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Shadow inflation

For the past several years, we have been conducting this event at a lovely resort in the Lithuanian countryside. It’s a pretty place– a nice, comfortable, relaxing environment away from all the noise and distraction of daily life.

Now, I pay for the whole thing myself. I rent out the entire resort and pick up the total cost of food, lodging, entertainment, etc. For this year’s event, my staff was able to negotiate the same price as last year, and I was happy about this.

But after the first two days, we began to notice something different: the resort was actually skimping out on our food portions!

In other words, they kept the price the same as last year… but they were delivering less value than before. In this case, it was in the form of food portions that were at least 10% smaller!

(Needless to say, we rectified this by ordering several dozen pizzas… followed by a very candid conversation with the resort’s General Manager.)

This is an example of something that I see all over the world. It’s a shadow form of inflation that I call ‘value deflation’.

You see, most people think that inflation is really all about price, i.e. paying X% more this year than last year. But this is merely one version of inflation.

At its core, inflation is loss of purchasing power. This can mean an increase in price for the same amount of stuff, or it can mean a decrease in the amount of stuff for the same price.

I see many signs of both all over the world as I travel.

Price inflation is obvious. We all know when we’re paying more because we see the price tag. When the price of food or fuel goes up, in fact, it can even result in sticker shock.

Value deflation, on the other hand, is far more deceptive. Most people aren’t that closely attuned to realize that their portions are getting smaller, that their ‘extras’ are going away, etc. We didn’t notice until our stomachs started growling.

Value deflation is not taught at university economics courses; you’ll never hear any of these Nobel economists or central bankers mention it. Stiglitz, Krugman, and Bernanke all happily tow the line that ‘there is no inflation’ because the price of iPads keeps going down.

These are the people who have the power to influence policy and conjure trillions of dollars out of thin air… and it’s amazing how easily they can hide the truth from people through this shadow inflation.

by Anonymousreply 9101/13/2013

From Consumer Reports-

Lest you think the Grocery Shrink Ray, which reduces the size of a food product but leaves the price intact (or even makes that price increase), is a product of the Internet Age, here is evidence showing the Shrink Ray's pernicious effects from 35 years ago.

Consumerist reader Clinton discovered the above AP story in an archived copy of the Tri-City Herald.

As you can see, the Shrink Ray -- though its true name was not known at the time -- was being put to use on various Hershey products, as the company reduced the size of its candy bars by an average of 12.8%.

Furthermore, "There is a distinct possibility that we may have to increase our prices with the result that our standard bar will have to sell for 25 cents or more in most retail outlets," the Hershey chairman declared.

Interestingly enough, at some point between 1977 and the present day, Hershey Bars got slightly bigger. At the time, they were being reduced from 1.2 oz. to 1.05 oz. The current Hershey Bar weighs in at 1.55 oz, but it has also gotten more expensive. Even in bulk boxes of 36, you'll pay anywhere from $.55 to more than $1 per bar.

by Anonymousreply 107/31/2012

When Breyer's Ice Cream reduced the amount of ice cream from what was a gallon size, they announced that they have all new packages that fit in the freezer easier.

Of course you can fit more in the freezer because they're smaller and you get less ice cream.

All through the frozen food section of a grocery store, you'll find items with reduced content from what you bought two years ago.

by Anonymousreply 207/31/2012

Libertarian Idiot Alert!!

by Anonymousreply 308/01/2012

Anyone who HASN'T noticed the sizes of the boxes are the same, but instead of 12 oz it's 10.4, or 20 instead of 24 to a package, or many other such "grocery store shrink ray" gimmicks is a blind idiot.

by Anonymousreply 408/03/2012

Cans of tuna and bags of shredded cheese now hold less. I think the tuna thing happened at least a year ago, but I just noticed the cheese bags this week.

by Anonymousreply 508/03/2012

I wonder how much gold the Libertarian idiot has stashed under his mattress.

by Anonymousreply 608/03/2012

I love how OP attempts to demonstrate fiscal awareness by pointing out "his" theory of value deflation (by the way, it's already been observed and commented upon for years), but also needs to emphasize they HE pays for his little event - you know, where he pay for renting out an entire resort.

by Anonymousreply 708/03/2012

Absolutely noticed this a number of years ago with crackers and more recently with the Fress Express bags of lettuce. I used to get four dinner salads out of one bag amd now I get only three. Makes me so pissed...

by Anonymousreply 808/03/2012

Lithuania?

by Anonymousreply 908/03/2012

When is this going to happen with celery? Instead of being forced to buy a whole bunch, when will the shrink ray come along and allow me to buy individual stalks, since I never use more than one or two anyway?

by Anonymousreply 1008/03/2012

Notice how many places the OP or others have posted EXACTLY the same post.

