How do you feel about the future of US?

[werewolf34]

Two types of inflation in my mind: 1) price to consumer and 2) price of ‘assets’

1) Inflation in gas prices, groceries are real things. Premium was $1.45 in CA in 2002 and is $3.30 at the same gas station today. May not feel like inflation b/c these items inflated before / during the RE bubble. $3.30 is cheap if you remember it being $4.50 beforehand. Do the same math with a gallon of milk. I remember 2.50 in the early 2000s and see 4.50 to 5.00 nowadays

2) Cash earning near 0% in bank accounts is fleeing to hard assets and equities. Can someone explain to me why most of the S&P is trading above 10 yr averages in midst of recession?

If you follow the ‘smart’ money, John Paulson is long into gold.

The bigger x-factor in inflation/deflation is the reduction in consumer credit from the banks.

[Nor-LA-SD-guy]

You can still get milk for $2.70 a Gal at Ralph’s and Winco,

The only way I see inflation is if the Chinese start to become the new Americans and we become the new Chinese, I can see a little of that but if that bursts then all bets are off and we are back to deflation big time.

The internet and Globalization are extremely deflationary.

Oil will only continue to go up until we all are driving cars that get over 40 miles a gallon or use NG or no gas, very doable IMO.

[Nor-LA-SD-guy]

You can still get milk for $2.70 a Gal at Ralph’s and Winco,

The only way I see inflation is if the Chinese start to become the new Americans and we become the new Chinese, I can see a little of that but if that bursts then all bets are off and we are back to deflation big time.

The internet and Globalization are extremely deflationary.

Oil will only continue to go up until we all are driving cars that get over 40 miles a gallon or use NG or no gas, very doable IMO.

[Nor-LA-SD-guy]

You can still get milk for $2.70 a Gal at Ralph’s and Winco,

The only way I see inflation is if the Chinese start to become the new Americans and we become the new Chinese, I can see a little of that but if that bursts then all bets are off and we are back to deflation big time.

The internet and Globalization are extremely deflationary.

Oil will only continue to go up until we all are driving cars that get over 40 miles a gallon or use NG or no gas, very doable IMO.

[Nor-LA-SD-guy]

You can still get milk for $2.70 a Gal at Ralph’s and Winco,

The only way I see inflation is if the Chinese start to become the new Americans and we become the new Chinese, I can see a little of that but if that bursts then all bets are off and we are back to deflation big time.

The internet and Globalization are extremely deflationary.

Oil will only continue to go up until we all are driving cars that get over 40 miles a gallon or use NG or no gas, very doable IMO.

[Nor-LA-SD-guy]

You can still get milk for $2.70 a Gal at Ralph’s and Winco,

The only way I see inflation is if the Chinese start to become the new Americans and we become the new Chinese, I can see a little of that but if that bursts then all bets are off and we are back to deflation big time.

The internet and Globalization are extremely deflationary.

Oil will only continue to go up until we all are driving cars that get over 40 miles a gallon or use NG or no gas, very doable IMO.

[blahblahblah]

I’ve done a lot of travel in Europe – except for the filthy rich – people live smaller… smaller houses and apartments, smaller cars, less stuff… We could learn a lesson.

Sounds good to me as long as we get all the nice stuff they enjoy like quality public transport, medical care, free university, pensions, 4+ weeks vacation mandatory, labor rights, etc…

People there basically make a deal to live with less in exchange for a tremendous amount of benefits. Here we’ll be living with less and no benefits at all. France probably isn’t a good example of what the future US will be like, but Mexico might not be too far off the mark…

[blahblahblah]

I’ve done a lot of travel in Europe – except for the filthy rich – people live smaller… smaller houses and apartments, smaller cars, less stuff… We could learn a lesson.

Sounds good to me as long as we get all the nice stuff they enjoy like quality public transport, medical care, free university, pensions, 4+ weeks vacation mandatory, labor rights, etc…

People there basically make a deal to live with less in exchange for a tremendous amount of benefits. Here we’ll be living with less and no benefits at all. France probably isn’t a good example of what the future US will be like, but Mexico might not be too far off the mark…

[blahblahblah]

I’ve done a lot of travel in Europe – except for the filthy rich – people live smaller… smaller houses and apartments, smaller cars, less stuff… We could learn a lesson.

