Hyper-Inflation Has Arrived

reply to post by burdman30ott6


[facepalm]
Ohhhhhh...


I figured you had a hidden meaning and did not catch your immediate point.
Good call.
The media has 1000's of topics to distract the masses with everyday.
I'm sure inflation is no big deal.


Just as GetReadyAlready stated, it's actually quite alarming how much inflation has already taken place.
The price of a 3 bedroom brick home in 1950 = $28-35,000 (est.)
The price of the same home today = $150-190,000 (est.)
The quality of the materials, in my humble opinion, are worse now than before.
And you are stuck paying for sub-par materials today with higher prices.
Same goes for commodities, utilities and elsewhere.
As I stated before, it's a lose/lose situation for us consumers.

SO I guess it's not that hyperinflation has started, it's that IT has been here for a while.
At least the inflation part.
We just roll over ourselves in debt and act like everything is normal.
Pathetic.

reply to post by havok


I couldn't find a table for US houses, but it's much similar to the UK.. UK table:

www.communities.gov.uk...

Average home sale in the UK in the 1930's -- 590 pounds

using this tool: www.measuringworth.com...

£27,700.00 using the retail price index

£113,000.00 using average earnings

That's 590 British Pounds from 1930 converted to 2011. To better understand the conversion, the 27k figure is the "Purchasing Power" relative.

The 113k figure is the estimated commodity worth .. so oil in 1930 = x would = y in 2011. So I include both, depending on how people want to read it.

In 1971 the average house sold for 5,632 Pounds

£35,200.00 using the retail price index
£55,300.00 using average earnings

A House in 1971 was more affordable than in 1930, even though the price increased, because it's a smaller portion of the income.

This is what's missing in the US.. our wages are not increasing with inflation, our homes are becoming less affordable. even when their prices were doubling, we couldn't actually afford it. It was to great compared to our average earnings.

In 1990 A house was worth 59,785

£101,000.00 using the retail price index
£127,000.00 using average earnings

Still very affordable.

The year 2000 = 101,550

£127,000.00 using the retail price index
£138,000.00 using average earnings

Even though the price nearly doubles, the relative value is not far increased.

2008 the average home cost 227,765 .. and that's where they peaked.

www.communities.gov.uk... ables/

Pricing is only relative to income, like Gold a house can be a hedge for inflation, or it can be an investment, depending on the markets. For most of our history our wages and demand soared enough along side housing that it wasn't to unaffordable. Now however, prices are way out of proportion to incomes and the number of jobs available. It will likely catch up in a few years, it's just a matter of how the market is supposed to adjust it's self with so much government intervention. With our country now purposefully !@%! with the Dollars value, in effect increasing their taxation on us, we could spiral out of control and the economy will deflate .. because we are a service based society, our economy depends on the purchasing power of our people. I seriously doubt the Government and the Reserve has what it takes to walk the fine line with the inflation game. Already I suspect they are loosing control, and inflation will spiral out of control.

Seriously, another Zimbabwe reference?

There is seriously no data pointing to legitimate inflation happening currently. Commoditiy prices? That is more like speculators piling on. Half will get crushed after the other half bail soon enough.

Gold, no. Gold is a terrible hedge for inflation. What else? Wheat?.. Think about how much money got destroyed during 2008 and early 2009.

We are witnessing massive de-leveraging by lower level consumers and entities with far too much leverage to begin with.

When the markets break the 2007 highs (Nasdaq will shortly EDIT: Nasdaq has, meant SP500) then we will have a round of wage inflation to keep up with the increase in real inflation.

But currently, there is no inflation. Let's get real. How many threads will have to be created about the market dumping, Wiemar Germany....Doesn't it ever get old being wrong?

We will never have hyper inflation in this country with our bond markets fully functioning (and they will) because if it all turns to **** we are the best looking dog on the block.

reply to post by Dance4Life


I agree this is absolutely nothing like Zimbabwe, though, there is inflation due to the depreciation of the Dollar. That's a fact. It's what they purposefully aimed to do .. it's the Fed's very own policy?

reply to post by Rockpuck


Dollar devaluation? Not really my friend. The USDX has been in the same trading range for almost 3 years I think.. maybe more.

Now is USD JPY - CHF - CAD - AUD strong? Most definitely, but not outstandingly. Currencies are a ****** and subject to volatility. Put nicely that is.

Take a look at any of these sans JPY, less than 2 years ago almost at the same levels and about 1 year ago the dollar was 50% stronger. Personally not a real fan of using currencies as indicators of anything but* speculation.

reply to post by Rockpuck


To add, how do you gauge inflation then? I think you are actually most correct using a median home price. If you coupled this with a function that allows for the median family wage this is probably your best bet honestly.

