Inflation

Started by Dan, March 14, 2012, 12:22:29 PM

Previous topic - Next topic

Dan

Look at what happened to senior citizens in Russia during the 90s and you will see what happens to the elderly in hyper inflation.

As for 10% not hurting, you gotta be crazy. That would be much more than a marginal hit to seniors.
If you believe big government is the solution then you are a liberal. If you believe big government is the problem then you are a conservative.

elmerfudd

Quote from: Dan on March 20, 2012, 11:52:55 AM
Look at what happened to senior citizens in Russia during the 90s and you will see what happens to the elderly in hyper inflation.

As for 10% not hurting, you gotta be crazy. That would be much more than a marginal hit to seniors.

Seniors in Russia weren't exactly prospering prior to the nineties, either. Nor was anybody else in Russia.  But again, hyper inflation (at least in my understanding) is not the same as low double digit inflation. 

I may be a lot older than you, I don't know.  But I remember periods of inflation in double digits, and I knew many senior citizens on fixed incomes during that time.  It was not a good thing by any means, and it was, as you say, "more than a marginal hit."  But I do not recall any homelessness or starvation among the senior citizens with whom I was familiar. 

Dan

Quote from: elmerfudd on March 20, 2012, 01:50:57 PM
Seniors in Russia weren't exactly prospering prior to the nineties, either. Nor was anybody else in Russia.  But again, hyper inflation (at least in my understanding) is not the same as low double digit inflation. 

I worked with a guy back then whose family was in Russia. A lot of seniors couldn't afford basic food or heating fuel in those cold Russian winters. A lot of seniors died of "natural" causes that were likely compounded by these deprivations. If you don't believe me, then find some Russians who were around back then and ask them yourself. ;)
If you believe big government is the solution then you are a liberal. If you believe big government is the problem then you are a conservative.

Dan

Quote from: elmerfudd on March 20, 2012, 01:50:57 PM
I may be a lot older than you, I don't know.  But I remember periods of inflation in double digits, and I knew many senior citizens on fixed incomes during that time.  It was not a good thing by any means, and it was, as you say, "more than a marginal hit."  But I do not recall any homelessness or starvation among the senior citizens with whom I was familiar. 

And back in the late 70s you had more seniors who could move in with their kids. You had more seniors who weren't paying such a large percentage of their budget on medical costs. It's a different time. And I am not saying every senior will die at 10% inflation, but some will become homeless. Some will not be able to afford the food they need or to pay the copays on their prescriptions. And the human suffering of these people cannot be dismissed lightly. These people will bear the burden of today's loose fiscal policies and that is why I think what the politicians are currently doing is borderline criminal behavior. No one should be allowed to set events into motion that harm so many people and just get away with it.
If you believe big government is the solution then you are a liberal. If you believe big government is the problem then you are a conservative.

elmerfudd

Quote from: Dan on March 20, 2012, 02:21:00 PM
And back in the late 70s you had more seniors who could move in with their kids. You had more seniors who weren't paying such a large percentage of their budget on medical costs. It's a different time. And I am not saying every senior will die at 10% inflation, but some will become homeless. Some will not be able to afford the food they need or to pay the copays on their prescriptions. And the human suffering of these people cannot be dismissed lightly. These people will bear the burden of today's loose fiscal policies and that is why I think what the politicians are currently doing is borderline criminal behavior. No one should be allowed to set events into motion that harm so many people and just get away with it.

We'll see what happens, I guess.  I don't see the future as bleak as you do.  Those poor seniors will just have to learn to stand on their own two feet, I guess.  I don't want to pay any more taxes to feed and house them, anyway, and you've already said you don't. 

elmerfudd

Quote from: Dan on March 20, 2012, 02:18:13 PM
I worked with a guy back then whose family was in Russia. A lot of seniors couldn't afford basic food or heating fuel in those cold Russian winters. A lot of seniors died of "natural" causes that were likely compounded by these deprivations. If you don't believe me, then find some Russians who were around back then and ask them yourself. ;)

Oh, I believe you. But those conditions have existed in Russia since before 1917.  It was their existence that led, in large part, to the Revolution.  It was the Commies who failed to fix it and, in fact, mostly made it worse. People have been starving and freezing to death in Russia long before the nineties. 

Dan

Quote from: elmerfudd on March 20, 2012, 02:31:50 PM
Oh, I believe you. But those conditions have existed in Russia since before 1917.  It was their existence that led, in large part, to the Revolution.  It was the Commies who failed to fix it and, in fact, mostly made it worse. People have been starving and freezing to death in Russia long before the nineties. 

Not really. They weren't what we would define as prosperous, but they had a level of stability and relative comfort prior to the Russia Banking crisis of 1998 for example, that was far better than what they had afterwards. There was a dramatic incremental shift for the worse for millions of Russians in 1998.
If you believe big government is the solution then you are a liberal. If you believe big government is the problem then you are a conservative.

elmerfudd

Quote from: Dan on March 20, 2012, 02:36:53 PM
Not really. They weren't what we would define as prosperous, but they had a level of stability and relative comfort prior to the Russia Banking crisis of 1998 for example, that was far better than what they had afterwards. There was a dramatic incremental shift for the worse for millions of Russians in 1998.

