Thread: Have You Noticed? Still No Inflation! What Do the Austrians Say to That!?!

Originally Posted by jpn

"Confound individual with collective choices?" My dear sir, what an odd thing for (I assume) an American to write. What in the world could the Founding Fathers have been dreaming of when they wrote Article 1 Section 8 of the Constitution, if not "collective choices?"

No where in the Constitution is the Federal goverment authorized to take money from one person and give it to another person. That is EXACTLY what SS & Medicare does; it is legal theft.

As impressive as it is that you referenced Article I, Section 8, did you get the chance to peruse the Bill of Rights, particularly, the 5th Amendment: No person shall ... shall (have) private property be taken for public use, without just compensation?

Originally Posted by Tim

Yes, so far the deflationary forces in the economy have been more than enough to keep inflation in check, and we have also avoided severe deflation as well - which would have been far more difficult to address.

We still don't know how the economy will look in three to five years when the deflationary factors have eased, such as the housing crash, the flat equity markets, the international crises and other factors. They have served as a check on growth and inflation as well. It should be noted that the economy did experience a significant rise in commodity prices that came to an end earlier this year.

It is true that we have not experienced the rampant inflation that had been predicted in 2008-2009.

Core inflation does not seem to have risen to any great degree but food especially (no longer included included in core inflation) and other consumer products have risen around 30% through shrinking the product offered or by direct price increase. Inflation of core materials will jump as demand increases with recovery.

Originally Posted by tsquare

jpn: I think I might have 'found' your inflation...

Meaning...

The dollar is falling = inflation Q.E.D.

Gasoline Prices Are Not Rising, the Dollar Is Falling - Forbes

ahoy Tsquare,

and yet...well, the price 'o real estate be still droppin' too. the cost 'o a gallon 'o milk be more or less the same, up a few cents, but 'tis a tiny margin.

i think gas prices risin' hath more to do with the demand fer a specific commodity, 'tis not a sign 'o inflation. maybe if China remained in the stone ages, the price would drop, but what are ye goin' to do matey?

chinese folk like to drive them cars.

- MeadHallPirate

Originally Posted by JohnLocke

I don't understand. Can you explain what you mean?

It means at a minimum the funny money should be invested in the US (job creation) ... as opposed to going offshore or in someones bank account' A wiki definition below.


http://www.economicshelp.org/macroec...inflation.html

However, increased AD may not cause inflation, it depends on various factors:

a) If the economy is in recession and there is spare capacity a rise in AD will not cause inflation
b) If other components of AD are not increasing (e.g. consumer spending is low) then there is unlikely to be demand pull inflation. (X-M is not the biggest component of AD)
c) Also if exports are cheaper then the effect on AD depends upon the elasticity of demand. If demand is inelastic there will only be a small increase in Quantity and there could be a fall in the value of exports (Marshall Lerner condition states devaluation only increases AD if PEDx + PEDm >1)



Demand-pull inflation - Wikipedia, the free encyclopedia

Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as "too much money chasing too few goods". More accurately, it should be described as involving "too much money spent chasing too few goods", since only money that is spent on goods and services can cause inflation. This would not be expected to persist over time due to increases in supply, unless the economy is already at a full employment level.

Originally Posted by MeadHallPirate

ahoy Tsquare,

and yet...well, the price 'o real estate be still droppin' too. the cost 'o a gallon 'o milk be more or less the same, up a few cents, but 'tis a tiny margin.

i think gas prices risin' hath more to do with the demand fer a specific commodity, 'tis not a sign 'o inflation. maybe if China remained in the stone ages, the price would drop, but what are ye goin' to do matey?

chinese folk like to drive them cars.

- MeadHallPirate

Milk is a loss leader in chain stores to the degree large differences in price of this necessary product will sway the prime shopper to follow the price to the store with the lowest price.

Display of items are planned to conform to well thought out reasons to get one to walk the store. Pricing is not happenstance either and is carried out IMO by persons with fantastic deceptive skills.

Inflation has been especially present in the last year. Most people would not even notice a change in size of a boxed product or that bar soap has been scooped out to appear the same but at least 15-20 % less volume present. Meat is so bad I would fear buying it any place but "Central Market" HEB

Unless you have bucks to spare pay more attention when you shop.