Put the first couple lines into Google and see how many freaky tinhat blogs this is on.

by Anonymousreply 1108/03/2012

Please do not respond to R12. He needs a psychiatrist, not a debate partner.

by Anonymousreply 1309/25/2012

Wow, I never noticed til now that things cost more now than they did a few years ago. We have to get the word out on this!

by Anonymousreply 1409/26/2012

[quote]Since food, energy and housing make up over half of our expenses, and all three have been increasing at 6-10% for over a decade, how can anyone take the "official" numbers seriously?

Moron, they haven't all been "increasing at 6-10% for over a decade." Can't you turn your brain on and actually *think* before you post nonsense like that? Even an ignoramus like yourself must surely be able to see that housing, if nothing else, has not been "increasing at 6-10% for over a decade." Have you been asleep for the past six years??

[quote]When the government via the Federal Reserve prints more money to bail out the banks, it means that more dollars are chasing the same amount of goods

There's only one problem with this "analysis." It's bullshit. When you look at a chart of inflation vs. Federal Reserve actions, there's no correlation. By this theory, we should already be experiencing the hyperinflation idiots like you have been predicting for years and yet that hyperinflation just hasn't happened. Nor will it, since you cannot get hyperinflation when you're in a liquidity trap, as we currently are.

[quote]All my friends and colleagues said I was crazy since gold was in a bubble and real estate would never decline.

Uh-huh. And the price of gold over the past year has been bouncing around a lot, climbing to 1800, plummeting to 1550, and back up again. This is not a sign of a healthy gold market, which you can see by looking at an inflation-adjusted chart. See the link if you're curious.

In short, and as usual, you don't have the foggiest idea what you're talking about.

by Anonymousreply 1609/26/2012

Have you noticed that rolls of toilet paper are at least an inch shorter than they used to be?

by Anonymousreply 1909/26/2012

[quote]Too bad government worshipping morons like [R16] can't see that.

LOL.... You never learn, do you? You always try this and you always just keep digging that hole deeper and deeper. In no particular order:

1. Nobody here "worships" government. Pointing out that you're full of shit and really don't know what the hell you're talking about is not "worshipping government." It simply means that you're full of shit and really don't know what the hell you're talking about.

2. If you mean that we approve of programs like Medicare, well, duh. Programs like that are effective, cheaper, control costs better, and are more popular than the private alternatives. That's reality; deal with it.

3. I will note that, as usual, you have no answer to the criticisms of your idiotic talking points. That's what happens when you parrot drivel you found on some site on the Internet rather than actually trying to understand what you're writing about.

4. As to the specific point raised here, "that's just one way to disguise inflation," is it really too much to ask that you turn your brain on before posting? Nothing is "disguised" here because we don't measure inflation by checking the price of individual packaged goods.

Free clue: what happens when food packages get smaller? They don't last as long and you end up buying more of them, which shows up as, wait for it, inflation!

In short, and as usual, you're full of shit and really don't know what the hell you're talking about.

by Anonymousreply 2009/27/2012

[quote]If $1 bought 16 oz of cereal in 2008 and it only buys 10 oz of cereal today, that's pretty heavy inflation, and hurts the poor people most.

Moron, you claimed that this was "disguised" inflation. It's not disguised, neither from the people buying nor from economic statistics. Instead of acknowledging that you said something really stupid, you instead reply with a non sequitur.

[quote]Oh, and a look at the chart posted by [R16]/20 shows that Gold is historically cheap.