Sounds good to me as long as we get all the nice stuff they enjoy like quality public transport, medical care, free university, pensions, 4+ weeks vacation mandatory, labor rights, etc…

People there basically make a deal to live with less in exchange for a tremendous amount of benefits. Here we’ll be living with less and no benefits at all. France probably isn’t a good example of what the future US will be like, but Mexico might not be too far off the mark…

[blahblahblah]

I’ve done a lot of travel in Europe – except for the filthy rich – people live smaller… smaller houses and apartments, smaller cars, less stuff… We could learn a lesson.

Sounds good to me as long as we get all the nice stuff they enjoy like quality public transport, medical care, free university, pensions, 4+ weeks vacation mandatory, labor rights, etc…

People there basically make a deal to live with less in exchange for a tremendous amount of benefits. Here we’ll be living with less and no benefits at all. France probably isn’t a good example of what the future US will be like, but Mexico might not be too far off the mark…

[blahblahblah]

I’ve done a lot of travel in Europe – except for the filthy rich – people live smaller… smaller houses and apartments, smaller cars, less stuff… We could learn a lesson.

Sounds good to me as long as we get all the nice stuff they enjoy like quality public transport, medical care, free university, pensions, 4+ weeks vacation mandatory, labor rights, etc…

People there basically make a deal to live with less in exchange for a tremendous amount of benefits. Here we’ll be living with less and no benefits at all. France probably isn’t a good example of what the future US will be like, but Mexico might not be too far off the mark…

[DWCAP]

[quote=Nor-LA-SD-guy]OK I just don’t see inflation happening,
Really have you guy’s thought this through,

You need near full employment to have inflation I would think, and we really can be self sufficient in the U.S.A believe it or not, it may take five years but we have the ability to do it (the point is they need us a lot more than we need them who ever they are).

Deflation I think is still the rule of the day, maybe in five years we can talk about inflation again but the world will be a different place in five years so it is almost pointless to speculate.

If the China bubble does burst commodities will bust too, I think that will go a long way toward easing inflation as well but I am not a big believer that china bubble will burst anytime in the next few years either.[/quote]

You confuse price inflation with monitary inflation. I am sure there are a thousand threads on piggington playing with this, and a billion or two on the WWW, so I am not really gonna go into it. But the Fed can ‘print money’ and buy US bonds, allowing the government to repay our foreign creditors. That is monitary inflation, and isnt guarenteed to do anything to our prices here in the USA. As long as that money stays off shore, and people are willing to accept it, it wont hurt us too bad. Please see the ‘print and deny’ comment.

And you dont need to have full employment to have price inflation as you talked about.

[quote]Both the civilian unemployment rate and the rate of change in consumer prices deteriorated in the second half of the decade. Between 1970-74, the average annual unemployment rate was 5.4 percent, while the average annual change in the Consumer Price Index (CPI) was 6.6 percent. From 1974-79, the figures edged up to 7.9 percent for unemployment and 8.1 percent for the CPI. [/quote]

http://www.bls.gov/opub/cwc/cm20030124ar05p1.htm

And while I agree that the world will be a very different place in 5 years, we do need to worry about it because the AVERAGE length of treasury debt right now is something like 4 years. You live in a very narrow world if you think 4-5 years is a long ways off.

[DWCAP]

[quote=Nor-LA-SD-guy]OK I just don’t see inflation happening,
Really have you guy’s thought this through,

You need near full employment to have inflation I would think, and we really can be self sufficient in the U.S.A believe it or not, it may take five years but we have the ability to do it (the point is they need us a lot more than we need them who ever they are).

Deflation I think is still the rule of the day, maybe in five years we can talk about inflation again but the world will be a different place in five years so it is almost pointless to speculate.

If the China bubble does burst commodities will bust too, I think that will go a long way toward easing inflation as well but I am not a big believer that china bubble will burst anytime in the next few years either.[/quote]

You confuse price inflation with monitary inflation. I am sure there are a thousand threads on piggington playing with this, and a billion or two on the WWW, so I am not really gonna go into it. But the Fed can ‘print money’ and buy US bonds, allowing the government to repay our foreign creditors. That is monitary inflation, and isnt guarenteed to do anything to our prices here in the USA. As long as that money stays off shore, and people are willing to accept it, it wont hurt us too bad. Please see the ‘print and deny’ comment.

