Hyper-Inflation Has Arrived

Originally posted by crimvelvet
reply to post by burdman30ott6

 

Package sizes haven't decreased...

You just have not paid attention.

Wow, I must have crapped the bed on that post because you are the second person in the thread that has taken exactly the oposite of what I was saying away from it. I was laying out examples of how the media is trying to whitewash the current situation. The media is saying "Package sizes haven't shrunk, you're memory is wrong." Of course they've shrunk! The problem is, the machine requires us all to embrace Orwellian doublethink, where you are hammered with a lie so much that you eventually believe that "Well, maybe my memory is wrong and what I'm being told is the truth."

reply to post by mnemeth1

No i do, but like I said, these 2 items FLUCTUATE THE MOST. So you can't use food as an economic indicator.

I was just talking to my professor about this 40 minutes ago.

reply to post by VonDoomen


Maybe you can't use them as a "short-term" indicator, but I contend they are the #1 most important "long-term" indicator.

Food, Water, and Energy are at the tip-top of the necessity scale. When people can no longer afford those necessities, bad things start happening to governments!

Originally posted by VonDoomen
reply to post by mnemeth1

 

No i do, but like I said, these 2 items FLUCTUATE THE MOST. So you can't use food as an economic indicator.

I was just talking to my professor about this 40 minutes ago.

edit on 2/3/2011 by VonDoomen because: (no reason given)

Yeah, and like I said, I don't see your point.

Unless you think people don't buy food or gas, then leaving them out of the CPI is ridiculous.

reply to post by mnemeth1


i will get you in touch with my professor. She has a PHD in economics. And we went over EXACTLY what I said TODAY.

I WILL REPEAT AGAIN, THE PRICE OF FOOD AND ENERGY FLUCTUATE THE MOST OFTEN OUT OF ANY OTHER COMMODITY. ECONOMIST DONT EVEN INCLUDE IT WHEN MEASURING THE CPI, BECAUSE IT THROWS OFF THE CPI TO MUCH, WETHER GOOD OR BAD.

reply to post by VonDoomen

Howveer, when economist measure the CPI they don't include food and energy since they fluctuate a lot. so I hope people dont worry to much

If you are not worried you do not understand where jobs and therefore wealth comes from.

Congress just passed one law that will wipe out most American farmers. That is 2 million direct jobs not including support industries like Tractor Supply, Southern States, Agri Supply, John Deere....

At this time 50% of the US jobs come from small business. 80% of new businesses fail within the first few years. 90% of those that fail did not provide the level of income desired or was too much work for their effort only 10% bankrupt.

Congress also passed the Obamacare law with its nasty 1099 tax change. This will effect ALL businesses.

Your really need to read this to see how a simple two liner in a bill can create MAJOR havoc in the economy.

Some businesses like Walmart may just refuse to sell to small businesses because of the additional hassles or they may demand all payments have to be made by credit card. This increases the cost of doing business and since credit cards create money out of nothing it will further add to inflation. This increase in paperwork and financial liability will discourage new business formation and may be the final incentive to close the doors on other businesses. All it takes is a couple mistakes on filling out the form especially the TIN# and you are suddenly in a paperwork nightmare!

Worse As we found out if the SS# on ONE 1099 is invalid the IRS WILL NOT TELL YOU WHICH ONE IT IS! No lie it happened to me a couple of years ago! We were instructed by the IRS that wee would have to do back up with holding on ALL the outside contractors we hire!

...the new 1099 form could create a huge paper tsunami at the IRS. At least 38 million taxpayers will be subject to the new requirement, including 26 million who run sole proprietorships, two million farming businesses and one million charities,...

Olson also says that “the IRS has authority to impose monetary penalties against businesses that fail to file information reports,” adding that “the new volume of information reports could exacerbate under-assessment of penalties in some cases and over-assessment of penalties in others.”

Olson also said: "In our view, it is highly likely that the IRS will improperly[..]ess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort."

...And then there are other ugly side effects. Start with reporting errors. Someone sells your small business a laptop for $600. Today, you don’t have to issue a 1099 to that person because the IRS realizes not only that these transactions count in the millions, but often mistakes are made about the correct amount to report on the form.

The seller often makes mistakes deducting from that $600 his cost of goods to sell that laptop -- prorating payments to a distributor, office overhead, gas costs to go pick it up. You see how crazy this can get.

Next, the small businesses will have to collect from the laptop seller his Social Security or TIN to complete the 1099 form. What if a vendor fails to furnish a correct TIN? The small business is required by law to calculate and then impose back-up withholding at the rate of 28% of the purchase price.

It gets worse. In that event, under the law, “the small business must prepare and file Form 945, Annual Return of Withheld Federal Income Tax, and make federal tax deposits at an authorized institution on a prescribed schedule,” to comply with the 1099 law, Olson says.

If the small business doesn’t do that? It gets slapped with a penalty.

So say you paid just $200 for the $600 laptop. Say you get in a fight with your laptop seller because he won’t give you his Social Security number due to privacy concerns, or he simply gives you the wrong Social Security number. Then you’ll have to start filing federal forms to do backup withholding for $168. Wouldn’t that make you feel like you shouldn’t pay the full purchase price?

“Failure to withhold an amount generally results in liability for that amount,” TAO Olson says, who acknowledges that “back-up withholding may be impracticable, because a business already may have paid the full price at the point of sale before learning that the TIN was incorrect.”

