stagflation

[Dan Schultz]

I see the prices going up on stuff that we don't really need... like restaurant food, cigarettes, and such.

It appears to me that 'the essentials' are still fairly reasonable.

I'll pass on the discussion of what some consider to be 'the essentials'.

[bisontuba]

Smile--this is a GREAT day--go outside and celebrate.......

mark

[Chuck Jackson]

I'll pass on the discussion of what some consider to be 'the essentials'.

1. Diet Coke (REALLY cheap at Sam's Club)
2. Beer (Lee's Discount has Miller High Life Lite at $13.99 for a 30 Pack)
3. Cigarettes (Marlboro Menthol Silver 100's at the Piute Smike Shop- $24/Carton. No tax)
4. Food (Sam's is good if you stay away from the "Fat Boy" prepared foods)
5. Gas (ok, this hurts, but everyone is getting butt-munched on this commodity)

No COLA raise in 12 years means leaner times. Who cares, you rub some dirt on it, tape an aspirin to it , and put your big girl panties and move forward. You'd be amazed what you can live without. The upside? Weight loss and better health.

Chuck

[hup_d_dup]

You can never tell what's happening or why when collapse is impending.

Hup

[TubaRay]

Smile--this is a GREAT day--go outside and celebrate.......

mark

Yes! It is a WONDERFUL day... Happy, Happy

bloke "who really doesn't want the door kicked in at 4:00 A.M. by the Gestapo"

Oh, yeah! Sure!........................................................................B.S.

[Chuck Jackson]

...so you guys thought I was referring to "beer and cigarettes"...??

Nah, just kinda hard to work in a Cimbasso angle on this one. Hey, wait.................I just did. Does this add to the "pitch", count?

Chuck"Cute"Jackson

[thezman]

Ok, so to actually answer the question....

No, you are not seeing 70's style stagflation. Yes, prices are going up, but (while from a savings perspective it is bad) prices always go up. And if they weren't going up, I'd be worried because with out population size one of two things have happened. 1) there was a nuclear attack or biological warfare which has destroyed the population, bringing the demand to zero, in which case we have bigger things to worry about, or 2) there is rampant deflation which means that we are hemorraging money out of the economy into either other markets or into had assets such that we can no longer afford items in the CPI, I'm assuming these are the items to which you are referring to, which is unrealistic. A little inflation is good. It means tht a little more money is flowing into the economy which means there is more money to spend. This when factored in with the multiplier effect can have huge, positive cinsequences. rampant inflation, the kind that Hayek was worried about, is bad.

Our economy is not stagnant, while news outlets like to make it seem that our country is going to hell in a hand basket, it is not. Our nominal GDP is twice that of the nearest sovereign nation (china) and close to three times that of the third (Japan). In fact the only economic grouping which outpaces the U.S. in nominal GDP is the euro zone, which even then is only about 10 percent more, but they most likely won't be around much longer or at least in its current form. For an economy of our size, we see growth, which as a percentage is very small but as an overall number is quite large. We have become accustomed to economic triumph on a scale unprecedented in the history of the world and we are going through a period in which that system has hit a little snag. This was in large part fueled by easy credit and large easily assumed debts which allowed for unprecedented growth. Which is good in the short term but eventually all debts come due. Long run it was impossible to maintain; but people assumed somebody else would always absorb the debt or it would be paid off eventually. But as Keynes said " in the long run we are all dead". The long run is such an obscure and unrelatale idea that manypeople prefer to deal in the unrealistic and irresponisle short term, because by the time the long run comes around we will all, most likely, be dead.Eventually, we will return to a high rate in terms of percent but in the mean time we need to acknowledge that sometimes the business cycle takes a slow upswing. People are buying, but they are not doing it in the same huge overall numbers they were spending.

Also, beer and cigarettes are relatively Inelastic goods. Nicotine addicts and alcoholics, or even casual drinkers, still need to get their fix regardless of price meaning that these items, like food and fuel a re bad economic indicators.

Remember the more de-valued the U.S. dollar becomes, the cheaper U.S. products become abroad, meaning that you will find it easier to sell some more "bloke pieces" abroad.