Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

[WildspitzE]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

more....
http://online.wsj.com/article/SB1000...820515056.html

"Hershey Co. increased wholesale prices for most of its products, saying the move will help offset a significant rise in raw material, fuel and other expenses.

The candy maker said a weighted-average price increase of about 9.7% across the company's instant consumable, multipack, packaged candy and grocery lines took effect Wednesday.

..."

[metalman]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

more....
http://online.wsj.com/article/SB1000...820515056.html

"Hershey Co. increased wholesale prices for most of its products, saying the move will help offset a significant rise in raw material, fuel and other expenses.

The candy maker said a weighted-average price increase of about 9.7% across the company's instant consumable, multipack, packaged candy and grocery lines took effect Wednesday.

..."

where oh where did all the deflation fear mongers go?

what world we live in... where central banks can create $$$ at will but there is a 'case' for deflation.

next... your kids in prison or fodder in war... & a 'case' for imprisoning or drafting them.

we're so fucked.

[Chris Coles]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

we're so fucked.

Well now, let us place ourselves at the end of say, one of the major US Civil War Battles and even more so, on the losing side and ask what happened?

What happened is that, when the dust finally settled, everyone got up, dusted themselves down and got on with "it". Not long afterwards, the US was a power house of industrial muscle.

OK, negative thinking has its place; but for heavens sake, get up off the ground, dust yourselves down and get on with it.

[jk]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

more....
http://online.wsj.com/article/SB1000...820515056.html

"Hershey Co. increased wholesale prices for most of its products, saying the move will help offset a significant rise in raw material, fuel and other expenses.

The candy maker said a weighted-average price increase of about 9.7% across the company's instant consumable, multipack, packaged candy and grocery lines took effect Wednesday.

..."

ej's title piece for this thread is "inflation is a process". that process is inexorable, baked in the cake. we've been documenting it on this website for years now. we can continue to watch and document, but we can't change the process. i don't know whether to laugh or cry.

[metalman]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

ej's title piece for this thread is "inflation is a process". that process is inexorable, baked in the cake. we've been documenting it on this website for years now. we can continue to watch and document, but we can't change the process. i don't know whether to laugh or cry.

& ej stuck with the 'inflation is a process' mantra thru thick & thin.

but... hey... ben can stop it in 15 min. by hiking rates...

[c1ue]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

ej's title piece for this thread is "inflation is a process". that process is inexorable, baked in the cake. we've been documenting it on this website for years now. we can continue to watch and document, but we can't change the process. i don't know whether to laugh or cry.

My thesis from the very beginning has been much more negative than EJ/iTulip's - and my justification is much as what you wrote in your excellent post in "Guest Commentary": that the so-called leaders both in power now and in a position to be in power do not have either the vision, the will, or the personality to implement necessary painful changes.

As the situation worsens, the pain to fix it increases.

The optimists I know all have placed their faith in some magical 'turning point' where suddenly all the morons, crooks, and charlatans will suddenly change.

I, as a student of history, expect no change except the worst possible outcome due to inaction and ineptitude.

Riding the Titanic down is by far the most common outcome.

This doesn't mean Somalia, but it does mean at least a 30% drop in American standard of living.

And while there has been a cogent point raised that this fall doesn't equate to starvation nor physical pain - thus literal pitchforks and torches are unlikely, at the same time this doesn't prevent the rise of a demagogue. Insert your own example here.

[jk]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

My thesis from the very beginning has been much more negative than EJ/iTulip's - and my justification is much as what you wrote in your excellent post in "Guest Commentary": that the so-called leaders both in power now and in a position to be in power do not have either the vision, the will, or the personality to implement necessary painful changes.

As the situation worsens, the pain to fix it increases.

The optimists I know all have placed their faith in some magical 'turning point' where suddenly all the morons, crooks, and charlatans will suddenly change.

I, as a student of history, expect no change except the worst possible outcome due to inaction and ineptitude.

Riding the Titanic down is by far the most common outcome.

This doesn't mean Somalia, but it does mean at least a 30% drop in American standard of living.

any ideas about how to measure this? fwiw i keep following the consumer metrics institute indicator, which has been going down for the past 1.3-1.5 years. this is a measure of discretionary consumer durable expenditures over the internet, and appears to track a very vulnerable population in current circumstances. by virtue of the word "discretionary," it is looking at the icing, not the cake. and the icing is disappearing.

