Inflation-Consider yourselves warned

[percysunshine]

When ever the inside the beltway crowd is going to change something, they first telegraph it. Sometimes it is just a trial balloon which can be dismissed if the reaction is too negative. Sometimes it is more than that. I am thinking this is more than that. Especially since they are using the 'paper of record';

"WASHINGTON — Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough."

http://www.nytimes.com/2013/10/27/b....html?partner=rss&emc=rss&pagewanted=all&_r=0

 

[JakeStarkey]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

 

[percysunshine]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

Maybe they are going to do something different now. The point is I can't remember when the last time was that I saw an 'Inflation is good' article in a major paper like that. Combined with getting a new Fed head....

(note to mods ... this is not a conspiracy thread)


Normally I would think anything they do that will drop the value of the dollar, or print more money, as inflationary in nature.

 

[CrusaderFrank]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

They're not buying $85B of Toxic mortgages

Stick with cheer-leading for ObamaCare

 

[JakeStarkey]

Read it again, Frank, and stop fibbing.

 

[CrusaderFrank]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

Jake, stick to program Obama gives you. The Fed is NOT buying $85B of TOXIC Mortgages

 

[percysunshine]

Maybe they are telling us that quantitative easing is inflationary, and that it is finally working its way through the system to end retail pricing and wages. Sort of pre-excusifying what is unavoidable.

 

[Toddsterpatriot]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

Guaranteed MBS, the opposite of toxic.

 

[expat_panama]

Maybe they are telling us that quantitative easing is inflationary...

Or not. There's always the possibility that they're saying what they're saying, like..

“Low inflation is not good for the economy because very low inflation increases the risks of deflation, which can cause an economy to stagnate”.

Let's get clear: high inflation is bad, slight inflation is the standard goal, deflation is economic death.

 

[TakeAStepBack]

http://www.nytimes.com/2013/10/27/b...html?partner=rss&emc=rss&pagewanted=all&_r=1&

Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.

The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers’ wages.

These people are fucking K00Ks.

Inflation is good because it increases wages and prices! Which makes businesses more profit! Yeah, ok, moron. Except the fact that rising prices doesn't increase wages and futhermore, it doesn't mean people are going to pay off debts more quickly.

And as for saying deflation is economic death. I guess if you think lowered prices on televisions and cell phones was the death of communications and TV show, then yeah. I guess it's death.

 

[TakeAStepBack]

All this talk has prompted dismay among economists who see little benefit in inflation, and who warn that the Fed could lose control of prices as the economy recovers. As inflation accelerates, economists agree that any benefits can be quickly outstripped by the disruptive consequences of people rushing to spend money as soon as possible. Rising inflation also punishes people living on fixed incomes, and it discourages lending and long-term investments, imposing an enduring restraint on economic growth even if the inflation subsides.

Precisely.

 

[boedicca]

We already have high inflation...but the government understates it by manipulating the market basket of goods so that they can keep interest rates and increases in SS low.

 

[TakeAStepBack]

We already have high inflation...but the government understates it by manipulating the market basket of goods so that they can keep interest rates and increases in SS low.

Right. They monetize and sell debt.

This piece is a fluff piece designed to bring economically inept morons into the fold of understanding that increasing prices (which is already happening) is economically beneficial. It's not. It's only beneficial to the biggest drag on the markets; the government.

 

[iamwhatiseem]

We already have high inflation...but the government understates it by manipulating the market basket of goods so that they can keep interest rates and increases in SS low.

Exactly, all you have to do is go to the grocery store on a regular basis and know that the 2% number is a complete farce.

 

[expat_panama]

...as for saying deflation is economic death. I guess if you think lowered prices on televisions and cell phones was the death of communications and TV show...

Let's sort this out before things get more muddled than they are. Cel phone & TV prices have been falling over the past dozen years. You can't be saying we've been having deflation since 2001. Let's agree on what deflation is (from here):

--------------------------------------------------------------------------------
deflation [dɪˈfleɪʃən]
n

(Economics) Economics a reduction in the level of total spending and economic activity resulting in lower levels of output, employment, investment, trade, profits, and prices Compare disinflation
deflationary adj
deflationist n & adj​

Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003​

Reality is what it is, and when deflation's happened in the past the economy went to hell.

 

[TakeAStepBack]

That's a thwarted and ridiculous defintion of deflation.


Deflation - Wikipedia, the free encyclopedia

In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e., when inflation declines to lower levels).[2] Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.

Right. that is what deflation is. Now:

Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral.[3] Historically not all episodes of deflation correspond with periods of poor economic growth.[4] Deflation occurred in the U.S. during most of the 19th century (the most important exception was during the Civil War). This deflation was caused by technological progress that created significant economic growth.[5][6][7] This deflationary period of considerable economic progress preceded the establishment of the U.S. Federal Reserve System and its active management of monetary matters.

THAT is why deflaiton is the devil. To central bankers, the jig si up on their monetary inflatino policies when deflation occurs and that is why they target inflation rates. Because this is a DEBT society and they make their money off from serfdom of the people.

For the average citizen, under market economics vs. cetnral planning, deflation is a good thing for the economy. But NOT under a fiat floating currency that is centrally planned. And thats why these planners sell this garbage about inflation is good.

 

[expat_panama]

...In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e., when inflation declines to lower levels).[2] Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time...

That sounds good, we need to be clear we're talking "general prices" and not just one or two items; I'm hoping it means we're dropping once and for all the 'cel phone/ TV set' definition we used with--

...as for saying deflation is economic death. I guess if you think lowered prices on televisions and cell phones was the death of communications and TV show...

Now we got--

...deflaiton is the devil. To central bankers...

--and I'm hoping you don't find some quote w/ central bankers hating disco, nuke war, and hot fudge sirloin because I dread the thought of having to defend my opposition to that stuff...

 

[JakeStarkey]

2% inflation is considered a retardant for growing a vibrant economy.

As long as the fed continues to buy 85b monthly of toxic mortgage securities bundles, we are safe.

Guaranteed MBS, the opposite of toxic.

Nope. The bundlers should have all gone to jail for life.

As long as the government buys up the toxic crap, inflation cannot take off.

 

[JakeStarkey]

Quite a number of you are talking out of your butts.

Just saying.

 

[TakeAStepBack]

Quite a number of you are talking out of your butts.

Just saying.

Says the moron that thinks the fed is buying 85 billion a month in toxic mortgages.