CPI is also something. Although many aren't buying it anymore, it really only matters if it is the "default" unit of participation if you know what I mean.

reply to post by Dance4Life


You can't use home prices as a single gauge for inflation.. you can couple it with other aspects of the economy, but it's a non-liquid form of wealth. And most wealth that is put into a home stays their. Though of course it is also an indirect way of printing money, but imo the best way because it literally puts wealth into the hands of the people.

For Consumers Inflation should (note should) be measured by necessity pricing. The vast majority of wealth Americans produce is spent on living expenses, but living expenses are not measured in inflation (CPI) .. Real Inflation measures oil, foods, energy, housing (mortgage and rents) and health care.

Oil, foods and energy are not included in Inflation reports because it's "volatile" and not subject to economic performance. Even though their prices effects the economy.

Housing is not included because it's not "standard", and varies from economic zones, the real reason is that it averages 10%+ increases per year

Health Care isn't included (including insurance premiums) because it's a 25%+ gain every years..

In reality, the price of a computer, TV, car etc is bull!%@! compared to how much it will cost for me to put a roof over my head, a meal on my plate, clothes on my family and how much my doctor will rape me for the next time I go to the ER for malnutrition.

If you combine everything our inflation rate IS VOLATILE .. but that's a perfect indicator for the economy. Right now we are facing rather severe inflation (mostly due to the fact our wages are not growing). The past 2 years we saw deflation, which was good for our wallets.. bad for our jobs. 2003-2008 we saw severe inflation. 2007 being by far the worst year since the 1970's economic crisis.

reply to post by Rockpuck


Wealth inflation is coming. Soon enough for the lower 65% of earners at least, as for the top it is already taking place. If you were wealthy before 2008 - held on to your stock positions in addition to dollar cost averaging and assuming you kept your job you are flying high right now.

That isn't true for the greatest majority I suppose. Jobs will pick up, but they obviously lag equity markets. Get ready for one of the biggest expansions in history.

Take a look at a chart of historical Fed Funds Rate in relation to equity prices. That is the biggest leading indicator of expansion in history. I am not an apologist for big banking or the Federal Reserve, but I believe in a few years people will be lauding over the way the heli-ben handled this situation. Of course you will always have the opposite viewpoint of the person who shorted at SPX 666, no matter how braindead that move was in retrospect.

reply to post by mnemeth1


Im sorry, but wouldnt running up credit card debt and faulting on that make our situation even worse?

reply to post by Dance4Life


No, that's impossible. You CANNOT see wage inflation with millions out of work. You only see wage inflation when eother there is dire Monetary inflation (ie, zimbabwe) or competition for educated workers.

Why would a firm suddenly start paying more if they can still replace you tomorrow, and you're petrified of loosing your job? You'll work for scraps of moldy bread and be damned pleased about it too. No .. employers will not increase wages until we create 4+ million jobs.

A fun fact just for $!*ts and giggles: America produces over 2 million college graduates every year.

If we've had negative job growth for 3 going on 4 years.. we have a massive backlog of young, educated,, and desperate grads living in moms basement willing to work for half of what middle aged workers are making.

No friend.. wage inflation is only a dream.. they've effectively slaughtered and gutted the soul of the middle class.

reply to post by Dance4Life


Yeah.

There's no inflation.

And Santa Claus lives at the north pole with a pile of elves.

Originally posted by VonDoomen
reply to post by mnemeth1

 

Im sorry, but wouldnt running up credit card debt and faulting on that make our situation even worse?

Those who get the new money first get the most benefit.

You should use "new money" (credit) to buy up stores to prepare for the run away inflation in consumer goods, food, and energy that is about to occur.

Yes, it would make our situation worse - but screw the other guy.

It is every man for himself at this point.

I've been hearing "hyper inflation" is here for 3 years now...forgive me...but I don't believe anyone anymore.


And in some sick way...some of you guys sound excited about this. The only thing I can assume is that you guys are already in hard times and you are happy that you "may" soon have a lot of company. Misery loves company right?


I find it kind of disturbing the amount of happy anticipation I am hearing in this thread.

reply to post by mnemeth1


Wow, great reply.

I'll be on the look out for your upcoming weekly thread about the imminent market crash. We on about 2-3 week cycles of picking market tops and calling for hyper inflation? Throw in a bunk physics thread or two in between just to change things up.

reply to post by Dance4Life


The United States debt is so high the only answer to it is hyperinflation on the dollar to pay down this debt. With 14.1 trillion dollars posted in debt and 100+ trillion in unfunded liabilities what other answers would there be to correct this?

