Inflation watch


#341

Yes, you like to twist what people say.

So I see that you are back to conflating the phenomenon of sectoral and specific price rises with the phenomenon of a general inflation.

Can I suggest getting back to all that is encompassed in the phenomenon we call ‘inflation’.

****“We get inflation when means of payment increases more rapidly than the total output of goods and services.” ****

Let us also recall current contextual facts in the current political-social-economic environment:

Set out on this thread before, in relation to specific reported price increases (practically all price increases reported on this thread are due to the following social-political forces, rather than increase of means of payment):

1. Energy price increases due to number of factors. (which are complex, but certainly include tendencies related to points 2-3 below)

2. Private sector often in alliance with state apparatus rigging markets and creating practical monopoly / megalopoly in basic needs and essential social and economic infrastructure.

3. Increasing ‘economic rent’ rackets, and lending against economic rent (or unearned income). I.e. charging prices in excess of cost value. In this country, we see it worst of all in land speculation - LAND has no cost, it is provided by nature. The only “cost” is the price of buying the right to charge rent on it. This economic rent is created by special legal privilege or ownership rights. We also see this racket more and more in our road infrastructure, education systems and other basic needs.

And finally, let us recall the very important fact that spending patterns are shifting. People are spending more on the things encompassed in the above three points because they are FORCED to.

As a consequence, they have much less to spend on ‘non-necessities’.

So, the conclusion can only be that the phenomenon we are observing is NOT a general inflation.

It is something else.

But luckily (for the interests that benefit from the status quo described by points 1-3 above) we have people like you who will continue to squeak away and point in the wrong direction, idiot that you are. Though you are not the only one by any means.


#342

Less of the ad hominem please!

You talk about twisting words and then provide a peculiar definition of inflation. Out of interest, where did you get it from? I did a search for it online, and could only find it in your post on this website!

Here’s some real-world definitions of inflation for you.

Oxford

Miriam Webster

Investopedia:

Wikipedia

Are they wrong?

If you would like to debate your view (without calling me an idiot or saying “this is my last post”) please explain why these definitions don’t cut the mustard?


#343

While the definition ‘more money chasing less goods’ is good and succinct, in general, these definitions don’t cut the mustard in the context of the discussion on this thread, and the allusions you make to the causes, because:

a. They fail to encompass that money supply, or more accurately, ‘means of payment’ is only inflationary/deflationary in proportion to ‘total output of goods and services’. Without that relationship clearly stated, any definition is meaningless. Think about it.

b. They fail to make the distinction between ‘money supply’ and ‘means of payment’ - it is means of payment that is significant in causing inflation. Forget talking about money supply if you have not adequately grasped yet the analytical framing that is in ‘means of payment’.

c. The definition I have put forward puts an emphasis on the cause of inflation – since you continually allude in your sub-text to central bankers in league with “government” with malign and deviant motives and designs as the cause etc, I would have liked if we could have thought about and handled properly the causes or otherwise of (supposed) inflation in any discussion.

The definition is taken from this article written by Joseph Schumpeter. I chose it because it demonstrated a percipient analytical insight, which is sorely lacking in the usual definitions and so called discussions bandied about in undergraduate texts and adopted en masse by the internet.

And I tried honestly to debate this with you before, but you have repeatedly shown yourself incapable of either listening, or of making a modicum of analytic effort. Rather, you have demonstrated that you have an agenda to push blindly, a frustratingly naïve and exceedingly socially harmful one at that, so I am not interested in ‘debating’ anything further with you.


#344

Um, everybody (except you, I’m guessing) knows there’s different causes of inflation - even at a basic level: cost-push and demand-pull . . . . not sure why you’re trying to simplify something that’s quite complex.

Also, you do realise that you’re bemoaning inflation in your posts and rooting for it in your signature?

Nah, didn’t think so.


#345

Of course I know there are different causes to price increases. Poor attempt at a strawman there!

The purpose of my posts on this thread are as follows:

  1. To provide anecdotal evidence of widespread price increases above the official inflation rate
  2. To dispel the myth that in an environment of deflation (or falling prices) consumers cease to buy anything.
  3. To argue that (contrary to most media reports) that 2.0% inflation is not required for an economy to prosper, and deflation needs to be avoided at all costs.

Arguing over the definition of inflation and what causes prices to rise detract from these three points. Roc has consistently ignored questions I posed to him on those three points. I do however believe that the main driver of these price increases is easy money policy.

With respect to my signature, it is intended to point out that gold has risen in price (in terms of USD) in all of those years bar one. I’m happy for there to be inflation, as I and my family will be just fine, but what I hate is posters like roc who claim inflation is actually good thing for the regular citizen (correct me if I’m wrong roc!).


#346

I’m honestly not clear where you stand. Do you believe that 2% inflation is necessary, or are you missing a negative in point (3) there?


#347

:open_mouth:
Given that gold is below its Dec 2010 price either you are incredibly disingenuous, innumerate or dishonest.

Would you slap your pension fund manager on the back for great performance in the dot-com boom only to lose his hole in the subsequent bust?


#348

Try all three.


#349

Yes, missed the “not”, thanks for the head’s up. Fixed now.


#350

Are you honestly trying to equate gold with the dot-com bubble? Wow.

Yes Gold is at late 2010 prices, but it is higher than what it was in 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998, 1997, 1996, 1995, 1994 and so on going all the way back until the birth of the USD dollar.

