Stagflation?

[an]

Are we repeating the 70s stagflation?

http://a.msn.com/r/2/AAgljtT?ocid=News

That would awesome.

[The-Shoveler]

Repeat of the 1980’s seems more likely.

We are in about the same demographic situation.

Just looking at the demographics.

Maybe a little bit of both.

[paramount]

[quote=The-Shoveler]Repeat of the 1980’s seems more likely.

We are in about the same demographic situation.

Just looking at the demographics.

Maybe a little bit of both.[/quote]

With trillions upon trillions of more debt, not likely…

[The-Shoveler]

Were you around in the late 80’s?

The National Debt was going through the roof at that time as well, many were very concerned about it.

The 70’s left us very much in debt after the hot and cold war.

Percentage wise I think it was very close.

[paramount]

There’s evidence all around:

Sales of existing homes plunged 10.5% in November 2015.

[an]

[quote=paramount]There’s evidence all around:

Sales of existing homes plunged 10.5% in November 2015.[/quote]
Evidence? Where? My area have well less than 1 month supply of SFR. So of course sales would have to decline. There’s not a lot of homes for sale.

[The-Shoveler]

To get stagflation you would need two things.

1) unions

2) inflation measured the same way it was before 1981.

They have been discounting the real inflation rate since 1981, that was the REAL reason for the decline of the middle class, think of it as compounding interest in reverse (wage growth in reverse).

[paramount]

As unions go so goes the middle class?

[The-Shoveler]

No but if inflation goes up 10% your wages go up 15% even if your market share declines if you have a strong union.

See Auto workers in the 1970’s.

It’s complex.

Food, clothes and basic cars were a lot more expensive in 1980 than it is today (percentage wise).

Like I said it was more about the inflation measurement than anything else.

If house prices went up your cost of living wage increase went up, if gas went up you also got a raise.

they took that out in 1981

[Anonymous]

[quote=The-Shoveler]To get stagflation you would need two things.

1) unions

2) inflation measured the same way it was before 1981.

They have been discounting the real inflation rate since 1981, that was the REAL reason for the decline of the middle class, think of it as compounding interest in reverse (wage growth in reverse).[/quote]

If we started measuring inflation the old fashioned way, would everyone get a bigger raise next year?

[The-Shoveler]

Yep if you got cost of living wage increases.

if you just got cost of living wage increases you have been going backwards since 1981

[flyer]

Might not be a very pretty picture for many. From a recent article on the topic:

“Stagflation is when you have stagnation in growth rates along with inflation in your day-to-day life. So there is a double whammy with stagflation.

There is no growth in the environment, which means no jobs or no real jobs with real growth behind it. Added to that sad state is a heavy dose of inflation. So as your wages hold steady, if you even have a job, the costs of living in all areas around you go up. This will ensure that your standard of living declines as time goes by. This is the stuff social revolutions are made of.”

[The-Shoveler]

Could be a bit of both,

Anyway you look at it though they need to build a lot more homes or squeeze a lot more people into the same living space,
(that is the demographics of the situation).

To me a repeat of the 1980’s seems a lot more likely than a repeat of the 70’s.

But that is just my opinion.

.

[Anonymous]

And what percent of the workforce has their incomes tied solely to the govt. inflation numbers?

Answer: Not enough to make a difference.

Supply and demand still rules the day.

But maybe the 70s will make a comeback. Star Wars is back.

[The-Shoveler]

I was getting 10-15% wage increases in the 1970’s

True a lot of that was performance/merit etc…

But house prices, cars ect.. were going up about that as well.

The lower you are on the ladder the more those cost of living increase mean. and in 1970, if house price increased, you got a higher Cost of living increase (not rent, the price of a home)

[Author]

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