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
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.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.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.

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.

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

Quote from: elmerfudd on April 01, 2012, 07:31:35 PM
Balderdash

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."