ROFL.... Moron, the chart shows gold at historically *high* levels, of course. Gold is in a bubble and it will come down, as anyone with an IQ above that of a mayonnaise jar can clearly see from the chart. Oh, wait....

Still pretending that gold is going to climb tenfold in price, moron?

[quote]Probably not what she wants to hear, but a reversion to the norm means a price closer to $3,000/oz.

ROFL.... No, dear, it doesn't, which is why you can't support this bit of drivel any more than you can the rest of the nonsense you spew.

[quote]Why do you hate poor people? Are you a republican?

ROFLMAO.... Thanks for confirming that you are, in fact, a moron, and that you have nothing of value to offer. I repeat:

I will note that, as usual, you have no answer to the criticisms of your idiotic talking points. That's what happens when you parrot drivel you found on some site on the Internet rather than actually trying to understand what you're writing about.

by Anonymousreply 2309/28/2012

[quote]believes that the government can just print money and make everyone wealthy.

ROFL.... No, dear, I don't, which is why you can't find a single post of mine that says anything even remotely resembling that. I will note that, as usual, you have no answer for the criticisms of your idiotic talking points except to issue rather pathetic ad hominem attacks. Sad.

by Anonymousreply 2709/28/2012

[quote]are too ignorant to look at your own post?

LOL.... No, dear, I'm not. You, on the other hand....

[quote]The trend line shows gold, in nominal terms, is at lower than it has been since 1913.

Wow, you really are an idiot, aren't you? Not only are you dead wrong about gold "in nominal terms ... lower than it has been since 1913," since it's far higher now, but there's a reason I posted an inflation-adjusted chart! "Nominal terms" is meaningless over that time period.

[quote]Are you that stupid, or do you work for the Federal Reserve?

LOL.... Oh, the irony....

[quote]Trust me- as soon as the Federal Reserve raises interest rates (which they will have to do, eventually, or else the economy will implode) gold will roar past nominal highs.

No, dear, it won't, because the reason that gold is in a sustained bubble now is because of the economic downturn. The Federal Reserve won't raise interest rates until the economy has strengthened sufficiently to handle the rate increase. By the same token, though, a stronger economy will mean that the demand for gold will have fallen which will bring the price back to earth just as has happened in every other bubble.

by Anonymousreply 2809/28/2012

It's baaaackkkk...

by Anonymousreply 2909/28/2012

The Goldman Sachs unit Goldman Sachs Asset Management has hired Andrew "Buddy" Donohue, a former head of the division of investment management at the Securities and Exchange Commission, as deputy general counsel, according to an internal memo obtained by Reuters.

It's always nice to hire your former regulators.

by Anonymousreply 3010/09/2012

Dear heart, you really don't need to resurrect all of your old threads to post this non-story.

Have you managed to work out the relative prices of gold and of stocks this year or are you still closing your eyes, putting your fingers in your ears, and holding your breath until you turn blue?

by Anonymousreply 3110/09/2012

Gold has gone from $270 in 1999 to+/-$1750 today, a near 600% jump.

Stocks are flat.

by Anonymousreply 3210/09/2012

ROFL.... Still can't bring yourself to acknowledge what has happened to gold over the past year or that stocks are a better investment than gold, can you? I do so love the smell of denial... it smells like... victory.

by Anonymousreply 3310/09/2012

R33, gold has outperformed stocks.

by Anonymousreply 3410/09/2012

Not since the beginning of this year, which was your claim on another thread. And definitely not over the long haul, other than for brief periods when we're in a gold bubble, as we are today.

by Anonymousreply 3510/09/2012

12 years is a bubble.

R16/20/23/31/33/35 must work for the Federal Reserve or ECB.

by Anonymousreply 3610/10/2012

The Federal Aviation Administration is working towards putting the finishing touches on rules and regulations for widespread domestic drone use, and the agency expects as many as 30,000 UAVs will be in America’s airspace by the decade’s end. As Russia Today notes, given that the department has already addressed the issue of acquiring drones to give the DHS a better eye of domestic doings, though, those law enforcement operations in question could very well transcend away from legitimate uses and quickly cause civil liberty concerns from coast-to-coast. All drones will be equipped with Electro-Optical/Infra-Red sensors, as well as the technology to sniff out certain chemicals from thousands of feet above our heads. Have no fear though, since the "Robotic Aircraft for Public Safety" program is for your own protection, we are sure Janet Napolitano would suggest.

by Anonymousreply 3710/10/2012

[quote]12 years is a bubble.