Originally Posted by michael h

It means at a minimum the funny money should be invested in the US (job creation) ... as opposed to going offshore or in someones bank account' A wiki definition below....
a) If the economy is in recession and there is spare capacity a rise in AD will not cause inflation

I just do not understand the connection you are making between inflation and funny money invested in US job growth. Sorry.

Originally Posted by JohnLocke

I just do not understand the connection you are making between inflation and funny money invested in US job growth. Sorry.

History shows that governments can print the funny money and get away with little inflation (GB) ... this is not the 1st time money has been devalued with minimal inflation. Read the article I linked ... it explains some of the factors involved. The FED intends to devalue the dollar 2% a year for a couple decades.

Originally Posted by michael h

History shows that governments can print the funny money and get away with little inflation (GB) ... this is not the 1st time money has been devalued with minimal inflation. Read the article I linked ... it explains some of the factors involved. The FED intends to devalue the dollar 2% a year for a couple decades.

1. You keep making the mistake of supposing increasing the money supply is independent of inflation because you are confusing cause with effect. Many posts have been made by many people on this point.

2. The FED has devalued the dollar 2% per annum for a century now.

3. I see you are not connecting your commentary about effects of inflation with job growth here. Oh well.

Originally Posted by JohnLocke

1. You keep making the mistake of supposing increasing the money supply is independent of inflation because you are confusing cause with effect. Many posts have been made by many people on this point.

2. The FED has devalued the dollar 2% per annum for a century now.

3. I see you are not connecting your commentary about effects of inflation with job growth here. Oh well.

Actually I said exactly the opposite money supply is not independent ... nor is investment, nor is a recession, nor is consumer spending, nor is capacity, nor is the relative costs of imports and exports. Strangely they all interact ... or inflation could be exactly calculated. If you don't know the results of job creation on demand ... whats to explain?

Originally Posted by michael h

Actually I said exactly the opposite money supply is not independent ... nor is investment, nor is a recession, nor is consumer spending, nor is capacity, nor is the relative costs of imports and exports. Strangely they all interact ... or inflation could be exactly calculated. If you don't know the results of job creation on demand ... whats to explain?

Yikes! It is amazing to have so much backwards in a single post. It is not that money supply is dependent on inflation. Inflation is dependent on money supply. Thus it can be exactly calculated. It's effects in a given time period, is another story.

It is not results of job creation on demand. It is the effect of demand on job creation. It seems you've confused the dependent and independent variables. It is not merely that you have the cart before the horse but advocate the cart is pushing the horse. And although there may be some evidence of that is some bizarre scenario, theoretical or otherwise, it not only is outside what is the intention of attaching a cart to a horse but mixing metaphors!

Originally Posted by JohnLocke

Yikes! It is amazing to have so much backwards in a single post. It is not that money supply is dependent on inflation. Inflation is dependent on money supply. Thus it can be exactly calculated. It's effects in a given time period, is another story.

It is not results of job creation on demand. It is the effect of demand on job creation. It seems you've confused the dependent and independent variables. It is not merely that you have the cart before the horse but advocate the cart is pushing the horse. And although there may be some evidence of that is some bizarre scenario, theoretical or otherwise, it not only is outside what is the intention of attaching a cart to a horse but mixing metaphors!

And how is it that inflation is solely dependent on money supply? How is the word "independent" translated into ... "It is not that money supply is dependent on inflation". Of course job loss doesn't create a lack consumer spending / demand????????? We could blow smoke up each others ass about economic theories ... and government intervention ... the fact remains jobs create demand for those working ... as a matter of fact ... unemployment checks create demand. So with the cart and horse chugging on down the road ... they were out of work, millions of jobs gone ... I'm still looking for the demand created by lost jobs.

Originally Posted by tsquare

The dollar is falling = inflation Q.E.D.
Gasoline Prices Are Not Rising, the Dollar Is Falling - Forbes

I can't wait for his article on pork bellies... :rolleyes:

Originally Posted by skeptic1

Inflation has been especially present in the last year. Most people would not even notice a change in size of a boxed product or that bar soap has been scooped out to appear the same but at least 15-20 % less volume present. Meat is so bad I would fear buying it any place but "Central Market" HEB

I see that skeptic1 buys into the We're all Keeping It A Deep Dark Secret Theory of Inflation.