Wheres the inflation?

[Slimprofits]

Re: Wheres the inflation?

define value. CNOOC was political. Chinese investors have put a shitload of money into U.S. companies and properties over the last 5 years...

[bobola]

Re: Wheres the inflation?

Candy bars in the vending machine in our office recently went from $.85 to $1.00.

That's a 17% increase overnight.

[charliebrown]

Re: Wheres the inflation?

I believe the equation is PQ = MV where the P=price, Q=quantity, M=money supply and V= velocity.
In this enviroment, money supply has exploded, velocity has crashed. Thus prices are roughly the same.
I think EJ has been saying Q will diminsh thus P will increase.

Anecdotal evidence does suggest a reduction in quality in goods. My 15 yr old dryer broke this spring. I think I paid 350 for it then. The repair man quoted me 250 to fix it. It needed a new motor. New dryer was 450 at Home Depot, but when I looked at it was "cheesy" thin metal, much more plastic parts that did not look durable. I hurried home and called the repair man. My dryer with a new motor is much better than the new ones.

[bart]

Re: Wheres the inflation?

USDA Normalized Price Estimates, National Level1
http://www.ers.usda.gov/Data/normali...natlprices.xlx
Commodity	2004	2005	2006	2007	2008	2009	2006-2009 change	2007-2009 change
Wheat, all types (bushels)	$2.84	$2.99	$3.16	$3.31	$3.61	$4.19	32.6%	26.6%
Rye (bushels)	2.71	2.80	2.99	3.13	3.22	3.56	19.1%	13.7%
Rice (cwt)	5.88	5.71	5.98	6.36	7.50	9.16	53.2%	44.0%
Corn for grain (bushels)	2.00	2.09	2.12	2.15	2.37	2.74	29.2%	27.4%
Oats (bushels)	1.33	1.41	1.48	1.60	1.65	1.82	23.0%	13.8%
Barley (bushels)	2.22	2.39	2.48	2.56	2.68	2.94	18.5%	14.8%
Sorghum grain (cwt)	3.34	3.59	3.64	3.68	4.16	4.79	31.6%	30.2%
Hay, all types, baled (tons)	86.70	86.88	90.20	92.92	95.62	102.74	13.9%	10.6%
Dry beans (cwt)	18.22	18.10	19.76	20.36	20.36	22.70	14.9%	11.5%
Sugarbeets (tons)	37.12	38.12	38.06	40.24	41.12	41.58	9.2%	3.3%
Sugarcane for sugar (tons)	27.32	27.76	28.30	28.72	29.00	29.24	3.3%	1.8%
Cotton, lint, upland (pounds)	0.47	0.47	0.47	0.45	0.48	0.51	8.5%	13.3%
Tobacco (pounds)	1.87	1.90	1.93	1.90	1.84	1.79	-7.3%	-5.8%
Cottonseed (tons)	103.00	100.60	104.30	102.30	106.20	118.40	13.5%	15.7%
Soybeans for beans (bushels)	4.87	5.35	5.55	5.73	6.14	7.05	27.0%	23.0%
Peanuts, for nuts (pounds)	0.24	0.22	0.21	0.19	0.18	0.19	-9.5%	0.0%
Flaxseed (bushels)	4.46	4.63	5.46	5.99	6.29	7.74	41.8%	29.2%
Apples, all commercial (pounds)	0.18	0.19	0.18	0.17	0.18	0.20	11.1%	17.6%
Oranges, all types (boxes)	6.20	5.79	5.81	6.12	6.63	7.79	34.1%	27.3%
Grapefruit, all types (boxes)	5.19	5.22	5.14	7.09	8.54	8.85	72.2%	24.8%
Potatoes (cwt)	6.01	6.07	6.04	6.45	6.52	6.69	10.8%	3.7%
Sweet potatoes (cwt)	16.06	16.84	16.82	17.36	17.94	18.24	8.4%	5.1%
Steers and Heifers (cwt)	69.44	72.82	76.60	82.78	86.22	91.28	19.2%	10.3%
Cows for slaughter (cwt)	59.90	87.70	67.20	44.62	45.76	47.88	-28.8%	7.3%
Calves (cwt)	94.58	99.22	105.50	111.68	117.08	121.60	15.3%	8.9%
Sheep (cwt)	31.74	32.60	34.10	36.32	36.44	37.10	8.8%	2.1%
Lambs (cwt)	73.44	77.86	83.16	89.28	95.00	99.98	20.2%	12.0%
Hogs (cwt)	36.94	37.50	41.30	42.90	43.20	45.86	11.0%	6.9%
Milk (cwt)	13.90	13.31	13.66	14.22	13.80	15.79	15.6%	11.0%
Broilers, commercial (pounds)	0.36	0.35	0.37	0.39	0.38	0.41	10.8%	5.1%
Turkeys (pounds)	0.39	0.39	0.39	0.40	0.40	0.48	23.1%	20.0%
Eggs (dozens)	0.63	0.64	0.66	0.64	0.63	0.69	4.5%	7.8%
Wool (pounds)	0.44	0.47	0.55	0.63	0.69	0.63	14.5%	0.0%
1/ Prices for crops and milk are for marketing years; for livestock and wool, calendar years.

[WildspitzE]

Re: Wheres the inflation?

Sorry EJ, but am losing a bit faith here mate.............i expect to see "Signs"...by Now you know + $100 oil + $1300 Gold........
Mike

where is it? signs?

check your tp.

http://www.itulip.com/forums/showthr...554#post169554

[charliebrown]

Re: Wheres the inflation?

ouch ag prices have really shot up haven't they. Looks like I should be eating more PB&J.