Yes, actually, moron, it is. Just what do you think a bubble is? That it shows up literally overnight and disappears as quickly? It always takes time to build a bubble. Look at the housing market, for example. Or look at the last time that gold prices were in a bubble (see link). In fact, the last time that gold was in a bubble, it took ... wait for it ... 12 years to build the bubble before it popped!

Funny how you still can't bring yourself to acknowledge that gold is at inflation-adjusted historic highs, that it's in a bubble, that it's highly volatile these days, with massive ups and downs, and that stocks have outperformed gold in 2012, despite your claims to the contrary. Anyone buying gold 12 years ago got lucky. Anyone buying gold today is a moron.

Let us know when you'd like to return to reality, won't you?

by Anonymousreply 3810/10/2012

In the EPJ Daily Alert, I have been warning that because of this summer's drought meat prices would climb in 2013. It's part of a perfect storm scenario for higher prices in general.

The drought sent grain prices soaring, which resulted in many farmers sending their cattle to slaughter much sooner than usual, instead of paying the exorbitant grain prices. This early to slaughter move late this summer is now resulting in fewer cattle available to send to market now. The result: meat prices will soar. It's starting already. NyPo reports: The Midwest drought is putting a chill on the grill.

Meat prices are “through the roof,” said William Degel, owner of Uncle Jack’s Steakhouses in Midtown and Queens. “It’s at an all-time high.”

He says he’s been forced to serve smaller portions and raise prices — the porterhouse for two increased by $5 to $94 and the filet mignon by $2 to $35 for the 10-ounce and $45 for the 16-ounce.

“Even chopped meat has gone up dollars a pound,” Degel said.

The drought, the worst in at least 25 years, is affecting 80 percent of agricultural land, the US Department of Agriculture says. Midwestern farmers were hit hard by acres of shriveled corn and soybean crops over the summer.

Beef was already in short supply — a victim of earlier droughts and rises in the costs of fuel and feed. During this year’s drought, ranchers reluctant to buy expensive grain feed brought young — and thin — cattle to market early, which will spur another shortage and could threaten fatter cuts of beef.

“We have a fundamental disconnect between supply and demand,” said Richard Volpe, an economist with the Agriculture Department. “Prices are really high, and they’re only going higher.”

At the famed Peter Luger Steakhouse in Brooklyn, the New York strip is already up 11 percent, to $46.95, said owner Amy Rubenstein.

But nearly all restaurants are bracing for the worst.

Peter Glazier, owner of Michael Jordan’s Steak House, said meat purveyors are warning of increases of up to 20 percent in the coming year.

He is considering adding different choices of meat, such as sliced steak.

“You don’t have to go prime everywhere,” Glazier said.

Don’t expect any relief at the supermarket, where prices will pinch even harder.

“If you look at supermarket prices,” Volpe said, “it’s pretty clear that we’ve already seen some of the preliminary impacts of the drought. We’ve seen price hikes for things like beef, pork, poultry, eggs, dairy and other meats.”

The increases will continue by an expected 3 to 4 percent next year and will show up in the cost of packaged and processed foods — cereals and corn flour, for example — in 10 months to a year.

by Anonymousreply 3912/26/2012

What's hilarious, R39, is that you think this actually supports anything you've written here. It doesn't, of course, since the article, quite correctly, notes that it is the drought affecting prices, not the Federal Reserve, not bailouts, not conspiracy theories, not the gold standard, and not anything else you've been babbling about on this thread and elsewhere.

Oh, wait! I get it! The Federal Reserve created the drought! Now it's all clear!

by Anonymousreply 4012/26/2012

I thought this thread was about Lithuania. I was all up for some inflationary folk dancing.

by Anonymousreply 4112/26/2012

There is some truth to this. A few years ago you could take your pick of quality London whores for around 150GBP. Now the price is creeping towards 200, even 250.

