Inflation

Didn't seem to have much effect on the last couple of yachts I bought. Now, I hear that high end housing (1 1/2 million +) are also holding the line in some areas.

But what about those 1-1/2 million + houses in california that keep going up in smoke

This whole economy seems to be based on the comfort level of the ones referred to by Dubya as his base.

Why, that's a clear case of deflation, Au.

YESI am felling inflation. I don't care what the "professionals" say. They will lie to serve their own cause.

Just look at the cost of daycare.

A couple of days ago The Tucson Citizen had an article that tuition and fees at the U of A were increasing at about 9% a year. I'd sure like to see a detailed breakdown of how their expenses can be going up at 9% a year, since the "official" rate of inflation is only about 3%.

Inflation is under control if your economy is growing at 3%...prices, wages and GDP...

...of course the poor's wages will only grow at 1% , subsidising the skilled whose wages will grow at 5%...

...and that keeps wage inflation under control...

...and the govt/papers get to give people a warm fuzzy feeling.

And we have been advised that our economy grew in the 3rd quarter by much better tha 4%

There is an ideological divide when it comes to judging the Economy.

Leftists will never be satisfied with the Economy unless it provides prosperity to 100% of our citizens.

A nice notion but about as realistic as insisting that mankind never go to war, that everyone remains healthy, or that we all assume a vegan diet.

Nothing in life realizes a percentage of 100, except death.

One hears the Left rant about 30 million Americans who went to bed hungry.

It makes for dramatic rhetoric but it has no basis in the truth.

If someone in America suffers from malnutrition (as opposed to going to bed a few nights hungry) it is because they are crazy or the child of someone who is crazy.

This is not to say that we should cast these poor souls upon the dust bin, but it is also not to say that America has a widespread problem with hunger.

We hear these ridiculous claims from two groups:

1) People whose livelihood depends on feeding the "hungry."
2) Liberals who just love to find fault with American Society, irrespective of whether or not they are prepare to do something about it.

Back to inflation ---- yes it is a threat, but it is not one realized. We have a Federal Reserve Board that has, and continues to see inflation as the number one enemy of not only our economy but of our way of life.

Should a Jimmy Carter Lib reside within the White House ---- all bets are off.

Liberals cannot help but invoke inflation. Their ideology is bent upon stretching if not bursting the tolerance of cash as respects supply and demand.

Consider all Liberal economists. They are the equivalent of "scientists" who scorned Copernicus and Galileo. Facts matter not, proper feelings prevail

Re: Inflation


I suppose it is in how you define inflation. Inflation, in the economic sense, is defined as a general increase in prices and corresponding fall in the purchasing value of money. Can the government reduce the number of people in poverty by changing the definition of what constitutes "poverty?" Change what it takes to be classified as poor, and a reduction in poverty is easy.

Unfortunately, reality clashes with whatever definition government economists foist on the public. The reality is this- things cost more today than yesterday. Things cost more yesterday than they did the day before.

The purchasing power of my dollar is less today than it was last year, or a few years ago, ergo, inflation. I recently took on a 2nd job to compensate for what seemed to be an ever-widening gap between what I earned and needed to spend in order to maintain the lifestyle I am accustomed to living. Perhaps those who make hundreds of thousands of dollars a year telling the public that there is no inflation, don't really see the effects of inflation. Inflation, however, is very real for too many people.

Princes
You must not live in the U.S. because Bush and company have declared inflation under control.

Rabel - it just isn't Bush and Company. Its the entire Government.

I have no problem remembering 40+ years ago when a paperback book was 55 cents, first class postage was 4 cents, and a gallon of gasoline was 22 cents.

Prices have not gone up - the value of the dollar has gone down. This process has been going on under EVERY administration, BOTH Republican AND Democrat (as if there's a nickel's worth of difference between the two).

This has been going on ever since the Federal Reserve System was forced on us back in 1913, and the process of ending the Gold Standard, and creating paper dollars out of thin air began.

Squeeze on Wage Earners Accelerates The BLS is reporting Real Earnings Drop .5 percent in April.


Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent decline in average weekly hours and a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers were partially offset by a 0.2 percent rise in average hourly earnings.

Data on average weekly earnings are collected from the payroll reports of private nonfarm establishments. Earnings of both full-time and part-time workers holding production or nonsupervisory jobs are included. Real average weekly earnings are calculated by adjusting earnings in current dollars for changes in the CPI-W.
The BLS also reported the Consumer Price Index for April 2007 today.

On a seasonally adjusted basis, the CPI-U advanced 0.4 percent in April, following a 0.6 percent increase in March. The index for energy increased 2.4 percent after advancing 5.9 percent in March. In April, the index for petroleum-based energy rose 4.6 percent versus a 10.1 percent increase in March. The food index rose 0.4 percent in April, slightly more than in March. The index for all items less food and energy advanced 0.2 percent in April, following a 0.1 percent rise in March; the index for shelter rose 0.3 percent after advancing 0.1 percent in March, resulting from an upturn in the index for lodging away from home.





Wages are not keeping up with costs. There is no other way to look at it. Yes home prices are dropping but with fewer and fewer people buying homes, the drop in home prices is simply not helping many.

Bloomberg is reporting U.S. Median Home Price Tumbles to 2-Year Low in Slump.
U.S. home prices tumbled to a two-year low in the first quarter, with declines in almost half of U.S. cities, the National Association of Realtors said.

"The market is clearing itself as the lower prices lead to less supply," said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. "Over time that will help to bring supply and demand into equilibrium."

Over Time. Yeah right. Like how much time? Three Years? Five years? The statement is absurd actually given that inventories are still rising. In the meantime the slump in housing prices continues to cut off the housing ATM, removing a key source of funds for cash strapped consumers.

As Lance Lewis pointed pointed out today on Minyanville, the numbers excluding food and energy (what the Fed likes to look at), are now magically below the 2 percent threshold. If the Fed wants an excuse to cut, the 3 month rate in CPI excluding food and energy paves the way.

Unless that rate cut translates into lower mortgage rates, however, it will not help one iota. For those in the group of 430,000 First Quarter Foreclosure Filings it is already too late. Coupled with the latest weak jobs report as noted in Birth Death Model Fatally Flawed and Nonfarm Payrolls Vs. Gov't Payrolls a disaster is forming.

Real wages are declining and corporate profits are not shared with wage earners except at the very top end. That skew makes the decline in wages worse than it even appears (and it appears bad). The squeeze on consumers is accelerating.

Jim
I realize that it is the natural progression of the economy that raises the inflation rate. What frosts my behind is the fact that since Reagan the government has changed the way the inflation rate is figured by takeing out things like food, fuel and other everyday things that everyone has to buy. They seem to think we are too stupid to see that the stated inflation rate isn't related to the real cost of living.

rabel- this sort of fudging the numbers will happen in every administration as long as we let them get away with it. I absolutely promise you that if Senator Clinton or Obama become our next president it will continue. Just as it will continue if Governor Romney or Huckabee become our next president.

The only one of the bunch who seems to understand the fraud of the Federal Reserve System with the resulting inflation is Ron Paul.