And while there has been a cogent point raised that this fall doesn't equate to starvation nor physical pain - thus literal pitchforks and torches are unlikely, at the same time this doesn't prevent the rise of a demagogue. Insert your own example here.

this is perhaps my worst fear.

[c1ue]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

any ideas about how to measure this? fwiw i keep following the consumer metrics institute indicator, which has been going down for the past 1.3-1.5 years. this is a measure of discretionary consumer durable expenditures over the internet, and appears to track a very vulnerable population in current circumstances. by virtue of the word "discretionary," it is looking at the icing, not the cake. and the icing is disappearing.

This is the problem.

As we've all experienced in the past decade plus since the Y2K internet bubble, the definition of suffering is a function of future expectations.

Even as people were paying unprecedented rent for housing in 2000, the overall mood was upbeat because there was at least an outward appearance of present and future prosperity whether stock option IPO or jobs as HTML cowboys.

The same could have been said for all those people who bought too much house in the 2004-2007 housing bubble - the gigantic nut being paid monthly was just fine in the context of 'housing prices always go up' and the Joneses selling their house for twice what they paid 4 years ago.

The challenge now is how to quantify the shift in attitude now that there aren't overt measures of prosperity: stock market has been flat to down for years. Housing ditto. Outside of Apple/Facebook/Twitter, tech as well.

Does this then magnify the increased costs for gasoline, food, taxes, health care?

Is there a tipping point?

I have no reliable and concrete ways to quantify this, but my observation of the public and those around me shows a definite shift towards the 'Dark Side'.

My view from history is that the shift into negativity will in turn magnify extremism - whether in politics or other fields. As time and inflation progresses, this will reinforce this trend.

The question then is when/if it will flip the inherent American faith in equal opportunity, rule of law, the democratic process, and so forth into their 'Dark Side' equivalents: lick up and kick down, do unto others what the law can't do unto you, and 'a pox on both their houses'.

[tastymannatees]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

any ideas about how to measure this? fwiw i keep following the consumer metrics institute indicator, which has been going down for the past 1.3-1.5 years. this is a measure of discretionary consumer durable expenditures over the internet, and appears to track a very vulnerable population in current circumstances. by virtue of the word "discretionary," it is looking at the icing, not the cake. and the icing is disappearing.


this is perhaps my worst fear.

Mine also.

I read a year or so ago that the median household had 18 days of operating cash available. 2X food and gas expenditures, oil heat, indirect tax increases, increased insurance costs etc. Margins are getting thinner, more so each day and I wonder how that has changed since

Anecdotally I see the stress in acquaintances and the old people picking up the return bottles for cash near my office and at the supermarket with shopping carts only filled with low cost essentials. It's like watching Night of the Living Dead, disturbing to say the least as a sort of slow motion rotting of people lives.

Seems to me to be one of the key points going forward is when the median icing disappears entirely and eating beans and rice and still not making it is probably the inflection point for the big kahuna. EJ has more faith that things will be managed reasonably down so the dollar is at .040 from the$ current 0.75 as a target. My unsupported intuition is we will overshoot and end up more like $0.25-0.30 as the FED money justs keeps flowing.

In any event just working on EJ's projections and the 18 Days median operating capital is valid the median line goes to a day by day basis and when(if) this happens you may see the "literal pitchforks and torches". I believe this little micro point is overlooked in most economic analysis and provides a major clue for a political tipping point in this crisis.

[Chris Coles]

Re: Inflation is a process, not an event - Part I: Three inflation fallacies - Eric Janszen

Seems to me to be one of the key points going forward is when the median icing disappears entirely and eating beans and rice and still not making it is probably the inflection point for the big kahuna. EJ has more faith that things will be managed reasonably down so the dollar is at .040 from the$ current 0.75 as a target. My unsupported intuition is we will overshoot and end up more like $0.25-0.30 as the FED money justs keeps flowing.

In any event just working on EJ's projections and the 18 Days median operating capital is valid the median line goes to a day by day basis and when(if) this happens you may see the "literal pitchforks and torches". I believe this little micro point is overlooked in most economic analysis and provides a major clue for a political tipping point in this crisis.

And this is why I keep to my own mantra; that the only way forward, out of this dilemma, is to address the lack of prosperity at the grass roots of society. Moreover, others have repeatedly tried to do that with all sorts of government expenditure, but no one so far has tried to do it by the capitalisation of new job creation. Watch this space. .....