Wells Hall Off Topic Board

What do you mean "WHERE IS THE INFLATION"? Even going by your system that cherry-picks out the troubling statistics, inflation was around 3% last year. If you look at the most important things in peoples' lives, it was even worse with medical (3.6%), food (4.7%), and energy (6.6%) all up substantially. And of course, that's using you hedonic model, if you use a proper model, like the one the government used to before the numbers become to inconvenient to explain away, the story becomes much worse (see chart, attached).

No matter which way you cut it, inflation is a stealth tax, and with interest rates at zero, it'd badly cutting away at the responsible people trying to save money, and pushing people into riskier assets in order to combat the inflation (yet another example of the moral hazards that government manipulation of the economy creates).

Because it's something that has infinite demand (people need to eat and use energy), and thus when inflation goes up, they can't simply stop buying it like they can televisions and Coach purses (less demand, prices go down), which causes the prices of food and energy to continue to go up, which causes the CPI to go up, and thus delivers a more accurate, but politically poisonous statistic for inflation.

Like I've said to you before, just because there is inflation occurring does not mean that the laws of supply and demand go out the window. If money is created, the value of the money decreases, and wages are not adjusted accordingly (resulting in stagflation), then people being making decisions about what to buy. They have to buy food and energy in order to survive, so the demand is still there, and the devalued money is thrown that way. Less money is thrown at non-essentials like consumer electronics. It's the same deal with houses, just because our currency is being devalued (and thus somethings cost more), doesn't mean that house prices will rise. There is very little demand (and ability) to buy houses right now, so the price goes down. That doesn't mean there is deflation, it means that people can't afford them, and there is still room for the value of the houses to fall.

It's not hard to see what's happening, even using the artificial calculations that you prescribe to. I mean, food is at 4.7% and that's using hedonic measurements that address inflation by allowing for a decrease in quality of life.

Anthony Sanders, economist from George Mason University sums it up pretty good imo

http://confoundedinterest.wordpress.com/

Do you know somebody who doesn't need to buy food or gas? I don't.

If you include food or gas (where inflation naturally gravitates to), inflation is hardly low.

Nope it was low then also...and this was started because some on this board were predicting hyper inflation was here...have not seen hyper inflation yet and until the deflation in real estate is worked through the system don't expect inflation...most of what is being called inflation in food and fuel is supply and demand issues and not monitary inflation.

People moving to risker investments to live...come on...anyone that is doing that is living on borrowed time and has overextended themselves verses what they should have done...

Well no...for the poor people I whould have the government provide the food or means to purchase the food, like food stamps...

Yes I'm sure you solution is to let them starve to death under the theory that it is entierly their own fault that they are in this situation...to me people who believe that idea are showing that they do not believe in God or the Devil...

I also am shocked by those who continue to be ignorant of the fact that individuals are all part of a whole and that they think that it would be possible for some people to become wealthy without the poor people in the world...and that they then think that the wealthy created that wealth by themselves when if fact it was created by everyone...

OMG...you need to learn something about the history of the poor before you make such broad statements...people did and still do starve...it was in reaction to the long standing problem of old people starving to death that Social Security was started...

Really...your so far out in left field with that comment even I cannot see you...

Like the US did from the 1930s to the 1970s...yup control of the menas of production was the cause of the food shortages in those countries...not...

?

Somw evidence of this...mass stavation in the US...we were poor, I must have missed the daily body wagons going down the streets....

How are they not Keynesians? They might not be your particular brand of Keynesians, in that they also cut taxes (except for Bush I), but they are much more closely aligned with Keynesian principles than Austrian ones. Every single one of them had an active role in expanding the size and spending of our federal government. Reagan may actually have been genuine in his beliefs of reducing taxes; Bush I was your perfect Keynesian, both raising taxes AND spending money via the federal government. Bush II helped get the taxes cut, but that was more political than anything; at the very least, you as a Keynesian should be proud of him because he started two wars that caused massive government expenditures.

To say that any Republican in that bunch isn't Keynesian is absolutely false. We haven't had anything close to a free-market Austrian President since...I don't know, probably Calvin Coolidge?

The Democrats have done no such thing; the only time the government has managed to run a surplus in the last 40 years was the six year period between 1994 and 2000, when Republicans had control of the House and Senate, and the Democrats had control of Executive. Other than that, it's been spend, spend, spend, whether it is a Republican or Democrat in either branch.