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?
I've been saying this for some time now.
This is why we are stocking up on food, maybe even a two year supply in the freeze dried form.
I don't know if you remember, but you and me talked about this scenario on the LNF board maybe 4 years ago.
Food and fuel can me managed to some point. But healthcare is gonna be a real mess.
Quote from: Dan on March 14, 2012, 05:29:07 PM
I don't know if you remember, but you and me talked about this scenario on the LNF board maybe 4 years ago.
Food and fuel can me managed to some point. But healthcare is gonna be a real mess.
Four years ago and it still ain't happened. Could, though.
I don't know what you mean by "high inflation," but we had double digits in the 70's and I don't recall any undue suffering with respect to starvation or access to health care. Not any more than we have right now, anyway.
Hyper inflation is another matter. This country has never suffered from it. Will we at some point? I rather doubt it, but it's possible. Plenty of countries have (Germany and Russia, for example, in and around WWI; Hungary and China in and around WWII; Brazil even later than that) but we never have. Not even in the hundred years of the "accursed" federal reserve.
Quote from: Dan on March 14, 2012, 05:29:07 PM
I don't know if you remember, but you and me talked about this scenario on the LNF board maybe 4 years ago.
Food and fuel can me managed to some point. But healthcare is gonna be a real mess.
Your healthcare comment resonates with an item I heard today on MSNBC, the lying liberal leftist America hating network on which the Cafferty report appears. That lying sack of excrement said that economists are predicting that in 20 years, it will take 100% of the average worker's paycheck JUST to purchase healthcare. And invited people to comment.
Which I didn't, because I was exercising at the Anytime fitness at the time. But my comment is hogwash. No one can spend 100% of his income on healthcare. He's gotta eat, gotta have a place to live, gotta have a gun, gotta have bullets to put in the gun, and gotta have beer. Those are bare necessities. Ain't gonna happen is my comment. Just more fear mongering.
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?
I think it would kick in when the housing market recovers...
Quote from: The Boo Man... on March 16, 2012, 07:37:07 AM
I think it would kick in when the housing market recovers...
I read it will kick in when the economy actually starts to recover and hyperinflation kicks in when the housing mkt starts to recover.
Regardless, were screwed either way...
Quote from: Solar on March 16, 2012, 09:20:00 AM
I read it will kick in when the economy actually starts to recover and hyperinflation kicks in when the housing mkt starts to recover.
Regardless, were screwed either way...
Then we have many many years to prepare for it..
Quote from: The Boo Man... on March 16, 2012, 10:34:15 AM
Then we have many many years to prepare for it..
OUCH!!! :laugh:
There is a really good book on the German hyperinflation after WWI - the Great Inflation by William Guttman and Patricia Meehan. Been a while since I read it, might reread it now. It's out of print and for some reason used copies are kind of pricey. It's a good book for how ordinary folks fare in times of hyper inflation. Your local library may have it.
Quote from: The Boo Man... on March 16, 2012, 07:37:07 AM
I think it would kick in when the housing market recovers...
I think it will kick in sooner. The housing market has the double headwinds of excess supply and much more limited access to financing than in the past and that will obviously limit demand.
The economy will do better before the housing market fully recovers. There will be certain areas that do well, but the market as a whole just has too many problems right now.
Quote from: Solar on March 16, 2012, 09:20:00 AM
I read it will kick in when the economy actually starts to recover and hyperinflation kicks in when the housing mkt starts to recover.
Regardless, were screwed either way...
We aren't uniformly screwed. It will be a matter of knowing what are the best investment strategies in a higher inflation environment. That is really where I was hoping to have the conversation go.
Gold vs residential real estate secured by fixed rate loans. Farmland. Commercial real estate. Where do you guys see the smart money going with 10-20% inflation?
Quote from: Dan on March 19, 2012, 08:20:54 AM
We aren't uniformly screwed. It will be a matter of knowing what are the best investment strategies in a higher inflation environment. That is really where I was hoping to have the conversation go.
