CNN Agrees With Austrians - Inflation Is Here

CNN says inflation is already here.

I couldn’t agree more.

The neo-liberal Keynesian's tell us that inflation during an economic depression is nigh impossible. They say that since people aren't earning any money, prices will not go up. Obviously what CNN is reporting must not really be happening.

One of two things is true:

Either Keynesian economists like Paul Krudman are wrong or CNN is lying to us.

Of course, this inflation has been well predicted by Austrian economists. But lets not talk about that. People might actually do some research and find out that the big government statist tyrants like Krudman and company have an agenda to push.

CNN Money reports:

How do we measure the level and duration of inflation, to know whether it will help or hurt? In basic terms, inflation is a rise in prices of basic goods and services over a given period of time. In the United States, the government generally tracks inflation using the Consumer Price Index, or CPI.

Besides measuring inflation, CPI is also used to set income rates for more than 80 million people on entitlement programs. 48 million people on social security, 22 million food stamp recipients, and 4 million civil service retirees, have benefits tied to the CPI.

When inflation increases, so do their benefits. These payments are among the largest non-defense obligations in the federal budget. Not surprisingly, then, the government tends to understate inflation and has changed the way the CPI is calculated nine times since 1996.

That’s right folks – they are a bunch of lying criminal thieves.

Another common inflation metric is the Federal Reserve’s core inflation, which it uses to measure overall inflation. The Fed excludes food and energy prices to smooth out short-term volatility. However, based on government data, food and energy purchases make up 36% of the average consumer’s budget. The Fed’s inflation graph might look nice and smooth, but it’s probably not the best indicator for how your wallet feels when paying bills or buying groceries.

The article the goes on to detail the reactionary measures already being taken by bond traders. Government is not able to move its bonds at low rates. It has to give the bonds higher interest rates because investors are scared of a default.

Finally, in the chart at the top of this page, we’ve plotted the Journal of Commerce Industrial Price Index over the last year. This index charts the price of key commodities that are used in industrial production. The chart is up and to the right, screaming inflation. Commodity inflation will likely lead China to report its first trade deficit in March in 6 years!

As they say, the markets don’t lie, people do (or government statistics as the case may be). Based on the evidence above, we’re sticking with our inflation call — until the markets, and the data, tell us different.

The tyrannical autocrats you call the government are busy blowing up the dollar and moving as much money as possible into the coffers of the rich elitists on Wall Street before they blow the whole thing out.

Get your money out of the markets now and start taking physical delivery of precious metals, because that’s all that’s going to be left after paper becomes worth less than the trees its made out of.

The Mises Institute slams Keynesian nonsense in this epic piece

mises.org...

Every state needs justification. And the justifiers are always welcomed and cheered by the state. So we should not be shocked that a false science — a science that props up the state — is embraced by the state and associated sycophants.

But we must always remember that in the end, the nonsense is revealed for all to see, with the proponent receiving his due discredit. But how long do we have to wait? And what will be the final result? Only time will tell.

reply to post by mnemeth1


Really it goes back to "Inflation or Deflation" .. In order to have actual "infaltion" in our form of economy, it must originate at the consumer level. You can have the inflation of prices, goods, services, commodities and so forth without having "actual inflation" ..

Deflation is the contraction of the monetary supply, as well as the devaluing of the currency .. this leads to a rise in commodities, prices, goods and services while contracting the base monetary supply (usually due to unemployment) .. Not all recession are Deflation, some are Inflation which can cause likewise effects.. However, Deflation is actually a pretty rare scenario, and I believe that there is confusion (even among "economic" pundits on the news) because we rarely ever see deflation on such a massive scale.

For instance.. the 1970's, 80's, 90's and early 00's were all inflation recessions, the worst being the 00's recession. The monetary base never collapsed because in each recession the population fell back onto their credit, which we can see expands in a snowball effect from the 80's onward.. in 00's it was the housing bubble, the 90's the .com bubble etc..

In this recession credit has contracted, and has (regardless of what the news says) not yet expanded at a rate higher than the contracting.. for all our efforts to inflate the monetary base, if it doesn't circulate, it doesn't assist the economy.. the bottom line is, if the money doesn't make it to the consumers (think the lovely 90's especially) then there CANNOT be inflation. There can be inflation of CPI, GDP, etc etc.. but never economic inflation.

So, in my opinion, we are still seeing Deflation. Not inflation.

