Inflation is here!

[Melvyn]

Today, I want to talk about meat. I live in New Jersey. I am a computer programmer. As a consultant and as a man in my 60's I could no longer find work in the Northeast. So I traveled around the country. My last assignment was in Rochester, MN working for the Mayo clinic. I started in Sept 2003. I could buy a very nice cut of steak for 4.99 per pound. A nice meal cost me about 5 or 6 bucks. Occasionally, I would find it on sale for 3.99 or even 2.99. Cold cuts were about 4 or 5.00 per pound. Over the course of the year my steak went up to as much as 11.99 per pound.

When I came home I found that meat prices had stabilized in that region. Decent cuts of meant cost over 10.00 per pound. Cold cuts in Stop N Shop This week were all over 7.oo per ound and many were into 10 or 11.oo per pound.

Gas has gone up over 35 cents a gallon. This time Alan Greenspan is making believe it is not happening. And of course in some ways he is right. Unless you are boycotting China you are getting well made products for amazingly low prices. Washing machines, refrigerators, TV sets, all electronics have come down in price. Of course none of us have jobs making the things anymore. So, if you have bought any of these things, you probably on average come out even. If you still have an income, that is. If you have not bought thse things, you are skimping on meat, paper goods and other necesities and you don't know how to come up with the money for gas.

I guess as long as Greenspan, keeps ignoring the rise in prices, those of us who still have jobs(I don't) can simply tighten their belts, but when he wakes up, watch out. And you better have a democratic government so your unemployment will be extended after 6 months and those entitlement we've been taught to hate are still available. The republicans don't give a Rat's a__

Mel - Blogging at http://radio.weblogs.com/0137954/

[bishop]

inflation's measured in varying ways.. there's types that includes volatile items like energy and food, and there's types that don't.

i agree with greenspan that inflation is definitely something to keep an eye on, but what's happened recently is not all that bad. in many respects, it should be seen as a huge relief that the deflationary pressures that existed in 2001-2002 have subsided. deflation is some scary stuff, as evidenced by japan.

and, inflation just dropped by a little recently:

http://money.cnn.com/2004/07/15/news.../ppi/index.htm

the latest increase was .2% if you exclude energy and food, and .3% if you include them. not much to worry about there.

it seems to me that the fed is waiting for inflation to gradually increase, and marry that up with gradual increases in interest rates. imo, the fed should not try to pre-empt rising inflation with interest rate increases. such action could be counter productive. i like the reactionary stance as far as the fed goes.. everytime they try to base monetary policy on expectations/predictions, the markets react oppositely and mess up what the fed tried to accomplish.

[Sonart]

There's all sorts of economic mumbo-jumbo to determine the causes of inflation. Since the first Gulf Oil crisis, however, with the United States wholly dependent on energy which it can no longer produce itself in significant amounts, when all things are equal, inflation is now dependent on one thing...

...the price of oil. Period.



Red Line indicates inflation rate.

[bishop]

could you post that image as a link?


it's understandable that over the years, oil prices and inflation are beginning to parallel each other.. after all, the world has become much more dependant on oil now than in years past. and our chief importer, china, has been transferring it's own increased energy costs in the products they sell to us.

oil's always been one of the most important commodities used to fuel both production and consumption.

imo, the primary question is what causes the price of oil to increase? the answer to that is fairly straight forward. the solution? find a way to lower oil dependency so that its natural fluctuations can be more easily absorbed by the market/consumers. a buffer if you will..

[Melvyn]

President Carter tried to relieve us of our oil dependency. He failed. The Bush administration stands with the oil companies. Any price in blood and treasure is OK because these people don't go to war. George Bush talks about patriotism, but every day he moves us into a deeper dependency on mideast oil.

Like Health care John Kerry's good intentions on energy are going to crash into entrenched rich and politically powerful interests. He is going to try to expand the health care system to more people and he is going to make a major effort in alternate energy sources.

Of course he is a politician so if he takes it slow we will have to hold his feet to the fire. He is going to find out that a grassroots movement is a two edged sword. We may get him elected, but it will be our job (there are now 5,000,000 members and volunteers of his campaign and we are in touch with email) to hold his feet to the fire.

Getting us off of our dependency on mideast oil woud be a great act of patriotism and as difficult as turning your boat around under fire and pulling a wounded comrade out of the water.