In a truly free market you would think that the financial crisis in Europe would be flooding the market with Irish, Greek, misc. Eastern European and Spanish prostitutes all cutting their prices.

Market rates should be down, not up.

by Anonymousreply 4212/26/2012

R40

If it was simply the drought then prices would eventually drop. That isn't the case here- the rising inflation will make them even higher in 2014, even with great weather.

by Anonymousreply 4312/26/2012

[quote]If it was simply the drought then prices would eventually drop.

Depends on if/when the drought breaks, how much prices have risen because of the drought, and how much prices have risen because of inflation. In short, you don't know that.

[quote]That isn't the case here-

You don't know that, either, since you have no data to support your assertions.

[quote]the rising inflation will make them even higher in 2014, even with great weather.

Like I said....

In short, the article you quoted doesn't provide even one shred of evidence to support anything you've written here.

by Anonymousreply 4412/26/2012

Orange juice went from 64 ounces to 59 ounces a while ago. But luckily it's always on sale.

by Anonymousreply 4512/26/2012

R45, that's why the price inflation isn't obvious. Snacks went from 16 to 12 oz, or 12 to 10.

Look at the cost of milk, or beef, or lettuce, and compare it to 10 years ago. In most cases it is more than twice as expensive.

But, there is NO INFLATION according to the government.

by Anonymousreply 4612/26/2012

My 2nd favorite Chinese restaurant did this. Shrimp fried rice became veggie fried rice with two shrimps placed strategically at the top. Beef and broccoli became 80% broccoli, 20% beef. i went on Yelp to say something and discovered a dozen others had beaten me to it.

Months later they were closed. The #1 Chinese restaurant is still giving decent portions of meat and shrimp and their business is going great by the looks of it. They also upped their prices by $1.

I guess what I'm saying is, I think people respond better to straight up price inflation with consistent quality of product, than they do to consistent prices but a degradation in quality of product.

by Anonymousreply 4712/26/2012

[quote]that's why the price inflation isn't obvious. Snacks went from 16 to 12 oz, or 12 to 10. Look at the cost of milk, or beef, or lettuce, and compare it to 10 years ago. In most cases it is more than twice as expensive. But, there is NO INFLATION according to the government.

ROFL... Moron, as quantities shrink, that is recognized and covered in government statistics, since you end up having to buy more of whatever it is you're buying.

And nobody is saying that there is "NO INFLATION." We're simply pointing out that inflation is under control, that it is under the 2% mark that the Fed has been aiming at. That hyperinflation you've been promising for the past five years just hasn't developed, nor can it under the current conditions.

Ron Paul, one of your idols, specifically promised 50% inflation. Well, where is it? If your economic theories were correct, we'd be seeing that hyperinflation by now. Hell, we'd have seen it 3 or 4 years ago. Alas for you, your economic theories aren't correct, so you'll continue to make these wild predictions and wild conspiracy theories and you will continue to be wrong.

by Anonymousreply 4812/26/2012

"ROFL... Moron, as quantities shrink, that is recognized and covered in government statistics, since you end up having to buy more of whatever it is you're buying."

No, the "hedonics" of the CPI mean that ground beef is substituted for filet, and canned corn is subbed for fresh. They switch it up month by month. You really don't understand how these figures are calculated.

If the price of firewood drops while the cost of propane (for heating) rises, they use the lower figure.

Just go back, pick 20 random items from 2002, and look at the increase in price. It shows a 6% inflation rate, but the government fudges the stats to make it look far lower. They also heavily weight the one thing the government doesn't have total control over- electronics- to adjust the figure down. They compare a 40" flat screen at the same price a 20" tube TV, or a $2,000 laptop compared to a $300 laptop- and use the fact that it's far better and faster to adjust the figure.

The word "quisling" was invented for people like you.

by Anonymousreply 4912/26/2012

Doom

by Anonymousreply 5012/27/2012

That was my favorite Andy Gibb song

Shadow inflation...

by Anonymousreply 5112/27/2012

It's called HAARP, R40.

by Anonymousreply 5212/27/2012

[quote]No, the "hedonics" of the CPI mean that ground beef is substituted for filet, and canned corn is subbed for fresh. They switch it up month by month. You really don't understand how these figures are calculated.