EDIT: To get an idea as to how rare a major economic recession with credit deflation is, the last time it occurred was in 1929.

[edit on 3/31/2010 by Rockpuck]

reply to post by Rockpuck


You are entitled to your opinion.

However the facts speak otherwise:

I do agree with CNN and almost every buyer on this planet. Inflation is in. And it is a GOOD THING.

Inflation means too much money chasing after limited goods. Unless you had been sleeping or in hibernation for the past 1 year, you would not have failed to see the huge and obscene amounts of money the govts around the world had pump liquidity into market to get their economies running again.

When the financial crisis struck, many manufacturing and purchasing ceased or close to ceasing. But when the Keynesian solution was offered up, factories are seeing their productions ORDERS raise.

As per market law of supply and demand dictates, there is a sudden surge of orders for goods, with many who needs such goods are willing to pay more, ultimately resulting in the rise of good’s price, which is inflation.

Simply explained so that more may comprehend.

Keynesian pump govt money solution = factories start manufacturing again = jobs recreated = inflation rise = better profits or pay to workers = money circulates = out of Financial Depression.

As long as the inflation is kept within moderate range through monetary control such as interest rate hikes, it will ensure money circulates and everyone who had been touched by such monies will benefit.



The opposite of inflation means DEFLATION, and that’s a horror! It means too much goods lying around with nobody spending or buying, thus the manufacturers will have to sell below cost just to get out of the market.

The consumer benefits temporarily, but when manufacturers get out of markets, lose money or become bankrupts; it would mean no more production and no more jobs.



Utimately, Keynesian policies are not meant to last forever. Once the market recovers, such as by signs of inflation, it will have to stop. Govts will have to reduce its spending and let the new confidence of the private enterprise market get itself up up and away.

Between 90 – 95% of the world population are fully employed. Only that few that is unemployed will make the most noise and have the least confidence. Misery loves company.

It is the majority who kept the economy running. Look around you outside, do you see traffic come to a halt? Do you see people stopped buying goods? Are there no delivery trucks on the road? Had aircrafts stopped flying? Had container ships stopped sailing, every one of them?

No, commerce had continued. Thanks to Keynesian policies. But we must never forget the unemployed, and do what we can to lift them up as well so that no human gets left behind.

It’s always good policy to work together, proven successful many times in the course of human history, than to work against one another.

Cheers!

reply to post by SeekerofTruth101


Yeah, inflation is great.

Just ask Zimbabwe, Argentina, the Weimar Republic, etc.. etc.. etc..

Since you didn't read what I wrote, I'll say it again, only this time using the words of the retarded Paul Krudman

www.nytimes.com...

But does the big inflation scare make any sense? Basically, no
...
Deflation, not inflation, is the clear and present danger.

Good old Paul says inflation isn't going to happen. Of course, he's wrong as usual. Just as he's been wrong 100% of the time previously.

The Keynesian's say inflation is basically an impossibility in a depressed market. Clearly this is not the case.





[edit on 1-4-2010 by mnemeth1]

reply to post by mnemeth1


You are talking about hyperinflation. Are we any where near it? Certainly not now, so long as monetary and fiscal controls are in place. Have a little faith in the financial systems, more so as we had all woken up to what went wrong with the economic system, and are enacting regulations to prevent such occurence.

Zimbabwe deserves what it got, for they printed money out of nothing, and backed by nothing, but corrupted themselves over nothing of true value. They have to pay the price for being financially irresponsible, as they have nothing and overvalued their critical resources.

Now compare it to the West, middle east and asia, what kinda backing do they have? - tangible Assets as well as human capital with great cerebral potential - educated white, black, red, yellow or brown.

So lets deny ignorance....and baseless misery

Originally posted by SeekerofTruth101
reply to post by mnemeth1

 

You are talking about hyperinflation. Are we any where near it? Certainly not now, so long as monetary and fiscal controls are in place. Have a little faith in the financial systems, more so as we had all woken up to what went wrong with the economic system, and are enacting regulations to prevent such occurence.

Zimbabwe deserves what it got, for they printed money out of nothing, and backed by nothing, but corrupted themselves over nothing of true value. They have to pay the price for being financially irresponsible, as they have nothing and overvalued their critical resources.

Now compare it to the West, middle east and asia, what kinda backing do they have? - tangible Assets as well as human capital with great cerebral potential - educated white, black, red, yellow or brown.

