[quote=4plexowner] how do people accommodate inflation in consumer goods and services at the same time they are losing their jobs and their wealth (stocks and real estate)? – do these factors increase the lag time on inflation? – do these factors prevent the inflation from occurring at all? – at some point prices can’t go higher because demand drops to zero?[/quote]
This has been my question. Everything the Fed is doing is screaming hyper-inflation down the road. BUT w/unemployment so high (I hear 20% in Detroit – surprised not more) and 10.5 in CA, I’m at a loss.
And again, these are reported numbers. We know that number is higher b/c it doesn’t factor in when you can’t refile. Although I heard they have extended that to something ridiculous like 36 months. But of course, the longer you are unemployed the harder it is to find a job. Double-edge sword there.
As I stated also, you can’t file unemployment if you’re a small business owner closing shop, if you are self-employed, if you work under the table, if you are a full-time student working part time and lose your job. I did hear if you were full time, reduced to part time, you can try to get unemployment to help w/the diff. Not 100% sure. Not sure how that’ll work w/forced furlough.
So all this to say that that unemployment number is much greater than stated. W/unemployment being so high, how can we have inflation? If you have no money and you can’t buy then how can companies stay in business? It will be a domino effect of mass proportions.
If we see inflation at the same time unemployment continues to rise, then – if we aren’t there already – we will for sure see a depression.
arraya – the rules continue to change along the way like an ocean’s current. The rules at the beginning of this real estate bubble were different w/the over-expansion of credit.