And you dont need to have full employment to have price inflation as you talked about.

[quote]Both the civilian unemployment rate and the rate of change in consumer prices deteriorated in the second half of the decade. Between 1970-74, the average annual unemployment rate was 5.4 percent, while the average annual change in the Consumer Price Index (CPI) was 6.6 percent. From 1974-79, the figures edged up to 7.9 percent for unemployment and 8.1 percent for the CPI. [/quote]

http://www.bls.gov/opub/cwc/cm20030124ar05p1.htm

And while I agree that the world will be a very different place in 5 years, we do need to worry about it because the AVERAGE length of treasury debt right now is something like 4 years. You live in a very narrow world if you think 4-5 years is a long ways off.

[DWCAP]

[quote=Nor-LA-SD-guy]OK I just don’t see inflation happening,
Really have you guy’s thought this through,

You need near full employment to have inflation I would think, and we really can be self sufficient in the U.S.A believe it or not, it may take five years but we have the ability to do it (the point is they need us a lot more than we need them who ever they are).

Deflation I think is still the rule of the day, maybe in five years we can talk about inflation again but the world will be a different place in five years so it is almost pointless to speculate.

If the China bubble does burst commodities will bust too, I think that will go a long way toward easing inflation as well but I am not a big believer that china bubble will burst anytime in the next few years either.[/quote]

You confuse price inflation with monitary inflation. I am sure there are a thousand threads on piggington playing with this, and a billion or two on the WWW, so I am not really gonna go into it. But the Fed can ‘print money’ and buy US bonds, allowing the government to repay our foreign creditors. That is monitary inflation, and isnt guarenteed to do anything to our prices here in the USA. As long as that money stays off shore, and people are willing to accept it, it wont hurt us too bad. Please see the ‘print and deny’ comment.

And you dont need to have full employment to have price inflation as you talked about.

[quote]Both the civilian unemployment rate and the rate of change in consumer prices deteriorated in the second half of the decade. Between 1970-74, the average annual unemployment rate was 5.4 percent, while the average annual change in the Consumer Price Index (CPI) was 6.6 percent. From 1974-79, the figures edged up to 7.9 percent for unemployment and 8.1 percent for the CPI. [/quote]

http://www.bls.gov/opub/cwc/cm20030124ar05p1.htm

And while I agree that the world will be a very different place in 5 years, we do need to worry about it because the AVERAGE length of treasury debt right now is something like 4 years. You live in a very narrow world if you think 4-5 years is a long ways off.

[DWCAP]

[quote=Nor-LA-SD-guy]OK I just don’t see inflation happening,
Really have you guy’s thought this through,

You need near full employment to have inflation I would think, and we really can be self sufficient in the U.S.A believe it or not, it may take five years but we have the ability to do it (the point is they need us a lot more than we need them who ever they are).

Deflation I think is still the rule of the day, maybe in five years we can talk about inflation again but the world will be a different place in five years so it is almost pointless to speculate.

If the China bubble does burst commodities will bust too, I think that will go a long way toward easing inflation as well but I am not a big believer that china bubble will burst anytime in the next few years either.[/quote]

You confuse price inflation with monitary inflation. I am sure there are a thousand threads on piggington playing with this, and a billion or two on the WWW, so I am not really gonna go into it. But the Fed can ‘print money’ and buy US bonds, allowing the government to repay our foreign creditors. That is monitary inflation, and isnt guarenteed to do anything to our prices here in the USA. As long as that money stays off shore, and people are willing to accept it, it wont hurt us too bad. Please see the ‘print and deny’ comment.

And you dont need to have full employment to have price inflation as you talked about.

[quote]Both the civilian unemployment rate and the rate of change in consumer prices deteriorated in the second half of the decade. Between 1970-74, the average annual unemployment rate was 5.4 percent, while the average annual change in the Consumer Price Index (CPI) was 6.6 percent. From 1974-79, the figures edged up to 7.9 percent for unemployment and 8.1 percent for the CPI. [/quote]

http://www.bls.gov/opub/cwc/cm20030124ar05p1.htm

And while I agree that the world will be a very different place in 5 years, we do need to worry about it because the AVERAGE length of treasury debt right now is something like 4 years. You live in a very narrow world if you think 4-5 years is a long ways off.

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