[bart]

Re: Wheres the inflation?

Electricity rates since 1996 from the EIA.

[MarkL]

Re: Wheres the inflation?

Neither of you is "wrong." The definitions of words change over time, as determined by the "vast majority" whether you give a whit or not. Today more people tend to define inflation and deflation in terms of a general increase or decrease in the prices of goods which is why Websters and other Dictionaries are picking that definition up. CPI and PPI going up means inflation.

If you want to be an economist and define the words as money supply... feel free. Just explain yourself so everybody knows what you're talking about.

Best yet, here on iTulip, be explicit about what you mean... otherwise somebody is sure to misinterpret your words.

[Jay]

Re: Wheres the inflation?

ouch ag prices have really shot up haven't they. Looks like I should be eating more PB&J.

Have you thought about cows for slaughter? I hear they are quite good.

[jpatter666]

Re: Wheres the inflation?

Actually a nice discussion on deflation on The Automatic Earth http://theautomaticearth.blogspot.co...ed-studio.html

They are *serious* deflationists, but I read them (along with Rosenberg, etc) to hear the other side of the story. I trust iTulip, but at times I find the "no deflation, end of story, we ain't discussing it anymore" mantra disturbing. In economics, I've finally learned that absolute certainty most times leads to eventual disaster so I worry about that. Maybe paranoia on my part, but hey, to each their own.

In the comments section I asked why they were so *certain* (it's the anti-EJ!) on deflation given that the Fed has said they would print. This is the answer I got:

I follow Fleckenstein and another site called iTulip -- both of which are just as certain that the outcome will be inflationary because the Fed wants it that way. Don't fight the Fed they used to say.

Why do you think the Fed *can't* cause inflation if it wants?

Some people have way too much faith in the power of governments and central bankers to get what they want, as if they could wave a magic wand and make it happen. If that were so, why would there ever be financial crises?

The bond market has far more power than central authorities because it represents the power of the collective - power resulting from the aggregate sum of millions and millions of self-interested short-term decisions. When all those decisions are made in the same direction at the same time, the effect is unstoppable. That's why markets can crash no matter what kinds of doomed interventions may be employed.

In the case of money-printing, if a country tried that it would find its interest rate (set by the bond market) skyrocketing very quickly, which would precipitate a wave of debt default, which would be deflation by definition. There's no way out of deflation once a vast quantity of excess claims to underlying real wealth has been created, and we have created the largest such pool of virtual wealth in human history.

[LargoWinch]

Re: Wheres the inflation?

Financial crises and the power to create inflation are two very different things. The explanation is without merit and baseless.


It is like saying; "you put too much faith in government, if so there would be no car crashes, hence there is no way that taxes can ever cause the price of gasoline to increase".


iTulip even has a picture to boot:

[jpatter666]

Re: Wheres the inflation?

Financial crises and the power to create inflation are two very different things. The explanation is without merit and baseless.


It is like saying; "you put too much faith in government, if so there would be no car crashes, hence there is no way that taxes can ever cause the price of gasoline to increase".


iTulip even has a picture to boot:

Didn't say I agreed with it -- although I do think the point concerning the bond market has some merit and I'd like to see discussion about that. Especially given Fred's recent posting about interest rates heading up to 24% within a few years. It sounds like they are describing what iTulip itself is predicting!

[ThePythonicCow]

Re: Wheres the inflation?

Have you thought about cows for slaughter?

No.

[jpatter666]

Re: Wheres the inflation?

No.

Eat more chicken? :-)

[ThePythonicCow]

Re: Wheres the inflation?

Actually a nice discussion on deflation on The Automatic Earth http://theautomaticearth.blogspot.co...ed-studio.html

They are *serious* deflationists, but I read them (along with Rosenberg, etc) to hear the other side of the story. I trust iTulip, but at times I find the "no deflation, end of story, we ain't discussing it anymore" mantra disturbing. In economics, I've finally learned that absolute certainty most times leads to eventual disaster so I worry about that. Maybe paranoia on my part, but hey, to each their own.

• The monster debt is collapsing -- Deflation!
• No, no! The Fed is pressing the Zero key -- Inflation!

We need to think beyond the he-said, she-said debate and understand the system and its dynamics. It's not one or two agents and it's not linear.

My current favorite hypothesis is an oil price spike, due to conflicts in the Middle East and Southern Asia. This would put a bid under the U.S. Dollar, needed to pay for oil (*). Then, a couple years later, as oil prices come back down, fan the inflation fears (gold's biggest spike comes here) and spike Treasury rates (big hit on their value.) Then whoever is sitting on a big stash of Dollars can buy large amounts of cheap Treasury long bonds and earn 20+% for the next 20 or 30 years, on an asset that gradually rises in price (as happened after Volcker did this back in the early 1980's.)

In other words, I'm looking at this as a replay of the 1970's, until shown otherwise (probably tomorrow afternoon, given my forecasting track record.)

(*) Such an oil price spike due to war will no doubt cause the Inflationistas to declare victory. To do so, however, they would have to avoid looking closely at the primary cause of the oil price spike, which would be a supply shock, not a surfeit of money in the system.

The basic monetarist model that prices are predominantly a function of the money supply (print more money, prices go up, and vice versa) seems overly simplified in my view, even backwards. Other forces (various human hopes, fears, desires, understandings and organizations) drive this.

Money printing, or lack thereof, is not a primal driving force; rather it is but one of several tools that certain human organizations find useful to control people, their wealth and their economies.