ROFL.... Oh, the irony.... Moron, what you're referring to is the "chained CPI," which is not (yet) the way that inflation is calculated.

[quote]The word "quisling" was invented for people like you.

LOL... So I'm a "traitor" for telling the truth? Interesting viewpoint you have. The word "moron" was invented for people like you.

by Anonymousreply 5312/27/2012

The truth, R53? How about admitting that the Federal Reserve is stealing trillions from the taxpayer to give to the big banks and their benefactors.

Quisling means someone who lies for their government master- you fit it to a tee.

by Anonymousreply 5412/28/2012

Christ but I wish the Resident Libertarian Idiot Troll (RLIT) would stop bumping his own threads.

by Anonymousreply 5512/28/2012

December's inflation rate: 1.8%

In related news, Libertarians are fucking morons.

by Anonymousreply 5612/28/2012

[quote]How about admitting that the Federal Reserve is stealing trillions from the taxpayer to give to the big banks and their benefactors.

Why would I "admit" something that's false?

[quote]Quisling means someone who lies for their government master- you fit it to a tee.

ROFL.... What's your excuse for lying, then?

by Anonymousreply 5712/28/2012

[quote]Christ but I wish the Resident Libertarian Idiot Troll (RLIT) would stop bumping his own threads.

Not going to happen. He's been doing this for at least a couple of years now, sometimes bumping posts that are more than a year old.

It's the same old pattern, over and over again. He bumps a post or starts a new one, he gets his ass handed to him, and either he temporarily gives up or the webmaster deletes or locks the thread due to the trolling.

He goes away for a month or two, then comes back to start the whole process over again. Just ignore him or laugh at him. That's all you can do.

by Anonymousreply 5812/28/2012

But Shadow Inflation is a real problem and one we need to keep in front of us as we ascertain if what is being called "Recovery" really is so.

by Anonymousreply 5912/28/2012

Opened some yogurt and after mixing it up and stirring it I noticed it was only 2/3 full.

by Anonymousreply 6012/28/2012

R60- look at how often they "change the metrics" for government stats.

The unemployment rate is useless if less than 60% of the people are working (lower than in the 60s) and the number of "part time" employees has tripled.

I would rather have unemployment at 10% with 99% working full time at good wages, than a 5% unemployment where 30% are part time at minimum wage.

Anyone who believes government stats, on anything, is deluded.

by Anonymousreply 6112/28/2012

In LA, we're losing many of of old, iconic restaurants. Most of them serve inexpensive fun food, further limiting the working class to chain fast food when they want a quick snack.

Just this week, the local news has profiled four different eateries that are shutting their doors.

by Anonymousreply 6212/29/2012

And a chicken in every pot sounds like a great idea, that is, unless you happen to be a chicken.

by Anonymousreply 6312/29/2012

R62-

Look at how many government agencies can shut them down for bullshit reasons, and that explains why many "mom n pop" restaurants are closing. Add the taxes, multiple regulations, and now Obamacare...it's just the start.

by Anonymousreply 6412/30/2012

I do so love your fact-free rants, R64. Free clue: there's a reason why restaurants have struggled for the past few years.

And, as usual, you did not, and cannot, support your silly assertions. Next?

by Anonymousreply 6512/30/2012

R66-

You should be banned for bullshit like that.

Obama is as bad as Bush, but mocking HIV is NOT funny, or acceptable.

The fact that some posters are too ignorant to see how these regulations destroy small businesses is no reason to post fucked up bullshit like that.

by Anonymousreply 6712/30/2012

Now, this IS acceptable mockery.

(For those too delicate to click, it shows a business owner with the text)

"Should I comply with Obamacare and tax hikes until I'm destitute and can't make payroll...Or close shop while I've still got enough to live on? Ohhhh, this is tough!"

by Anonymousreply 6812/30/2012

[quote]Now, this IS acceptable mockery. For those too delicate to click, it shows a business owner with the text)

ROFL.... R68, too bad you can't support your idiotic assertions with anything resembling real data. That cartoon is the best you can do? Particularly a lame, heavy-handed cartoon like that? That's just sad.