Could be.  All I know is, when I read about life under Stalin, it didn't sound all that good. And that Iron Curtain was to keep people in from getting out, not those on the outside from getting in.  So my belief, rightly or wrongly, was that it was not a good place to live even prior to the nineties.   

Dan

Quote from: elmerfudd on March 20, 2012, 02:43:46 PM
Could be.  All I know is, when I read about life under Stalin, it didn't sound all that good. And that Iron Curtain was to keep people in from getting out, not those on the outside from getting in.  So my belief, rightly or wrongly, was that it was not a good place to live even prior to the nineties.   

Stalin died 40+ years prior to the banking crisis of the 90s. Not applicable. It would be like people thinking your life was like that of people in the Eisenhower administration. Things had loosened up a bit. Kruschev and Breshnev and Andropov didn't pull millions of Russians out of their homes in the dark of night and have them killed.
If you believe big government is the solution then you are a liberal. If you believe big government is the problem then you are a conservative.

elmerfudd

Quote from: Dan on March 21, 2012, 09:15:46 AM
Stalin died 40+ years prior to the banking crisis of the 90s. Not applicable. It would be like people thinking your life was like that of people in the Eisenhower administration. Things had loosened up a bit. Kruschev and Breshnev and Andropov didn't pull millions of Russians out of their homes in the dark of night and have them killed.

True.  But they still had that "Iron Curtain."  And what little reading I have done about life in the USSR tells me it was no picnic even after Stalin.  But I'll let it go. 

Solar

"Fifteen-percent inflation is going to drive interest rates through the roof," Cunningham says. "You could be looking at certainly more than 15 percent in mortgages and other financing costs. It would be hard to get raises to keep up with that."

The inflation threat is being driven by the unprecedented amount of money the Federal Reserve pumped into the economy to combat the recent recession. To combat inflation, the Fed now has to drain substantial excess reserves from the banking system, which Cunningham warns may not be possible.

"In that crisis, nobody was borrowing and nobody was lending, so the money piled up," he comments. "Currently there are banks that are holding about 15 times their required amount of reserves."
http://www.aier.org/article/7550-inflation-risk-around-corner
Official Trump Cult Member

#WWG1WGA

Q PATRIOT!!!

elmerfudd

Quote from: Solar on March 25, 2012, 10:47:39 AM
"Fifteen-percent inflation is going to drive interest rates through the roof," Cunningham says. "You could be looking at certainly more than 15 percent in mortgages and other financing costs. It would be hard to get raises to keep up with that."

The inflation threat is being driven by the unprecedented amount of money the Federal Reserve pumped into the economy to combat the recent recession. To combat inflation, the Fed now has to drain substantial excess reserves from the banking system, which Cunningham warns may not be possible.

"In that crisis, nobody was borrowing and nobody was lending, so the money piled up," he comments. "Currently there are banks that are holding about 15 times their required amount of reserves."
http://www.aier.org/article/7550-inflation-risk-around-corner

Something I vaguely recall from economics courses that were inflicted on me in the guise of higher education is that the real interest rate is always about 3%.  That is, the rate a good borrower would be expected to pay on a loan would be 3 plus the inflation rate.  Give or take a tad based on ;peculiar circumstances.  One of which was the stagflation of the 70's.

Solar

Quote from: elmerfudd on March 25, 2012, 05:00:48 PM
Something I vaguely recall from economics courses that were inflicted on me in the guise of higher education is that the real interest rate is always about 3%.  That is, the rate a good borrower would be expected to pay on a loan would be 3 plus the inflation rate.  Give or take a tad based on ;peculiar circumstances.  One of which was the stagflation of the 70's.
Thats how I remember it as well, but I think Benny was lending it out at less than 1% in an attempt to stimulate the economy.
That worked really well. :rolleyes:
Official Trump Cult Member

#WWG1WGA

Q PATRIOT!!!

lessthantolerant

Quote from: Dan on March 14, 2012, 12:22:29 PM
At some point the economy is going to get better and when it does our excess money supply guarantees inflation. How will you guys plan for a high inflation environment?

Added a second freezer to my garage and have been stocking up on most supplies for a year now. Inflation is coming!

elmerfudd

Quote from: lessthantolerant on March 27, 2012, 02:45:59 AM
Added a second freezer to my garage and have been stocking up on most supplies for a year now. Inflation is coming!

Watch those shelf lives, now. 

This kind of reminds me of the Y2K scare.  Planes were going to fall from the sky, the grid was going to shut down, and I know one man who says his family is still wiping their butts with toilet paper his wife stocked up on during 1999 "just in case."  At least toilet paper has a pretty long shelf life.