Where the HELL is the inflation?

[flintlock]

Re: Where the HELL is the inflation?

Inflation is inevitable. The factors leading to it can be far off in the future, but long term contracts, bonds, etc, and the markets will know this and begin to factor it in sooner than you think. All anyone has to do is look at the govt deficits to know we are in an impossible situation.

Who cares about the short term unless you only plan on living a few more years? Unless you are properly positioned against inflation that comes later, any short term gains now will evaporate.

At some point people need to push away from the table of charts, graphs and historical data and use some common sense. If it was just as simple as using the FED to print money to get out of this mess, then they'd give us all a million dollars and we'd all be rich and live happily ever after.

Perhaps inflation will show up in official CPI figures later than EJ predicts. Does that really matter in the long run?

I don't think there is a solution to this, but even if there was, It would have to be radical, which I see no sign of at this point.

[sishya]

Re: Where the HELL is the inflation?

sishya,

I don't believe that EJ and the gang forgot or ignored the effect of demographics on inflation. There are simply other factors that are going to be the cause of the inflation, even to the point of overwhelming any underlying deflationary affects caused by less demand. I'd suggest you heed EJ's prediction and prepare yourself for a fairly severe inflation ahead (in prices, not in wages).

I have some physical gold as protection only. But I will sense Inflation when it will come, unless it is a currency event. I just wanted to point that EJ never mention population aging in any of his articles, like Japan, Europe.

Again pointing to deflation - I went to eat out here at Applebee's, 3 adults, 1 child and ordered the 2 for $20 dinner enough for all of us. more than enough for us - ribs, shrimp, appetizer. Applebee's was crowded just like all the restaurants that are offering great deflationist deals. Dinner menus in my town for $4.99, Breakfast for $2.99(without drinks). With deals like these, I expect the economy pick up a bit. Now where is the Inflation many are saying ? is it going to be on a flip of a switch ? Let's see.

[flintlock]

Re: Where the HELL is the inflation?

I have some physical gold as protection only. But I will sense Inflation when it will come, unless it is a currency event. I just wanted to point that EJ never mention population aging in any of his articles, like Japan, Europe.

I think that's a good point you bring up and something I need to do more thinking about. But won't an older population consume more scarce and expensive health care, driving inflation in at least that segment?

[charliebrown]

Re: Where the HELL is the inflation?

really?? Applebee's?? I would expect more like $75 for this meal. I'll check there pricing and eat there more often if it is true. If it is ture maybe I'm going to short applebee's too.

2 adults and 2 kids at McD cost me 21.00 last time I was there. 2 premium salads with drinks and two happy meals, and a bag of cookies.

[cindykimlisa]

Re: Where the HELL is the inflation?

Something to consider about "inflation"

I have seen an almost instant correlation to price at the grocery store with a rise and a decrease in oil/gasoline price over the last year. This was especially true when gas ticked up around May 2009: so did the grocery prices. As the price of gas dropped down so did the price of many groceries.

This is actually true with gas. One day oil is $60 a barrell and the next day it is $65 a barrell. At the pump at 8:pm the first day gas is $2.50 a gallon. By noon the next day everybody has raised gas to $2.75. Is that poom or manipulation or something else. By the way is it de-poom when oil goes down and the price of gas goes back down to $2.50?

So if gasoline goes to $4.50 a gallon then we have instant Poom in places. But if gas holds around $70 then poof might be more like it. Unless in fact someone believes that prices for things like energy and anything that needs to be shipped by truck is just going to go up in price for another good reason.

[cindykimlisa]

Re: Where the HELL is the inflation?

Correction above; if "oil" holds around $70 a barrel and gas holds around $2.50.

[flintlock]

Re: Where the HELL is the inflation?

Something to consider about "inflation"

I have seen an almost instant correlation to price at the grocery store with a rise and a decrease in oil/gasoline price over the last year. This was especially true when gas ticked up around May 2009: so did the grocery prices. As the price of gas dropped down so did the price of many groceries.

This is actually true with gas. One day oil is $60 a barrell and the next day it is $65 a barrell. At the pump at 8:pm the first day gas is $2.50 a gallon. By noon the next day everybody has raised gas to $2.75. Is that poom or manipulation or something else. By the way is it de-poom when oil goes down and the price of gas goes back down to $2.50?

So if gasoline goes to $4.50 a gallon then we have instant Poom in places. But if gas holds around $70 then poof might be more like it. Unless in fact someone believes that prices for things like energy and anything that needs to be shipped by truck is just going to go up in price for another good reason.

I noticed the same correlation. Oil seems to be the Mack Daddy in the economy these days.

[metalman]

Re: Where the HELL is the inflation?

I noticed the same correlation. Oil seems to be the Mack Daddy in the economy these days.

Janszen: Where is this inflation coming from? Current economic orthodoxy asserts that wage inflation is the root cause.
Mayer: I'm not a believer in NAIRU. Greenspan told me he can't understand why I don't believe in NAIRU (Non-Accelerating Inflation Rate of Unemployment) as a valid economic principle but I think the problem is plain. NAIRU says that wages drive inflation. But my observation is that this is not the case. Higher prices never start with wage earners getting higher wages. Wage earners demand higher wages in response to higher prices. The cycle starts with the prices of things wage earners buy, such as gasoline. That's happening today and has been going on for a while, and that's why I believe there's more inflation risk than the markets perceive and why the Fed will keep raising rates.

Martin Mayer - Banking Expert may 2007

[sishya]

Re: Where the HELL is the inflation?

I think that's a good point you bring up and something I need to do more thinking about. But won't an older population consume more scarce and expensive health care, driving inflation in at least that segment?

No, I don't think so. As people age, they use less housing(downsize), food, energy etc. only medical costs go up. So with all these excess capacity how can it cause inflation,there is less demand, unless FED's handout money like poor countries. They are so far not doing. I think Russia has very dark future because of their poor population growth. Anyway Demographics is only one parameter.

Inflation is already happening in Healthcare, because of this demographics and ambulance chasers.

[cjppjc]

Re: Where the HELL is the inflation?

Something to consider about "inflation"

I have seen an almost instant correlation to price at the grocery store with a rise and a decrease in oil/gasoline price over the last year. This was especially true when gas ticked up around May 2009: so did the grocery prices. As the price of gas dropped down so did the price of many groceries.

This is actually true with gas. One day oil is $60 a barrell and the next day it is $65 a barrell. At the pump at 8:pm the first day gas is $2.50 a gallon. By noon the next day everybody has raised gas to $2.75. Is that poom or manipulation or something else. By the way is it de-poom when oil goes down and the price of gas goes back down to $2.50?

So if gasoline goes to $4.50 a gallon then we have instant Poom in places. But if gas holds around $70 then poof might be more like it. Unless in fact someone believes that prices for things like energy and anything that needs to be shipped by truck is just going to go up in price for another good reason.

Stations get the prices from their suppliers. The amount the station paid for the gas in their tanks is not relevant. They are told what the price will be on the next delivery. I see lots of stations that lower prices every day. They also raise prices every day. I actually buy gas by watching the oil market. If oil is weak I wait a day or two to buy.