Gold vs residential real estate secured by fixed rate loans. Farmland. Commercial real estate. Where do you guys see the smart money going with 10-20% inflation?
Sadly, out of the country.
At this point, any real investments would have to be long term, like land, which isn't going to appreciate anytime soon.
If I was young and rich, I'd invest in energy outside the US, in order to keep the gov hands off of it, probably move to the Caymans or something.
I think the mkt is up for grabs at this point. Most investments were done with gov handouts in mind, once Hussein and the Marxists are out of office, the smart money will be looking for the next big thing.
What that will be, is anyones guess.
I would venture to guess something along the lines of a service industry, like home remodeling, or something that will be in demand once people start working again, like servicing your car while you're at work, pick up and delivery back to your place of work.
You know, anything from an oil change and detail, to major repair, all in one day.
I think people are going to be a bit more gun shy after what has transpired, I don't see a sharp return to investing as it used to be, but rather people investing in other people to give them a return on their money in the small business sector.
Also think about people on fixed incomes like social security and pensions.
Basically the value of a dollar follows an inverse curve to inflation. 10% inflation means a dollar is worth 90 cents next year. But you know that social security and pensions will not rise at anything close to that rate. A high inflation rate is gonna be very had for our seniors.
Quote from: Dan on March 20, 2012, 07:30:53 AM
Also think about people on fixed incomes like social security and pensions.
Basically the value of a dollar follows an inverse curve to inflation. 10% inflation means a dollar is worth 90 cents next year. But you know that social security and pensions will not rise at anything close to that rate. A high inflation rate is gonna be very had for our seniors.
And even if they do rise at close to that rate, it may make the inflation worse as more money is chasing the same goods and services.
But we've had 10% and higher inflation before and I don't recall any great suffering. Hyperinflation is another matter. We've never had it in this country, and I frankly don't see it coming any time soon. One thing that hyperinflation does real fast, unless there is some governmental "indexing" to stop it, is shift resources from savers to borrowers. So if you see it coming, borrow LOTS of money. As much as you can. Then spend it on something tangible. Like real estate. Or gold.
I will recommend it again for those who would like to know what it was like to live in a period of hyper inflation. The Great Inflation by William Guttman and Patricia Meehan. I am going to dust my copy off and read it again real soon. Very interesting and entertaining book.
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.
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.
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. ;)
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.
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.
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.
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.
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.
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.
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.
"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 (http://www.aier.org/article/7550-inflation-risk-around-corner)
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 (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.
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:
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!
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.
Quote from: elmerfudd on March 29, 2012, 11:39:57 AM
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.
So you're saying that its stupid to buy items while they're still affordable? :rolleyes:
Quote from: Solar on March 29, 2012, 12:06:29 PM
So you're saying that its stupid to buy items while they're still affordable? :rolleyes:
No. But I am saying there may be some over reaction here. We've had double digits before and I don't remember widespread starvation. It's a free country. Stock up all you want.
Quote from: elmerfudd on March 29, 2012, 12:48:43 PM
No. But I am saying there may be some over reaction here. We've had double digits before and I don't remember widespread starvation. It's a free country. Stock up all you want.
I doubt that's why people are stocking up, I know its not why I am.
I expect at least a 30% price increase on most items, stocking up is a good way to hedge against price increases.
Quote from: Solar on March 29, 2012, 04:38:34 PM
I doubt that's why people are stocking up, I know its not why I am.
I expect at least a 30% price increase on most items, stocking up is a good way to hedge against price increases.
Certainly is. How soon do you expect to see this minimum 30% price increase on most items?
Gold is generally believed to be a pretty good asset to acquire in advance of inlation, too. Especially hyper inflation, which we have never had and I predict will not have any time soon.
Quote from: elmerfudd on March 29, 2012, 05:29:11 PM
Certainly is. How soon do you expect to see this minimum 30% price increase on most items?
Gold is generally believed to be a pretty good asset to acquire in advance of inlation, too. Especially hyper inflation, which we have never had and I predict will not have any time soon.
I doubt gold is going to increase enough to warrant a major investment, its pretty much seen all the growth the mkt can handle.