If you bought gold in 2011, 2012 and part of 2013 you are down.

Is it the best way to store your wealth? Probably not, but it sure as hell is nothing like the dot com bubble.

And yet nobody wants to answer two questions:

  1. Can you name a consumer good that you would hold off buying for a year if you expected it would be 2% cheaper?
  2. If 2.0% inflation is good, is 2.1% inflation less good?

#351

November 11th 2013

June 27th 2014
https://oi57.tinypic.com/2q0t892.jpg

Given that you were trying to take the piss out of me then, and you inadvertently called the bottom, you must be incredibly disingenuous, innumerate or dishonest.


#352

Deflation concentrates wealth toward large corporations, the already wealthy and hoarders.
This is BAD.
You are likely a hoarder -as most gold bugs are- not a saver, as you will probably represent yourself to be. Hoarding is also BAD but seems to appeal to the moral, political, (often religious) ideals of libertarian, right wing, conservatives (cranks) who mistake it for some sort of righteous superiority over typical consumers.

I don’t think anybody is arguing that the type of inflation we have now is good; we need to see demand pick up across the Eurozone and it to bring inflation with it i.e. wage growth and higher employment; and we probably need to see a resurrection of organised labour to help us get there and a massive kick to the head for the German mercantilist morons allowing much larger deficits to fill the output gap.


#353

Deflation also makes things affordable for poor people, that once could only be bought by the rich. This is GOOD.

Inflation destroys the purchasing power wealth of those on fixed incomes. THIS IS BAD.

We all know there are winners and losers in times of deflation or inflation. As a money manager, you benefit from inflation as it is easier for you to create nominal returns for your clients and take a cut, even if they are losing purchasing power. In a deflationary environment, if your clients got a 0% return they would be better off but you wouldn’t.

As an owner of gold, silver, oil and other commodities I also benefit from inflation.

I am a saver, investor, business owner, employer and hoarder of gold and silver :slight_smile:

Abe is trying all that “create demand” nonsense and it’s failing miserably.

What’s gone wrong?


#354

The key is in “total output of goods and services” in the definition I highlighted. A reducing output equates to job losses and a spiral is engendered due to the loss of purchasing power that follows from the job losses, leading to further reductions in total output due to reduced demand and so on. Study the ‘definition’ I put forward. That is the big picture. With regard where the central banks come in, insufficient demand is related significantly to insufficient money.

With this, there are many other observed social-economic benefits of a positive inflation rate, not just related to ‘animal spirits’. Let’s take an example - the fact that your monthly salary is continually devalued by inflation means that if a period of hardship in business is experienced, or you turn out to be a lot more useless than initially thought, the employer has a cushion there. Now, when business is good and you prove a good worker, the employer gives you regular raises. But cutting salary is a lot more difficult! So, sure, this might appear a ‘bad’ thing for the regular citizen. But in broader terms, it helps business to survive. That IS good for the regular citizen. And the same dynamic holds true in the macro-economic vista above. And it is not just about psychology, although there are definite observed phenomena there.

Aggregate demand is significantly related to a sufficiency of money.

This thread has only managed to provide anecdotal evidence of price increases in energy, basic needs and essential social and economic infrastructure (due to ‘economic rent’ rackets and private sector alliances with state apparatus rigging markets and creating monopoly / megalopoly, as per my post over the page - the reason I get so frustrated is this whole ‘malign central bank money printing’ nonsense distracts from the important social-political realities in this).

This thread has said ZERO about general level of inflation in any form, anecdotal or otherwise.

And CPI measures ARE objective as far as that goes. You might come to appreciate the efforts to provide a good measure in this regard if you read the peer reviewed work towards improving the measure. Hell might freeze over before you pick up a book not packaged up in the simplistic bombast of bloody-minded narcissists like Schiff though.

Anyway, you have not contributed one valuable word or thought to discussion on CPI’s efficacy as a measure.

There are indisputable facts in the peer reviewed scientific domain related both to psychology, and insufficiency of money and impact on demand in this regard - good science describing what has been observed. To say nothing of the dangers of the deflationary ‘spiral’ I mentioned in my first paragraph above. Just because you “think” macro-economic considerations would not affect you personally, and you extend this personal belief onto the wider population, is not going to upturn a whole body of knowledge.

You’re an idiot.

Yep, you do. We got that. Thanks.


#355

Is this good or bad Japanese inflation? :slight_smile:
Prices climb most in 32 years as wages limp along

It looks to me like Higher prices = higher costs = lower demand = lower wages = lower employment.


#356

Abe’s stuff is nonsense, I’ve always said that - QE doesn’t work.

You’re totally wrong about deflation, if sustained it will continue to drive unemployment higher and increasingly concentrate wealth in the hands of large corporations and the wealthy. I already identified the type of people who welcome deflation, that you walk among them is on you :unamused:.


#357

**Bad.
**
**Nobody thinks it’s as simple as “any inflation = good”, except you. Nobody’s arguing that, except you.
**


#358

Abusive ad hominem usually involves attacking the traits of an opponent as a means to invalidate their arguments. Equating someone’s character with the soundness of their argument is a logical fallacy.
en.wikipedia.org/wiki/Ad_hominem


#359

As you’ve been personally abusing me since last year, I would invite you to send me your contact details by PM so that I can come pay you a visit.


#360

Well kids, here’s the perfect way to earn your ban. :unamused: