tag:blogger.com,1999:blog-3758330678390419129.post1337523082993014876..comments2024-02-13T02:39:22.756-05:00Comments on EconomicPolicyJournal.com: How Quickly Can Price Inflation Explode to the Upside?Robert Wenzelhttp://www.blogger.com/profile/14296920597416905488noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-3758330678390419129.post-78517619193910679232012-03-21T05:52:28.522-04:002012-03-21T05:52:28.522-04:00This article writes: "the consumer price inde...This article writes: "the consumer price index for urban areas, went from 1 percent for 1915 to 7 percent in 1916 to 17 percent in 1917. To returning vets, that felt awful sudden." Yes, in fact it felt like a time warp, since the US didn't *enter* WWI until 1917 and the veterans were returning from the future.<br /><br />You gold nuts wonder why you're not part of the Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-77548380512286995892012-03-19T15:24:29.514-04:002012-03-19T15:24:29.514-04:00Gold and silver will do much better because they a...Gold and silver will do much better because they are going to be the new preferred currency. Much of the money currently in the treasury and fiat currency markets will be forced into precious metals. Average people will eventually be scrambling to get their hands on gold and silver. When you see the masses literally lining up outside of local coin shops to buy, it may be time to think about Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-64990454878607315752012-03-16T09:18:05.154-04:002012-03-16T09:18:05.154-04:00Not that this analogy isn't great and hugely a...Not that this analogy isn't great and hugely accurate, I'd like to point out it is similar to Nassim Taleb's stadium filling with water example from The Black Swan. Instead of having a lot of bacteria, you drown instead.<br /><br />The suddenness of the "event's" occurence is what's important. Everything seems fine, until it's not.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-83028509879465400772012-03-15T23:58:36.294-04:002012-03-15T23:58:36.294-04:00So under the above inflationary scenario will gold...So under the above inflationary scenario will gold and silver be a good hedge or will they just go up with everything else? No more, no less. If we have inflation then there will be know more QE, so precious metals may lose their edge.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-7553882592361972922012-03-15T18:58:20.780-04:002012-03-15T18:58:20.780-04:00Considering most WW2 price controls were lifted in...Considering most WW2 price controls were lifted in the fall of 1946 it isn't hard to believe there was a quick spike up in the following years. Also one may remember Nixon imposed controls in the early 70s which I suspect may distort CPI numbers then. In "honor" of Cato institute :) http://www.cato-at-liberty.org/the-unhappy-40th-anniversary-of-nixons-wage-and-price-controls/Josiahnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-24195943872897454962012-03-15T16:48:57.175-04:002012-03-15T16:48:57.175-04:00I remember '80, '81.
12 - 14% on a '...I remember '80, '81. <br /><br />12 - 14% on a 'factory financed' new car loan was a GREAT deal.<br /><br />Mortgage rates over 20%. People walking away from their homes when their mortgages came up for renewal & there was absolutely no way they could make the payments. Many didn't have enough equity to qualify to re-fi at the suddenly MUCH higher rates. <br /><br />We'Roy Cobdenhttp://roycobden.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-3419635966991762982012-03-15T15:34:30.201-04:002012-03-15T15:34:30.201-04:00It seems to me, Robert, if you look at current CPI...It seems to me, Robert, if you <a href="http://www.shadowstats.com/imgs/sgs-cpi.gif?hl=ad&t=" rel="nofollow">look at current CPI as measured in 1980</a>, we're pretty much there right now.<br /><br />I'm not the original poster, but I was a teen in college during the late '70s. The only difference now seems to be that the government has rigged the stats, and now people see the Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-20549054343317353032012-03-15T13:56:40.144-04:002012-03-15T13:56:40.144-04:00Didn't think I would like this analogy, and I ...Didn't think I would like this analogy, and I didn't...<br /><br />I LOVED it! <br /><br />Great job BBH!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-2136018597079501702012-03-15T12:22:04.178-04:002012-03-15T12:22:04.178-04:00Your comment tells me that you didn't live thr...Your comment tells me that you didn't live through the inflation of the late-1970s/early-1980s. If you think anything since has come close, you have no idea what the70s/80s were about and no idea as to what is about to hit.<br /><br />Further, it is not how important Shlaes is but the fact that she is among the first to discuss how fast price inflation can accelerate.Robert Wenzelhttps://www.blogger.com/profile/14296920597416905488noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-64691139946996347132012-03-15T12:10:56.050-04:002012-03-15T12:10:56.050-04:00People keep talking about another round of QE. But...People keep talking about another round of QE. But does the FED really need it? After all, the funds rate at <0.25% for the past three years and for the foreseeable future is highly inflationary, and accomodative to the banking sector, in and of itself. Remember the housing bubble. It was able to reach the magnitude that it did with the funds rate at 1.0% for just a year. What kind of Johnnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-22663579083505808642012-03-15T11:31:17.471-04:002012-03-15T11:31:17.471-04:00I like to compare inflation to bacteria.