It's always the way, though. Idiots like you always talk about "business-destroying regulations" but then can't ever seem to come up with any examples. Or any data to support your silliness.

Oh, well, at least you're consistent. And funny.

by Anonymousreply 6912/30/2012

What is unsaid here is that if interest rates rise, even marginally, from +/-1.75% to 3%, the effect on borrowing costs for the USA would be devastating.

See the link-

-------

Paul Krugman is out with a fascinating post, Debt in a Time of Zero.

In a somewhat convoluted fashion (at one point he discusses issuing a trillion dollar platinum coin to payoff debt), he pretty much admits that price inflation is a real threat and that the Fed will have to fight it by shrinking the money supply. He writes (my bold).

It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought.

Thus, the most that Krugman can argue is the timing of developing price inflation threat, and perhaps severity. But, is Krugman more concerned than he lets on? Has he planted this inflation warning so that he can in the future point back and say, "Yes, as the start of 2013, I was fully aware that inflation would come to haunt"? And then blame accelerating price inflation on the failure  of the Fed to respond in quick enough fashion?

Further, does he seriously think the Fed is going to be able to "pull back" on the monetary base, without massive upheaval in the bond market? Here, Krugman is missing the BIG upheval that's coming, even though he may be starting to fear the price inflation.

by Anonymousreply 7001/03/2013

R70 is a typical Libertarian Fascist.

by Anonymousreply 7101/03/2013

Actually, R70 is a moron, and so is the idiot who wrote that post he's quoting. They're reading *way* too much into what Krugman wrote. All Krugman is saying is that the Fed is going to do what it has done dozens of times previously. It was an educational blog post explaining why the Fed can't just "print money" forever.

It's fundamental macroeconomics, from Econ 101: the Fed, along with the federal government, needs to act counter-cyclically. When the economy is down, they spend; when the economy recovers, they pull back. They've done this countless times in the past, each time without incident.

Sadly, neither Robert Wenzel nor our resident troll bothered to actually try to understand what Krugman was talking about, so they're forever stuck with an economic belief system that is firmly grounded in fantasy rather than reality.

by Anonymousreply 7201/03/2013

R72 is a Fascist for calling me a moron. As any Libertarian knows, people who use the term "moron" are all fascists.

by Anonymousreply 7301/03/2013

No, R73. He's a realist for calling you a moron.

by Anonymousreply 7401/03/2013

Bumping for when interest rates do rise, and government debt becomes toxic.

by Anonymousreply 7501/04/2013

You've been predicting that for years. And yet, somehow, like all of your predictions, it never actually happens. Why is that?

by Anonymousreply 7601/04/2013

R75, is your name Steve by any chance? Just a hunch.

by Anonymousreply 7701/04/2013

Because people don't like to pay for what things actually cost. That is why we are in debt as individuals and as a nation.

by Anonymousreply 7801/04/2013

R78

We "pay" with dollars because it is the accepted medium.

Over the last few decades what we "pay with dollars" has been systematically reduced due to the Federal Reserve printing more money. Every dollar they print makes every dollar in your wallet less valuable.

That's why gold has gotten so expensive w/r/t the dollar.

by Anonymousreply 7901/04/2013

[quote]Over the last few decades what we "pay with dollars" has been systematically reduced due to the Federal Reserve printing more money. Every dollar they print makes every dollar in your wallet less valuable.

Actually, dear, it doesn't work that way, which is why we haven't seen the massive hyperinflation you've been predicting for years. You really should look at the real world before writing the drivel that you do, since so much of what you write makes no sense.

[quote]That's why gold has gotten so expensive w/r/t the dollar.

Dear heart, gold is expensive because idiots have driven up the price until it's in a bubble, much the way real estate was a short time ago, It has zilch to do with the Federal Reserve or inflation. Since it peaked in late 2011 and has been down or flat since then, I'm afraid that, as usual, you're dead wrong.

by Anonymousreply 8001/04/2013

So, putting in Bulshit substitutes as a way of "controlling" price inflation is the latest tool. Don't ask what is in the ground beef!

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Oscar Wilde once said, "A cynic is someone who knows the price of everything and the value of nothing."