Medicare, social security and interest on the debt alone accounts for more than 70% of the budget. You will have to cut into Medicare and social security to balance the debt but that’s political suicide for whoever brings that on the floor of the house. god forbid people get there “entitlements taken away”

Its not going to happen, the only answer I see is hyperinflation. Do you have any other solutions to the problem?

reply to post by mnemeth1


"It is every man for himself at this point. "

actually, thats how society has been, and that is the underlying emotion that is really responsible for this.
"the only person who is important and matters is me"

ya well lets see 1 person pilot a spaceship to a new planet to start a new civilization. It wont work. We all need to work together. IMO

reply to post by AlreadyGone

the Hobby Farm is now a Full Time Farm...lol....

BEWARE the Food Safety Farce! It was passed during the lame duck session and will have major repercussions on farming and the WORLD food supply.

If you think these price rises are bad just wait for the backlash of US farmers against the new food law coupled with the major change in weather patterns!
As one angry farmer put it:

Let them EAT GRASS!

BACKGROUND
We see what will happen to US farmers by looking at Europe.

“In a sweeping move that has garnered surprisingly little attention this week the United States and the European Union have signed up to a new transatlantic economic partnership that will see regulatory standards “harmonized” and will lay the basis for a merging of the US and EU into one single market, a huge step on the path to a new globalized world order.” The BBC reported (news.bbc.co.uk...) from the Summit in Washington on Monday: stopspp.com...

International Harmonization - FDA.gov

The harmonization of laws, regulations and standards between and among trading partners requires intense, complex, time-consuming negotiations by CFSAN officials. Harmonization must simultaneously facilitate international trade and promote mutual understanding, while protecting national interests and establish a basis to resolve food issues on sound scientific evidence in an objective atmosphere. Failure to reach a consistent, harmonized set of laws, regulations and standards within the free trade agreements and the World Trade Organization Agreements can result in considerable economic repercussions.

2001 ~ Polish entry into the European Union: EU Chair states intent to remove 1 million Poles from their land and the Rep from Portugal stated 60% of Portugal's farmers had been removed. www.i-sis.org.uk...

2002 ~ Effect of policies on farmers in Mexico: According to a study by Jose Romero and Alicia Puyana carried out for the federal government of Mexico, between 1992 and 2002, the number of agricultural households fell an astounding 75% - from 2.3 million to 575, 000 www.globalexchange.org...

2002 ~In India, the farmers suicide at the rate of one suicide every 30 minutes, up from one suicide every 32 minutes between 1997 and 2005. (WTO Agreement on Ag was ratified in 1995) www.stwr.org...

January 8 2008 ~In the UK Defra has dropped the word 'farming' from its title. "Defra and the Treasury's joint vision document of 2006 presented to the EU argued that supports for farming should be completely abandoned.." www.warmwell.com...

You can look at these monstrous international regulations: "Guide to good farming practices" at OIE for animals and [url=http://www.fao.org/prods/gap/links/links_en.htm“good agricultural practices”[/url] at FAO for crops.

A review of some of the legal cases currently being handled by the Farm-to-Consumer Legal Defense and articles on the global food supply: www.farmtoconsumer.org...

Let them EAT GRASS!
www.newswithviews.com...
hartkeisonline.com...
hartkeisonline.com...

Its not going to happen, the only answer I see is hyperinflation. Do you have any other solutions to the problem?

Start burning money. Money balances the forces of supply and demand. When there is more money in the system, prices go up, when there is less money in the system prices go down.

From reports I have seen, 50% of the US budget goes to the war machine. There are budgets and there are budgets with lots of fudge its in between. It is the imbalance between the rich and poor with the attack on the middle class that has been a big problem leading to centralised control on many fronts. It is not looking good for the population.

Well, that's still far away from Germany's 1.000.000.000.000% hyperinflation between january 1919 and november 1923. And Germany is still one of the strongest economies in the world.

That's just part of the game. Here in Brazil, we have had and average of 300% annual hyperinflation in the whole 80s decade and an average of 764% annual hyperinflation between 1990 and 1994.

I remember we used to have a shop back then in the 90s and we decided not to sell anything, because it was best to keep the goods in stock than trade it for a piece of paper that was losing value by the minute. On the other hands, my goods didn't loose value at all.

Maybe it's time for you guys in the US to consider stocking some food. Specially the kind of food with long shelf life.

reply to post by havok

The price of a 3 bedroom brick home in 1950 = $28-35,000 (est.)

ERRRrrr actually the price of my parents' 3 bedroom home in Colonial Heights (near NYC) was $3,000 in 1943.

A three bedroom ranch was $12,000 to $14,000 in Westchester county NY in 1965 (Mom was a Real Estate Broker and we bought a house in 1965) In 1985 my cousin sold a house on Long Island for $300,000.

In 1959 the money supply was $50.525 billion. In August 2008 the money supply was $848.263 billion and it skyrocketed to $2016.264 billion by the end of 2010. This is the H.3 Aggregate Reserves of Depository Institutions and the Monetary Base