Money Supply is, EXPLODING: art cashin

[shinnosuke]

Benghazi, AP phone records, IRS targeting of conservative groups, Fast & Furious gun-running, Van Jones, Michelle Obama's part-time $330k hospital job... It's laughable when anyone wants to use government statistics to support their case.

[68Camaro]

"inflation is not high, yet"...

What is high, to you? Right, we're nowhere near hyperinflation, and we might not get to that anytime soon. But (to repeat parts of several old posts of mine) you do not need 100% or 10,000% inflation year over year to destroy a society. 8% inflation for 5-10 years will do a pretty good job of that. And if that 8% isn't tamed by drastic measures it will just grow to 10% then 12% then it will start to accelerate and then any one of a number of really bad things will happen.

[inflationhawk]

Its like pornography, I'll know it when I see it.

Seriously, I don't know (and there are NO truly accurate statistics out there), but 10 to 15% overall inflation likely starts getting to that path of accelerating out of control that you mention. And 10 to 15% overall probably means 50% plus inflation in some categories. We've seen 50% plus inflation in several micro categories already, but nothing close to 10 to 15% overall.

[68Camaro]

Its like pornography, I'll know it when I see it.

Seriously, I don't know (and there are NO truly accurate statistics out there), but 10 to 15% overall inflation likely starts getting to that path of accelerating out of control that you mention. And 10 to 15% overall probably means 50% plus inflation in some categories. We've seen 50% plus inflation in several micro categories already, but nothing close to 10 to 15% overall.

Smartphones (my previous post in this thread being a product of one) don't lend themselve to extensive conversation, so I can elaborate a bit more from a normal keyboard...

I've said most of this before here. I witnessed the effects of numerous years of elevated (I won't even call it high, because it wasn't that high) inflation during the late 60s into the early-to-mid-70s. Inflation during this period was (this from memory, but maybe later I'll plug in some facts) was running 5-8%. Quite a bit higher than the norm for the century, but still single digits. We would later see higher, so 5-8% it doesn't sound dramatic.

Recall that this was still a period of time when people expected (more or less) to take care of themselves, and planned for it. While there was a growing trend of increased government dependency most didn't expect the government to "take care of them". They still thought (wrong thought though it was, or was proven to be) that Social Security was "their money being held by the government and returned to them". SS wasn't a hand-out when received, or a tax when it was taken. They took pride in taking care of themselves. My retired grandparents (as most did) primarily lived off their savings and investments. I saw 5-8% inflation create a net-negative savings rate which, after several years, began to devastate their savings and cause them to no longer be able to live off the earnings and interest - they had to start living off their principle. I saw the cut-backs they had to make in living expenses and the compromised health care they accepted because they couldn't afford anything better. I felt the worry in their life as they wondered what would become of them if they lived into their 80s. Sadly for me, they died in their 70s, first my grandfather, then several years later my grandmother. As the story ends they did NOT use up their entire savings - my grandmother did pass on a small inheritance to my mother - but it was a near thing. If they had lived another year or two, they would have been penniless.

This is happening now folks. We have negative earnings rates now. It's just that no one is paying attention, and that people are used to being on the government dime. What happens when people run out of money? - well "the government will take care of me". But that line - multiplied enough times - eventually has a sad ending to it for someone. Either them, when the number of people on the dole exceeds the abilty of the government to borrow. Or me, when the government comes to take everything that I have, to give it to someone that is unwilling to work, plan, or save.

[shinnosuke]

No, 68, you've got to have faith that Uncle Sap will print more and there will be plenty for you and for all succeeding generations for all eternity. There is no evidence in any government report that anything could ever go wrong. Now get in line for your placebo injections and soylent green dinner.

[Fusion]

Inflation...well that's just silly. http://www.usinflationcalculator.com/in ... ion-rates/

In 1954, 8oz of pop cost $0.05 and a gallon of gas $0.20 . House and lot, 1955, $5000, present "value" $125000. Do the math.

With all due respect you are only presenting one view from an economic perspective of value and thats the most commonly cited CPI type example. Which is fine although it can be misleading which is why I will present a different view on the subject. When looking at measures there is Real Price, Real Value, Labor Value and Income Value. The most common analysis is to look at the price of gas using Real Price (CPI). So in 1949 a gallon of gas cost $0.27 whereas today its around $3.34. Makes it look like the purchasing power of the dollar has gone down since it takes more $$ to buy the same gallon of gas, right?

Now look at it from a different perspective. If you look at relative cost to a worker to fill up using 1949 dollars. That year the 27 cents it cost for a gallon of gas, took a certain share of the worker's wage. The interesting question is, has the cost as a share or percent of the worker's wage increased or decreased over time? The cost has actually fallen. Since wages have increased faster than the price of gasoline, an unskilled worker spends less than two-thirds as much, as a percent of wage, for a gallon of gasoline than the 1949 worker. For a production worker it is only half.

When we use the GDP per capita, the cost has fallen faster. A gallon of gasoline costs around 11 cents a gallon (in 1949 prices) if measured as a "share" of the GDP per capita. This is because in 1949, 27 cents was .015% of per capita GDP, while in 2010, $2.80 was .006%.

Finally, comparing its cost as a share of GDP, we see that in 1949 prices, it is about 4 cents. This means that a gallon gasoline was six times larger as a share of output in 1949 than it is today.

[Mossy]

Inflation...well that's just silly. http://www.usinflationcalculator.com/in ... ion-rates/

In 1954, 8oz of pop cost $0.05 and a gallon of gas $0.20 . House and lot, 1955, $5000, present "value" $125000. Do the math.

With all due respect you are only presenting one view from an economic perspective of value and thats the most commonly ...

I work with what I have available.

What is especially interesting about that usinflationcalculator site is that the amount given for today by it, is half of reality.

BTW, I'm paying $4.20 per gallon for gas.

[inflationhawk]

Additionally, a gallon of gas takes you much farther today than in decades past. Fuel efficiency of cars has increased substantially, so the impact of gas prices has less effect than previously. Inflation is not a widespread issue...yet.

[Fusion]

I work with what I have available.

What is especially interesting about that usinflationcalculator site is that the amount given for today by it, is half of reality.

BTW, I'm paying $4.20 per gallon for gas.

You need a gas subsidy. I'm sure there is one in Obamacare somewhere if you read it, then you'll know what's in it.

[Mossy]

I work with what I have available.

What is especially interesting about that usinflationcalculator site is that the amount given for today by it, is half of reality.

BTW, I'm paying $4.20 per gallon for gas.

You need a gas subsidy. I'm sure there is one in Obamacare somewhere if you read it, then you'll know what's in it.

It started at 2700 pages; what's it up to now?

And it has what to do with inflation?