Besides, you can't eat gold.
We keep a rotating stock of food stuffs, that so far has saved us a lot of money.
By buying in bulk early on, we have already seen an average of 3% increase across the board.
With the growing and harvest season coming on, coupled by major high fuel costs, you can bet everything you buy over the next year will reflect those costs as they are passed along to the end user.
Fudd, this is a no brainer, why is it you can't see the forest for the trees?
Quote from: Solar on March 29, 2012, 07:07:31 PM
I doubt gold is going to increase enough to warrant a major investment, its pretty much seen all the growth the mkt can handle.
Besides, you can't eat gold.
We keep a rotating stock of food stuffs, that so far has saved us a lot of money.
By buying in bulk early on, we have already seen an average of 3% increase across the board.
With the growing and harvest season coming on, coupled by major high fuel costs, you can bet everything you buy over the next year will reflect those costs as they are passed along to the end user.
Fudd, this is a no brainer, why is it you can't see the forest for the trees?
Just don't have your intellect, I guess. For which I am thankful.
Gold may have seen its peak in the current environment, but if there is double digit inflation, what then? You think gold will stay pat?
Quote from: elmerfudd on March 29, 2012, 07:24:10 PM
Just don't have your intellect, I guess. For which I am thankful.
Gold may have seen its peak in the current environment, but if there is double digit inflation, what then? You think gold will stay pat?
But you said we won't see double inflation?
Can't have it both ways ya know.
Your average citizen doesn't have the funds to enter that market, but more than likely will look for better ways to offset rising costs, hence his point about stocking up on food stuffs.
Personally I buy a thousand gallons of fuel at a time, we have already saved three hundred bucks by buying several months ago.
I could sell it at a profit if I were inclined, but will sit on it because the price will most likely hit $5.00+ per gallon before the summer is over.
You see, there are better investments than gambling on the mkt which may or may not pan out.
Like I said, you can't eat gold.
I'm on record in advising gold investment back before it started its rapid ascent, but I no longer think its a good deal.
Quote from: Solar on March 29, 2012, 07:48:40 PM
But you said we won't see double inflation?
Can't have it both ways ya know.
Your average citizen doesn't have the funds to enter that market, but more than likely will look for better ways to offset rising costs, hence his point about stocking up on food stuffs.
Personally I buy a thousand gallons of fuel at a time, we have already saved three hundred bucks by buying several months ago.
I could sell it at a profit if I were inclined, but will sit on it because the price will most likely hit $5.00+ per gallon before the summer is over.
You see, there are better investments than gambling on the mkt which may or may not pan out.
Like I said, you can't eat gold.
I'm on record in advising gold investment back before it started its rapid ascent, but I no longer think its a good deal.
Not trying to have it both ways. I don't think we'll see double digit inflation any time soon. But you do. So I was asking your opinion about gold IF we have double digit inflation. That's all. You answered it. I am not buying gold, either. Nor have I invested in a tank that will hold a thousand gallons of fuel.
Can't eat fuel, either. But you can sell it for a profit. Could sell gold, too, if it rises in value. If we have hyper inflation, it will rise in value. So will fuel.
Quote from: elmerfudd on March 30, 2012, 12:21:03 PM
Not trying to have it both ways. I don't think we'll see double digit inflation any time soon. But you do. So I was asking your opinion about gold IF we have double digit inflation. That's all. You answered it. I am not buying gold, either. Nor have I invested in a tank that will hold a thousand gallons of fuel.
Can't eat fuel, either. But you can sell it for a profit. Could sell gold, too, if it rises in value. If we have hyper inflation, it will rise in value. So will fuel.
No, I have no idea what's going to happen, if I did, I'd be the richest guy on the planet.
What I do know is, you invest in what will be in demand in the short term (year or two) and my choice was fuel.
I can either use it or barter with it, gold on the other hand may get rejected by the population if things were to get tough.
People won't have all that much disposable income, so gold will not be looking good for the average guy.
Ben Franklin was right when he said, "invest in what you can eat or burn".
Quote from: Solar on March 30, 2012, 01:53:33 PM
No, I have no idea what's going to happen, if I did, I'd be the richest guy on the planet.
What I do know is, you invest in what will be in demand in the short term (year or two) and my choice was fuel.
I can either use it or barter with it, gold on the other hand may get rejected by the population if things were to get tough.
People won't have all that much disposable income, so gold will not be looking good for the average guy.
Ben Franklin was right when he said, "invest in what you can eat or burn".
Your replies 1 and 6 seem to indicate that at one time you were pretty sure big time inflation was just around the corner. Now you have no idea?
Quote from: elmerfudd on March 31, 2012, 03:15:08 PM
Your replies 1 and 6 seem to indicate that at one time you were pretty sure big time inflation was just around the corner. Now you have no idea?
Only a fool would think otherwise.
As to the amount? Like I said, if I knew, I'd make millions.
Are you seriously trying to tell me the amount of debt accumulated under hussein, will come without consequences?
Do you think prices aren't going to escalate when the economy begins a serious recovery?
Quote from: Solar on March 31, 2012, 03:33:44 PM
Only a fool would think otherwise.
As to the amount? Like I said, if I knew, I'd make millions.
Are you seriously trying to tell me the amount of debt accumulated under hussein, will come without consequences?
Do you think prices aren't going to escalate when the economy begins a serious recovery?
No debt comes without consequences. The tripling of the debt under St. Ronald probably had some, too.
Prices will certainly rise when the economy recovers. A little inflation is actually a good thing. It's hyper inflation that's bad. Deflation is even worse, especially psychologically.
I just heard Wall Street had its best first quarter since 1998. Things must be looking up, huh?
Quote from: elmerfudd on March 31, 2012, 03:40:48 PM
No debt comes without consequences. The tripling of the debt under St. Ronald probably had some, too.
Prices will certainly rise when the economy recovers. A little inflation is actually a good thing. It's hyper inflation that's bad. Deflation is even worse, especially psychologically.
I just heard Wall Street had its best first quarter since 1998. Things must be looking up, huh?
So you think it will be a little?
What is a little?
And Wall st is more complicated than you think, much of it has to do with Europe's headache, thats why the big gain in financial.
However utilities took a big hit.
Most of this has little to do with consumer confidence, some, but little.
Quote from: Solar on March 31, 2012, 04:08:53 PM
So you think it will be a little?
What is a little?
And Wall st is more complicated than you think, much of it has to do with Europe's headache, thats why the big gain in financial.
However utilities took a big hit.
Most of this has little to do with consumer confidence, some, but little.
5%, 6% is a livable number.
Wall Street is more complicated than anybody thinks. It's irrational is what it is. Consumer spending is up even though incomes are relatively stagnant. Even my consumer spending is up a little, but that's only because the missus has decided to spend some of our savings on a few housing improvements. Not big stuff, just a few thousand bucks.
Quote from: elmerfudd on March 31, 2012, 04:44:01 PM
5%, 6% is a livable number.
Wall Street is more complicated than anybody thinks. It's irrational is what it is. Consumer spending is up even though incomes are relatively stagnant. Even my consumer spending is up a little, but that's only because the missus has decided to spend some of our savings on a few housing improvements. Not big stuff, just a few thousand bucks.
I don't know if thats livable, but it depends on unemployment numbers.
Though I agree, Wall st. is a rather poor gauge at anytime, unless its been stable for a longer period than a year.
Quote from: Solar on March 31, 2012, 04:53:20 PM
I don't know if thats livable, but it depends on unemployment numbers.
Though I agree, Wall st. is a rather poor gauge at anytime, unless its been stable for a longer period than a year.
The purchasing value of a dollar will never be constant. It wasn't even when we allegedly had "real money" (gold and silver). What cost 10 cents in 1800 would have cost 5 cents in 1900 and would have cost about a dollar in 2000. Although there were many ups and downs, it was not until World War II that what would have cost 10 cents in 1800 cost more than 10 cents.
Given that it won't be a static value, moderate inflation is better than deflation. Deflation is soul sapping and economy killing. And if the money supply does not increase, the economy cannot grow without causing deflation. If the money supply increases a tad too much, moderate inflation results. But everybody gets raises ("cost of living" maybe but still raises, which is better than a cost of living cut in times of deflation even though, economically, there should be no difference in the two) and people are encouraged to spend. Which fuels the economy. And interest rates on CD's will be above the inflation rate by about 3%, so investors will think they're making real money (getting 8% or better on their CD's). The trick is to keep it under 10%, preferably well under. And I think our federal reserve can do that. Not perfectly, but we're better off with a fed than we would be without one. It was killing the Bank of the United States by Andy Jackson that led, in large part, to the panic of 1837.
Link to an interesting (and accurate) inflation calculator.
http://www.westegg.com/inflation/infl.cgi (http://www.westegg.com/inflation/infl.cgi)
Of course, any measure of inflation is an approximation. It's hard to compare a market basket in 1800 to one in 2000. But this web-site uses historical data taken from the Department of Commerce as a basis, and that's the same source currently used to measure inflation.
It all depends on how quickly we see 6% inflation.
6% over a 10 year period is fine, but within a year is harmful.
Quote from: Solar on March 31, 2012, 05:39:13 PM
It all depends on how quickly we see 6% inflation.
6% over a 10 year period is fine, but within a year is harmful.
Maybe not as harmful as you think. Here's some historical data and links to the two sites I used to work it up:
Annualized rates of inflation between the years shown, as derived from playing around with numbers from the two links:
1940 -- 1980 – 4.5%
1950 – 1980 – 4.2%
1952 – 1960 – 1.5% (Eisenhower years)
And if you look at GDP, it didn't exactly boom during Eisenhower years. There was growth, but it wasn't a boom time, yet those are looked upon as the "good old days" by many. Not I, though. I grew up during those years and look back on them with fond memories, but I am a lot better off in every way than my parents were.
1960 – 1980 – 5.3%
1960 – 2010 – 4%
1940 – 2010 – 4%
1980 – 2010 – 3.75%
1975 – 1980 – 9% (basically the carter years)
1980 – 1988 – 4.7% (Reagan years)
1980 – 1992 – 4.5% (Reagan/Bush I years)
1992 – 2000 – 2.6% (Clinton years)
http://www.calculatorsoup.com/calculators/financial/future-value.php (http://www.calculatorsoup.com/calculators/financial/future-value.php)
http://www.westegg.com/inflation/infl.cgi (http://www.westegg.com/inflation/infl.cgi)
This is why I put the upper limit of "reasonable" inflation in the 5% to 6% range. 4% is better, of course, but almost 5% is what we had under Reagan and things weren't so bad, were they?
Quote from: elmerfudd on April 01, 2012, 03:28:29 PM
Maybe not as harmful as you think. Here's some historical data and links to the two sites I used to work it up:
Annualized rates of inflation between the years shown, as derived from playing around with numbers from the two links:
1940 -- 1980 – 4.5%
1950 – 1980 – 4.2%
1952 – 1960 – 1.5% (Eisenhower years)
And if you look at GDP, it didn't exactly boom during Eisenhower years. There was growth, but it wasn't a boom time, yet those are looked upon as the "good old days" by many. Not I, though. I grew up during those years and look back on them with fond memories, but I am a lot better off in every way than my parents were.
1960 – 1980 – 5.3%
1960 – 2010 – 4%
1940 – 2010 – 4%
1980 – 2010 – 3.75%
1975 – 1980 – 9% (basically the carter years)
1980 – 1988 – 4.7% (Reagan years)
1980 – 1992 – 4.5% (Reagan/Bush I years)
1992 – 2000 – 2.6% (Clinton years)
http://www.calculatorsoup.com/calculators/financial/future-value.php (http://www.calculatorsoup.com/calculators/financial/future-value.php)
http://www.westegg.com/inflation/infl.cgi (http://www.westegg.com/inflation/infl.cgi)
This is why I put the upper limit of "reasonable" inflation in the 5% to 6% range. 4% is better, of course, but almost 5% is what we had under Reagan and things weren't so bad, were they?