If he was right, the supermarket aisles of America are probably crowded with coffee-drinking "cynics" right now.

Reuters is reporting that many of America's major brands have been quietly tweaking their coffee blends. While most coffee companies consider their blends trade secrets, and are loath to disclose exactly what goes into them, both circumstantial and direct evidence suggests they're now substituting lower-grade Robusta beans for some of their pricier Arabica, and degrading the quality of our coffee.

Here's What's Brewing

Research out of agricultural bank Rabobank confirms that demand for Arabica beans among coffee buyers "has fallen 27% year-to-date, while Robusta [demand] is 25% higher." This seems to confirm a widespread alteration of the bean mix.

At least one coffee roaster has admitted it. In November, Massimo Zanetti USA, which roasts for both Chock full o'Nuts and Hills Bros., publicly confirmed upping its Robusta usage by 25% this year.

Why the switcheroo? Prepare to not be shocked. The answer is: price.

Last year, a shortage of Arabica caused prices of the premium bean to spike as high as $3 a pound -- $2 more than what a pound of Robusta would cost. This compares to a five-year historical trend of Arabica costing closer to 70 cents more than Robusta. In recent weeks, the trend has reversed, with Arabica prices falling to just a 62-cent premium over Robusta.

What's It Mean to You?

If you're a coffee purist, then this all probably sounds like dirty pool.

But really, all the coffee companies are doing is trying to match demand for their product with a price people are willing to pay. And already, mainstream coffee brands such as Kraft's (KFT) Maxwell House and J.M. Smucker's (SJM) Folgers have responded to falling coffee prices by lowering the prices they charge consumers.

More premium coffee purveyors such as Starbucks (SBUX), in contrast, have been slow to follow suit.

When you get right down to it, if there's more Robusta in our coffee but people still find it drinkable, and the coffee's getting a bit cheaper in consequence, where's the harm?

by Anonymousreply 8101/06/2013

R81, shocking! Companies are adjusting their behavior due to increases in the costs of certain goods? Oh my god, you've discovered Econ 101.

by Anonymousreply 8201/06/2013

That is absolutely mindblowing, R82...whodathunkit?

What's hilarious is that R81's post is pretty much irrelevant to anything he's been arguing about, on this thread or his many other threads.

by Anonymousreply 8301/06/2013

R82&83

It's totally relevant.

The rise in food prices is being disguised by these methods. By substituting inferior product- be it in hot dogs, cereal, cooking oils, etc.- the standard of living is being reduced. Not to mention the smaller packaging for the same price. Only a Harvard edumacated eCONomist could argue otherwise.

How can you not see that as germane to the discussion?

by Anonymousreply 8401/06/2013

[quote]How can you not see that as germane to the discussion?

Well, mostly because I'm neither an ideologue nor a moron. You, on the other hand....

Tell us again about the price of gold. We can use another good fairy tale.

by Anonymousreply 8501/07/2013

"For the past several years, we have been conducting this event at a lovely resort in the Lithuanian countryside."

White. People. Problems.

by Anonymousreply 8601/07/2013

R85-

That's not an answer. It's just ignorant bitchery.

Well, I guess that's appropriate for this site.

Gold owners are doing better than the stock market, so who's the fool?

by Anonymousreply 8701/07/2013

[quote]That's not an answer. It's just ignorant bitchery.

ROFL.... Then you should feel right at home, snookums, since that's all you post. Man, you really don't like it when your own tactics are used against you, do you?

[quote]Gold owners are doing better than the stock market, so who's the fool?

Dear heart, we've been through this. The stock market outperformed gold in 2012. And has outperformed gold the overwhelming majority of the time during the past 100 years, with the sole exception the two 12-year bubbles.

So who's the fool? You, apparently.

by Anonymousreply 8801/07/2013

Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

by Anonymousreply 8901/12/2013

Dear heart, we heard you the first time. Posting such inaccurate drivel on multiple threads doesn't make the drivel any more accurate. It just identifies you as a spammer, and an ignorant one at that.

by Anonymousreply 9001/13/2013

Maybe one day you will read it and understand why the current fiat money system is doomed.

by Anonymousreply 9101/13/2013
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