Mel - Blogging at http://radio.weblogs.com/0137954/

[Sonart]

President Carter tried to relieve us of our oil dependency. He failed.

Actually, Melvyn, Carter didn't fail at all. By the end of his term, thanks to conservation and alternative energy, the United States had reduced it's oil imports by an incredible 25%. OPEC eventually collapsed and the price of oil dropped by half, inflation right along with it.

Just in time for Saint Ronald to take credit for the resulting "Reagan Boom". See for yourself. Alas, in the ensuing years, American oil consumption soon climbed right back up past pre-crisis levels and and we're now more dependent than ever.

[bishop]

carter also wanted to invest in alternative energies, but the powers that be killed that one swiftly.

[Young]

Hey Mel i created this post "Price of Living - Killing people"....hi how are you? Mel, did you know that you are perfectlty welcome to come and debate in my posts? I value your opinion and see no need for extra posts on subjects already posted for discussion....atleast your not as bad as V....."Kerry unfit for command" had been up for a week when he decided that he needed his own post to bash Kerry......he wanted to make sure that everyone knew it was V bashing Kerry!

[droque]

Originally posted by Melvyn, Today, I want to talk about meat. I live in New Jersey. I am a computer programmer. As a consultant and as a man in my 60's I could no longer find work in the Northeast. So I traveled around the country. My last assignment was in Rochester, MN working for the Mayo clinic. I started in Sept 2003. I could buy a very nice cut of steak for 4.99 per pound. A nice meal cost me about 5 or 6 bucks. Occasionally, I would find it on sale for 3.99 or even 2.99. Cold cuts were about 4 or 5.00 per pound. Over the course of the year my steak went up to as much as 11.99 per pound. When I came home I found that meat prices had stabilized in that region. Decent cuts of meant cost over 10.00 per pound. Cold cuts in Stop N Shop This week were all over 7.oo per ound and many were into 10 or 11.oo per pound. Gas has gone up over 35 cents a gallon. This time Alan Greenspan is making believe it is not happening. And of course in some ways he is right. Unless you are boycotting China you are getting well made products for amazingly low prices. Washing machines, refrigerators, TV sets, all electronics have come down in price. Of course none of us have jobs making the things anymore. So, if you have bought any of these things, you probably on average come out even. If you still have an income, that is. If you have not bought thse things, you are skimping on meat, paper goods and other necesities and you don't know how to come up with the money for gas. I guess as long as Greenspan, keeps ignoring the rise in prices, those of us who still have jobs(I don't) can simply tighten their belts, but when he wakes up, watch out. And you better have a democratic government so your unemployment will be extended after 6 months and those entitlement we've been taught to hate are still available. The republicans don't give a Rat's a__ Mel - Blogging at http://radio.weblogs.com/0137954/

If Greenspan raises interest rates it will increase unemployment causing a deep recession!

[droque]

Originally posted by bishop, inflation's measured in varying ways.. there's types that includes volatile items like energy and food, and there's types that don't. i agree with greenspan that inflation is definitely something to keep an eye on, but what's happened recently is not all that bad. in many respects, it should be seen as a huge relief that the deflationary pressures that existed in 2001-2002 have subsided. deflation is some scary stuff, as evidenced by japan. and, inflation just dropped by a little recently: http://money.cnn.com/2004/07/15/news.../ppi/index.htm the latest increase was .2% if you exclude energy and food, and .3% if you include them. not much to worry about there. it seems to me that the fed is waiting for inflation to gradually increase, and marry that up with gradual increases in interest rates. imo, the fed should not try to pre-empt rising inflation with interest rate increases. such action could be counter productive. i like the reactionary stance as far as the fed goes.. everytime they try to base monetary policy on expectations/predictions, the markets react oppositely and mess up what the fed tried to accomplish.

Bishop with Greenspan you will need to do a lot of praying!

