The Big Inflation Scare - Oooooh, How Scary; Prove Him Wrong

Quote from drsteph:



Deflationary.
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Yup.


With the exception of Oil and Gold and the mysterious stock market that rallies 170 points into the close every day, what is actually inflating?

It seems to me that the only things that are inflating are the vehicles people have chosen as 'Inflation Trades'.
 
Quote from sprstpd:

My food and health care costs are plummeting - must be deflation!
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Funny, my health care costs actually went down by 100% last year. (see The Alberta Government elminated Health Care Premiums in 2008.) :D
 
A weak dollar will cause everything imported or priced in dollars to become more expensive, like oil and gold. Houses and high ticket items will still deflate though, along with any asset currently on U.S. soil, so we'll have the worst of both worlds. Eventually high energy costs will drive up the price of everything, but we'll have lower wages (over supply of labor force), lower house prices, and higher gas and food prices. We'll actually have to start producing things in our own country to bring costs down...a natural correction of everything that's out of whack in the U.S.
 
Quote from Broken_Trades:

Yup.


With the exception of Oil and Gold and the mysterious stock market that rallies 170 points into the close every day, what is actually inflating?

It seems to me that the only things that are inflating are the vehicles people have chosen as 'Inflation Trades'.
More...

Just got a notice in my phone bill that Verizon has applied for a rate increase - roughly 10% on each "extra" service (call waiting, caller id, etc.) and 4% on basic service.

Compared my car insurance with the bill from 6 months ago. You would think with my car now older (its a 2008) and depreciating, rates should go down. But they are actually up slightly over 6 months ago. I have had no accidents, tickets, or other changes that should affect my policy cost.

When I buy groceries, prices are up, with often creative ways to charge more. For example, I used to buy V8 juice in a can because it was much cheaper per ounce than the bottles. Now I see that not only are the cans no longer available, but the price on the plastic bottles has increased even more.

I know the sizes of many small snack items have decreased, because I monitor my calorie intake and I see many things, sold in the same package as before, with now 10 to 15% fewer calories.

At work, this year my prescription deductable increased and my portion of the insurance payments (which is a percentage of their cost) has increased.

I took the same trip as a year ago to visit relatives this month. Same exact time of the year; one day different from last year. I booked my airline tickets back in February. Despite the fact that oil prices are down 35% from this time last year (and were down more than that when I purchased my tickets), the flight ended up costing me more than last year after I paid the new luggage fees. Likewise, after shopping around for the best rates, the cost of my rental car was 2% higher than for the exact same period last year.

Didn't stamp prices just go up 5% this month?

I think I have cited a good number of cases of price increases here. I would like to see someone cite a similar number of price decreases for things that the average consumer buys regularly. I don't think anyone will be able to do it. If that is the case, then I think my argument that inflation is already occurring is solid. Which is not to say of course that inflation is not going to get much, much worse in the future.

Bettles
 
Quote from Dr. Zhivodka:

Ok...fine. I'm not arguing the validity of govi numbers. I distrust the govi as much or more than the next guy.

But to "maintain" wealth TIPS are a pretty good solution right now.
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I think historically commodities are a better hedge than TIPS against inflation.
 
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