'&#...I like to compare inflation to bacteria. <br /><br />''A scientist is experimenting with bacteria that are one micron in diameter and that reproduce by dividing every minute into two bacteria. At 12:00 PM, she puts a single organism in a container. At precisely 1:00 PM, the container is full.<br /><br />Q: At what time was the container half full?<br />A: 12:59PM. <br /><br />Q: When BBHhttps://www.blogger.com/profile/15705384220477624679noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-65360999787715433642012-03-15T10:51:25.529-04:002012-03-15T10:51:25.529-04:00But what to do? My only savings is $35K in a 401K...But what to do? My only savings is $35K in a 401K rollover account. I either get whipsawed by the coming inflation or if I put it in equity funds, get that 60% correction hit I avoided in 08-09. Where to go?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-65950249418391297222012-03-15T10:33:56.920-04:002012-03-15T10:33:56.920-04:00Shales said "The reason that markets haven’t ...Shales said "The reason that markets haven’t jumped yet is that the last great inflation and correction happened in the late 1970s and early 1980s, just long enough ago that most adults in the financial markets don’t remember it."<br /><br />This statement kinda tells me that Shales is really no genius when it comes to what inflation really is. If she thinks we haven't seen great Sean O'Donnellnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-56355996063522645062012-03-15T10:09:51.431-04:002012-03-15T10:09:51.431-04:00You can keep inflation low by keeping unemployment...You can keep inflation low by keeping unemployment high. The velocity of money will slow to a trickle meanwhile you inflate the money supply for the 1% to 'create jobs' that never get created.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-80872826402576812192012-03-15T09:24:13.422-04:002012-03-15T09:24:13.422-04:00The course of a progressing inflation is this: At ...The course of a progressing inflation is this: At the beginning the inflow of additional money makes the prices of some commodities and services rise; other prices rise later. The price rise affects the various commodities and services, as has been shown, at different dates and to a different extent. This first stage of the inflationary process may last for many years. While it lasts, the prices Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-53581896489798121702012-03-15T09:17:32.030-04:002012-03-15T09:17:32.030-04:00"The reason a little inflation is not all rig..."The reason a little inflation is not all right, and the reason inflation comes suddenly, is expectations. "<br /><br />It's a good thing the Fed is now able to roughly monitor inflation expectations via tips spread in real time now. No reason why expectations will suddenly sneak up on them. All the Bernank has to do is utter a few words about raising interest rates or IOR and theDesolation Jonesnoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-20922433540922901212012-03-15T08:16:49.656-04:002012-03-15T08:16:49.656-04:00Thanks Robert! Ha, I just read Ms. Shales Bloomber...Thanks Robert! Ha, I just read Ms. Shales Bloomberg piece on Inflation and immediately came here to check if you had read it. Of course you have and responded so succinctly, wonder how the Krugmaniacs will respond?Anonymousnoreply@blogger.com