So lets deny ignorance....and baseless misery

So you don't think we are printing money out of nothing?

Baseless misery? - we are at 20% unemployment rates. That's not baseless misery. That's misery heaped upon us by the criminal Keynesian banking class.

Krudman said we were going to experience deflation because of the high unemployment - he was honestly worried about falling prices.

Falling prices are what's supposed to happen in a free market during a depression. We aren't seeing that though because the Fed is f#cking it all up and destroying the value of the peoples money by printing up epic gob piles of it and handing it all to the criminal bankers that caused the disaster in the first place!

This is criminal treason!





[edit on 1-4-2010 by mnemeth1]

reply to post by mnemeth1


.....right... CPI can in fact rise during a deflating period. While the monetary supply has contracted at the consumer level, the monetary policy of the government was to counter the broader effects by inundating the economy with easy money, however the money never made it to the consumer but to the corporation "trickle down economics" failed miserably. However, it resulted in measurements like CPI to rise, while sales fell. This is a phenomenon seen only in this recession.

Why am I even bothering to explain, it's apparently lost on you.

reply to post by mnemeth1


Zimbabwe (and Argentina, and Germany, and every other case of hyper inflation)

...All printed money at higher denominations to feed into the consumers pockets.. if you go to Zombabwe today, you will see people carrying 1 billion denomination notes.

As much as I hate Keynesians I agree .. Deflation is ALWAYS the worst possible economic outcome, and is the greatest danger due to a Depression, and is always the tipping point from Recession to Depression. Yes, it's due to unemployment and contracting credit. Yes measures like CPI can rise, even while the consumers monetary supply contracts.

reply to post by Rockpuck


Deflation is the best possible economic outcome.

That means the money is gaining in value.

This is a superior state of affairs for savers and absolutely necessary for a proper market correction.

If prices do not fall, it means money is being pumped in and that money is being directed by government sources.

Since this is tantamount to central planning, it will lead to an even greater misallocation of resources resulting in an even more severe depression and a longer period of unemployment.

Central planning does not work

Central planning has never worked.

Central planning is what caused this mess in the first place when the Fed decided it knew what interest rates should be better than the market.

The Fed has repeatedly failed in its mission to keep inflation low and employment high.

This is the 3rd major depression since the inception of the Fed in 1913. Not only is this a depression, its an inflationary depression. Unemployment remains unchanged, inflation is rising, and debt levels are exploding.







[edit on 1-4-2010 by mnemeth1]

reply to post by mnemeth1

Deflation is the best possible economic outcome.

That means the money is gaining in value.

Go take an economics 101 course mate.

This is the 3rd major depression since the inception of the Fed in 1913. Not only is this a depression, its an inflationary depression

By the way, it's a Deflationary Recession .. the second since 1929 ..... You could add a history course with your economics course.

[edit on 4/1/2010 by Rockpuck]

Originally posted by Rockpuck
reply to post by mnemeth1

 

Deflation is the best possible economic outcome.

That means the money is gaining in value.

Go take an economics 101 course mate.

I have.

In fact I've studied this quite extensively.

But if you want something substantial from an accredited source here you go:

DEFLATION: WHEN AUSTRIANS BECOME INTERVENTIONISTS
THE QUARTERLY JOURNAL OF AUSTRIAN ECONOMICS VOL. 6, NO. 4 (WINTER 2003)
mises.org...

The Rothbard interpretation is the correct interpretation. It is laid out first in the article.

more:

Tom Woods: Why You’ve Never Heard of the Great Depression of 1920
www.youtube.com...

Tom Woods: Smashing Myths and Restoring Sound Money
fascistsoup.com...

[edit on 1-4-2010 by mnemeth1]

Originally posted by Rockpuck

By the way, it's a Deflationary Recession .. the second since 1929 ..... You could add a history course with your economics course.

[edit on 4/1/2010 by Rockpuck]

No, its an inflationary depression, hence why prices are rising - unless of course you want to ignore reality and claim all the data I just posted is a work of fiction.

And third, let us not forget about the 1970s.

Real unemployment has remained above 10% for well over a year, that's a depression. I don't give a crap about GDP numbers since the inflation behind them is out of control. Adjusted GDP by the bogus CPI put out by government is a whitewash.


[edit on 1-4-2010 by mnemeth1]