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Inflation out of control
- Thread starter detective
- Start date
Quote from detective:
The only solution is to get very rich. The poor are the ones that really suffer during inflation. The wealth inequality just gets bigger.
Easier said than done, though, wouldn't you agree?
And yes, you do have to hold your nose at these prices. Only scary thing is that with plat at 2100+, gold is looking cheap!
Quote from detective:
Looking at the commodity markets every day, am I the only one who thinks inflation is about to get totally out of control in the not too distant future? The Fed has always been behind the curve, especially when it comes to inflation throughout history. With the coming surge in inflation, I don't see how the masses won't revolt unless they get their food stamps and I'm sure the government will find a way to make gas stamps and all kinds of other socialistic ways to placate the poor.
The Fed has just pumped out too many dollars and it is coming home to roost when people realize that oil/gold/platinum are the only real stores of value. With extreme negative real interest rates, people are idiots for buying bonds or holding cash.
What is the reason why extreme negative real interest rates as u put it looking ahead will not bring down inflation I would have thought when cash and bonds yields nothing investing to increase capacity would make sense. Sure there might not be demand for anything but oil/gold etc but then inflation will not be a problem.
Quote from Voodoo-king:
What is the reason why extreme negative real interest rates as u put it looking ahead will not bring down inflation I would have thought when cash and bonds yields nothing investing to increase capacity would make sense. Sure there might not be demand for anything but oil/gold etc but then inflation will not be a problem.
Historically that didn't work out too well - production expanded to meet demand but there was little interest in quality, etc... marginal business activities (mines, factories) were made possible/profitable due to the inflationary effects but once things stablized/reverted to the mean they were useless with much being written off.
c.f. The great disorder
http://www.amazon.com/Great-Disorde...bs_sr_1?ie=UTF8&s=books&qid=1203452588&sr=8-1
The powers that be have a vested interest in keeping inflation numbers low.
The labour market keys off government inflation stats as a benchmark for wage hikes.
When wages meet inflation, swindling the nations saved income to the tune of 2-4% per year becomes impossible for Government. We're talking about an absolutely vast, off-budget "revenue" stream that simply dries up.
Second, when price inflation is validated by wage inflation you get the beginnings of 1970's-style stagflation. This is a harbringer of recession - very bad for politicians and the health of the economy in general.
The path of least resistence is folowed - proclaim things are great, rob the taxpayers and economy stays in the black (in theory).
The labour market keys off government inflation stats as a benchmark for wage hikes.
When wages meet inflation, swindling the nations saved income to the tune of 2-4% per year becomes impossible for Government. We're talking about an absolutely vast, off-budget "revenue" stream that simply dries up.
Second, when price inflation is validated by wage inflation you get the beginnings of 1970's-style stagflation. This is a harbringer of recession - very bad for politicians and the health of the economy in general.
The path of least resistence is folowed - proclaim things are great, rob the taxpayers and economy stays in the black (in theory).
Mike Shedlock offers a very insightful perspective about inflation in this interview:
http://www.doctorhousingbubble.com/
"Mish" as he's called is well-respected for his analysis of macroeconomic trends.
RT
http://www.doctorhousingbubble.com/
"Mish" as he's called is well-respected for his analysis of macroeconomic trends.
RT
Quote from intradaybill:
Yes, because you do not know what inflation means. Commodity prices rising is neither sufficient nor necessary for inflation.
Bill
Of course you are talking about monetary inflation while the others are referring to price inflation. It's unfortunate that the same word is used for two different things.
Gene Epsteins article in barrons was a nice little recap of money, credit and the gold standard. Greenspan was once a gold bug. When governments can issue unlimited money and credit, and deficit spend at the expense of future growth there is a real problem. This whole thing has to keep inflating just so it doesnt blow itself up