[quote=pri_dk][quote=earlyretirement]
I do think Obama could have done some things differently but he couldn’t really have changed the destiny of all the horrible things going on in the economy and the fallout from years of “sins” from Wall Street.
That’s just the plain truth.[/quote]
Funny thing is I think most people understand this, but they still put the blame on whomever is in charge at the moment.
Back to the topic:
For the economic historians out there: has there ever been a period of inflation without wage growth?
Exactly how could that happen (outside of a scenario where there is a disruption in supply of goods, such as a war)?
Who is going to pay these higher prices if they don’t have any money? What would drive prices up even higher?[/quote]
Right now.
We’ve been experiencing cost inflation without wage inflation. That’s because the traders (who now pretty much control the world) are expecting inflation, so they’ve been buying up assets in anticipation of the currency crisis/money printing. The traders (the VERY wealthy who do not have to work for a living) have plenty of money and are not affected directly by wage inflation/deflation. They are trading against each other at this point.
Eventually, they will realize that there is no organic demand (yep, used that term again) for these assets at the traders’ expected prices. The “organic” end-users/consumers ARE affected by wage inflation/deflation, so asset prices will eventually go down unless wages suddenly go up, IMHO.
Unless they tweak tax and trade policies, I have no reason to believe wages will go up. That’s why I’m a deflationist, but acknowledge the potential for inflation that results from excess monetary printing/a currency crisis — which will probably have even more catastrophic consequences than deflation, IMO.