Now if you really want to compare the impact on the economy, compare that to GDP and I think you'll find even 4% could be disastrous in this economy.
Quote from: Solar on April 01, 2012, 03:46:18 PM
Now if you really want to compare the impact on the economy, compare that to GDP and I think you'll find even 4% could be disastrous in this economy.
Could be. History says it hasn't been in the past, but history is not always an accurate predictor of the future. It's frequently the best bet, though.
Quote from: elmerfudd on April 01, 2012, 05:41:55 PM
Could be. History says it hasn't been in the past, but history is not always an accurate predictor of the future. It's frequently the best bet, though.
I think were treading into unknown territory, I'm not sure, but I don't think our GDP/unemployment has been this bad ever.
Quote from: Solar on April 01, 2012, 06:29:32 PM
I think were treading into unknown territory, I'm not sure, but I don't think our GDP/unemployment has been this bad ever.
I think it has. 1930's as an example. 1840's as another. Seems like there was another pretty hard time in the late 1800's. Late 1950's, I think 1958 but didn't look it up, sticks in my remembrance as a recession era where GDP was not so hot and unemployment was relatively high. "The more things change, the more they stay the same."
Hmmmm, interesting, if you look at the charts, it appears we are in a depression.
I know, its a recession, but only because we have credit abd the ability to print money, which is eventually going to bite us in the ass.
Look at the two charts and compare it to todays numbers.
(https://conservativepoliticalforum.com/proxy.php?request=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fthumb%2Fd%2Fde%2FUS_GDP_10-60.jpg%2F310px-US_GDP_10-60.jpg&hash=d87c51ebde13457459af9e0cbd59c230661eac21)
(https://conservativepoliticalforum.com/proxy.php?request=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fthumb%2F5%2F58%2FUS_Unemployment_1910-1960.gif%2F310px-US_Unemployment_1910-1960.gif&hash=c0f24244e5c1bd501a1eccb9fd56bd7684dd4ea1)
Quote from: Solar on April 01, 2012, 06:57:50 PM
Hmmmm, interesting, if you look at the charts, it appears we are in a depression.
I know, its a recession, but only because we have credit abd the ability to print money, which is eventually going to bite us in the ass.
Look at the two charts and compare it to todays numbers.
(https://conservativepoliticalforum.com/proxy.php?request=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fthumb%2Fd%2Fde%2FUS_GDP_10-60.jpg%2F310px-US_GDP_10-60.jpg&hash=d87c51ebde13457459af9e0cbd59c230661eac21)
(https://conservativepoliticalforum.com/proxy.php?request=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fthumb%2F5%2F58%2FUS_Unemployment_1910-1960.gif%2F310px-US_Unemployment_1910-1960.gif&hash=c0f24244e5c1bd501a1eccb9fd56bd7684dd4ea1)
I don't see unemployment at excess of 20%. And I don't think a 16 trillion GDP is exactly indicative of a depression, even when adjusted for inflation.
Quote from: elmerfudd on April 01, 2012, 07:18:03 PM
I don't see unemployment at excess of 20%. And I don't think a 16 trillion GDP is exactly indicative of a depression, even when adjusted for inflation.
They've changed the way they calculate unemployment numbers.
Notice how they never seem to get above 9.9%, even though most states are suffering even more.
Quote from: Solar on April 01, 2012, 07:23:00 PM
They've changed the way they calculate unemployment numbers.
Notice how they never seem to get above 9.9%, even though most states are suffering even more.
Balderdash
http://mollysmiddleamerica.blogspot.com/2011/02/how-unemployment-rate-is-calculated.html (http://mollysmiddleamerica.blogspot.com/2011/02/how-unemployment-rate-is-calculated.html)
Quote from: elmerfudd on April 01, 2012, 07:31:35 PM
Balderdash
http://mollysmiddleamerica.blogspot.com/2011/02/how-unemployment-rate-is-calculated.html (http://mollysmiddleamerica.blogspot.com/2011/02/how-unemployment-rate-is-calculated.html)
You're right, your point is BS.