[droque]

Originally posted by Melvyn, President Carter tried to relieve us of our oil dependency. He failed. The Bush administration stands with the oil companies. Any price in blood and treasure is OK because these people don't go to war. George Bush talks about patriotism, but every day he moves us into a deeper dependency on mideast oil. Like Health care John Kerry's good intentions on energy are going to crash into entrenched rich and politically powerful interests. He is going to try to expand the health care system to more people and he is going to make a major effort in alternate energy sources. Of course he is a politician so if he takes it slow we will have to hold his feet to the fire. He is going to find out that a grassroots movement is a two edged sword. We may get him elected, but it will be our job (there are now 5,000,000 members and volunteers of his campaign and we are in touch with email) to hold his feet to the fire. Getting us off of our dependency on mideast oil woud be a great act of patriotism and as difficult as turning your boat around under fire and pulling a wounded comrade out of the water. Mel - Blogging at http://radio.weblogs.com/0137954/

click on "Exposed Carlyle Group" a documentary and the Bush Family.
:
: http://search.netscape.com/ns/boomfr...?query=Carlyle
:
+Group&page=1&offset=0&result_url=redir%3Fsrc%3Dwebsearch%26requestId%3Dedc572ca4624f7b3%26clickedIt emRank%3D4%26userQuery%3DCarlyle%2BGroup%26clickedItemURN%3Dhttp%253A%252F%252Fwww.informationcleari nghouse.info%252Farticle3995.htm%26invocationType%3D%26fromPage%3DnsBrowserRoll%26amp%3BampTest%3D1& remove_url=http%3A%2F%2Fwww.informationclearinghouse.info%2Farticle3995.htm

: If the link does not work--research by copying
: Carlyle Group in Goggle or Yahoo and click
: on "Exposed Carlyle Group" a
: documentary and the Bush Family.

[bishop]

droque.. could you do something about that url? totally destroyed this page.


i'm not a huge fan of greenspan, but he's not always wrong, despite what the fed's opponents like to suggest.

[droque]

Originally posted by Sonart, There's all sorts of economic mumbo-jumbo to determine the causes of inflation. Since the first Gulf Oil crisis, however, with the United States wholly dependent on energy which it can no longer produce itself in significant amounts, when all things are equal, inflation is now dependent on one thing... ...the price of oil. Period. User Posted Image Red Line indicates inflation rate. User Posted Image

Sonart, I was very impressed by your graphs, something I'm trying to do. I have been working on a macroeconomic model to achieve effective demand and sustained growth. Using Excel I have reduced the macroeconomic model into mathematical formulas and applied them to the empirical data of the national income's conponents for any given year. The results you will find astounding; it shows that the 1933 depression, 1970 stagflation, and 1980 inflation could have been avoided. I need help incorporating the Excel model into my homepage so that economists and politicians can interact with the Excel model so that they can see for themselves that a growth economy with full employment and prosperity can be achieved without inflation and recession. Please let me know if you can help me with this project.

[Zeebadee]

The price of oil is only going to go up as consumption increases due to the industrial growth in other countries. As much as it hurts now, we are much better off using up the oil reserves of OPEC, even at these high prices, and saving the undeveloped oil fields in this country. Current prices are much lower than they will be 10 years from now.

[droque]

Originally posted by bishop, droque.. could you do something about that url? totally destroyed this page. i'm not a huge fan of greenspan, but he's not always wrong, despite what the fed's opponents like to suggest.

Yes, I can see how doing a lot of praying could do that! As for Greenspan there is nothing hard about reducing inflation by downsizing employees to keep millions unemployed and even more millions underemployed.

[bishop]

the off-hand comments aren't impressive. keep going with those vague statements of yours, maybe you'll fool somebody.

if you were greenspan, how would you fix/manage the economy?

[droque]

Originally posted by bishop, the off-hand comments aren't impressive. keep going with those vague statements of yours, maybe you'll fool somebody. if you were greenspan, how would you fix/manage the economy?

I would resign and save the economy trillions of dollars who keeps the GNP at around 3% when it should be above 9% annually.

[bishop]

right-o.. dunno where you base your numbers, comments on, but it doesn't sound like you know what you're talking about.

[droque]

Well Bishop, I'm glad to meet someone that does! Maybe you could show us how to achieve effective demand and sustained growth. Hint has much to do with savings and investments.

Please don't go into hibernation!

[bishop]

savings and investment are different things in the eyes of the fed. high interest rates promote saving, low interest rates promote investing. equilibrium between the two is what achieves sustained demand and growth.

equilibrium theories are what governs all of the fed's actions.