent on corporate and upper-level individual incomes. This would generally exclude from the surcharge those families with gross incomes below $15,000 a year. The estimated $5 billion in extra revenue to be raised by this inflation-fighting tax should pay for the new programs I have recommended in this message.
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#155 written by dawolf 9 months ago
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#156 written by shortchain 9 months ago
Yes, that’s an interesting op-ed. The tendency of the human animal to over-react and do more harm than good is well known. Another example was the reaction to that event 11 years ago today, which is still being played out.
We can only marvel at the stupidity of trying to tamp down militant behavior by spending more money on the military, and to quell antagonism toward the US by invading and occupying countries, or flying death-by-drone missions in them.
Then there’s the creation of the surveillance state, which apparently has done precious little to make people safer, but which has resulted in almost every click on your mouse being recorded by your ISP, available to the FBI, CIA, NSA, or other 3-letter agency at the drop of a “national security letter”.
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#157 written by Max 9 months ago
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*****************NEWS UPDATE***********************
The current results for the Willie Nelson’s Teapot Party Straw Poll
Obama — 272
Johnson — 179
None of the Above — 80
Romney — 88