From yyour link:
"The 99ers (people who have exhausted all of their unemployment benefits and no longer receive unemployment benefits)
are counted as unemployed if they are still looking for work."
How does the Gov know they're still looking for work, unless they continue to go to an unemployment office?
Would you go if your benefits had run out?
Aside the fact that unemployment insurance didn't start till 7 years into the great depression.
Quote from: Solar on April 01, 2012, 08:03:36 PM
You're right, your point is BS.
From yyour link:
"The 99ers (people who have exhausted all of their unemployment benefits and no longer receive unemployment benefits) are counted as unemployed if they are still looking for work."
How does the Gov know they're still looking for work, unless they continue to go to an unemployment office?
Would you go if your benefits had run out?
Aside the fact that unemployment insurance didn't start till 7 years into the great depression.
You didn't read the link. It's based on a survey, not trips to the unemployment office. And when there WAS a "change," it resulted in a higher unemployment rate than the previous method did. Probably more accurate, too.
Quote from: elmerfudd on April 01, 2012, 08:18:57 PM
You didn't read the link. It's based on a survey, not trips to the unemployment office. And when there WAS a "change," it resulted in a higher unemployment rate than the previous method did. Probably more accurate, too.
Oh I read it, its also biased.
You missed the part where they didn't even count until 1938, when the recession was nearly over.
Quote from: Solar on April 02, 2012, 07:12:29 AM
Oh I read it, its also biased.
You missed the part where they didn't even count until 1938, when the recession was nearly over.
I know. Anything that comes to a conclusion with which you disagree is always "biased."
Quote from: elmerfudd on April 02, 2012, 01:53:49 PM
I know. Anything that comes to a conclusion with which you disagree is always "biased."
And you never do that? :rolleyes:
Quote from: elmerfudd on April 04, 2012, 11:12:03 AM
Nope.
Virtually your every post is filled with bias.
Thanks for playing...
Quote from: Solar on April 04, 2012, 11:43:22 AM
Virtually your every post is filled with bias.
Thanks for playing...
Shouldn't be too hard to point to examples, then.
Quote from: elmerfudd on April 04, 2012, 11:57:59 AM
Shouldn't be too hard to point to examples, then.
It wasn't, your very last post is a perfect example.
He may not be lying. You don't know whether he is or not. And racism is in the eye of the beholder. The Southern Baptist Convention was created in the 1840's by a group of believing Christians who also believed human slavery based on skin color was okay. Were they "racists?" I did not attend the same church Obozo did and have only heard carefully selected excerpts from sermons of the good reverend (his name escapes me just now). I am also white, but grew up in a segregated "but equal" south. All that so say this. I am not so sure that, if I were a black person, and given the history of this country toward persons of color, I might not harbor what the average white guy would say is a "racist" attitude myself. And I still might be a Christian.
Quote from: Solar on April 04, 2012, 12:14:02 PM
It wasn't, your very last post is a perfect example.
He may not be lying. You don't know whether he is or not. And racism is in the eye of the beholder. The Southern Baptist Convention was created in the 1840's by a group of believing Christians who also believed human slavery based on skin color was okay. Were they "racists?" I did not attend the same church Obozo did and have only heard carefully selected excerpts from sermons of the good reverend (his name escapes me just now). I am also white, but grew up in a segregated "but equal" south. All that so say this. I am not so sure that, if I were a black person, and given the history of this country toward persons of color, I might not harbor what the average white guy would say is a "racist" attitude myself. And I still might be a Christian.
You wouldn't know bias if it walked up to you and slapped you upside the head with a wet dishrag. As I said in another post, your thought processes have not evolved much since you were about 11 years old. You remind me of a guy I know who has a PhD in something, about whom it is said "you will never meet anybody who got any less benefit from a higher education than he did in terms of broadening his mind."
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?
What makes you think that the money supply (m0) will remain the same?