TAO Olson also notes this TIN fight could hurt the economy, especially in this scenario. “A vendor may simply refuse to sell good to any purchaser that refuses to pay the full purchase price,” Olson says. “Such an outcome could significantly impair the normal course of commerce. No business should have to choose between compliance with back-up withholding and losing access to vendors on the one hand, and noncompliance while keeping vendor access on the other hand.”

What if your vendors are not computerized to track customer purchases, what if they are not up to speed? Wouldn’t you be inclined to drop them? Wouldn’t that in turn put other small businesses out of work?

And get this -- if a small business makes individual purchases of $600 or more from at least 250 vendors during a calendar year, it must also by law file forms 1099 electronically to the IRS. That’s even more costly, because the small business would have “to pay a per-report fee charged by an e-file service provider,” Olson says.

And what happens if you want to return the item? Aren’t there millions more returns of items at the level of $600?

“The goods market is subject to a high rate of returned items that result in refunds to the purchaser,” TAO Olson notes.

Say your small business wants to return the laptop. But you both already filed 1099 forms for the purchase. You have to file more federal forms showing the transaction was undone.

And what if someone erroneously pumps out a 1099 form that says you sold them a laptop, when you didn’t, and the IRS matches that form to find out you did not report income on your tax return?

The IRS then issues a so-called “CP 2000 “notice of underreported income. That’s basically an IRS form letter explaining to you that the 1099 income information in IRS files does not match entries on your tax return and advises you to respond. At this point, you’re stuck, you’ll “have to prove a negative,” TAO Olson says.

And that means more bureaucracy. “Consequently, the IRS would have to develop a process for verifying and using information reports to est@blish an accurate amount of gross proceeds,” Olson says....

slumz.boxden.com...

reply to post by VonDoomen

i will get you in touch with my professor. She has a PHD in economics. And we went over EXACTLY what I said TODAY.

I WILL REPEAT AGAIN, THE PRICE OF FOOD AND ENERGY FLUCTUATE THE MOST OFTEN OUT OF ANY OTHER COMMODITY. ECONOMIST DONT EVEN INCLUDE IT WHEN MEASURING THE CPI, BECAUSE IT THROWS OFF THE CPI TO MUCH, WETHER GOOD OR BAD.

Then you prof is not looking at long term trends AND there are plenty of statistical methods available to get rid of the fluctuation.

How the heck do you think they come up with statements like TOKYO, Dec. 21 (AP) - (Kyodo)—The average global temperature on land and the sea surface in 2010 climbed 0.36 C from the 1971 to 2000 average, marking the second highest since comparable data became available in 1891 or The Earth has just experienced its warmest June on record, 0.68°C warmer than the 20th-century June average.

I would expect an economics professor to be familiar with basic statistics. I would also expect an economic professor to be capable of looking at trends over a decade or a century.

Wow this thread is getting interesting.

Anyways, if anyone of you have an hour to spare, check out this video I just found.
LINKITY LINK
It's about an hour long, so....
It takes a while to get through but you get the point.
I just finished watching it and it basically confirms ALL of our thoughts.

Well, at least those who know something big is looming...

Don't mind the investment strategies at the end...pay attention to the research done.

This guy is saying what we all are screaming about in here.

Either way, no matter what the nay-sayers believe, the dollar is doomed.
The IMF wants a global currency, China is dumping the dollar and when you see through the crap...
The writing is on the wall.
They want a new currency.
The debt bubble is about to burst.

Banks versus the American Dream LEARN THE TRUTH
www.youtube.com...



The Money Masters.

video.google.com...

Remember folks ending the FED started with John F Kennedy and is being taken up by the Ron Paul Revolution.

reply to post by crimvelvet

Im not really sure why your bringing up all of this stuff.

Im just pointing out that ECONOMIST dont include food/energy in the CPI because it is so volatile. This is not some rule MY professor created for the entire world of economics. And that when people use food/energy like this, it is usually in a scare mongering way, as those would be the two best indicators to fear monger with, because they are the most volatile and therefore the most likely to present a scary picture.

reply to post by crimvelvet


Again, this is a rule used by economist, not specifically by my professor, so character attacks on her are unneccessary, considering your more than likely less educated than her on the topic!

And we're talking the economy, not weather. these two systems are regulated by vastly different forces.

reply to post by mnemeth1


Its post like this that ruin this thread.

Your openly advocating people act in a irresponsible manner which would make this situation even worse.

We got here by greed and people not being responsible.

People being greedy and irresponsible will only exascerbate the problem.

"We cannot expect to solve a problem with the same mindset that created it" - Einstein

reply to post by havok

China is dumping the dollar

That is a turn of events and will increase inflation even more as more money is put out on the market. I cannot blame them with congress just wanting to push the debt ceiling even higher. For Japan and other nations holding USD to follow suit is very likely, as the dollar falls they will want to get what ever they can instead of some worthless rubbish. The culture exhibited by mnemeth1 earlier on this thread of max out the credit and let someone else deal with it is part of this problem, the other part is a lack of valour to fix the ongoing corruption, GFC. China does not want to be played as the sucker.

reply to post by kwakakev


Bad thing is, with the largest holder of our dollars, besides the Fed Res, dumping them...
They are basically playing the checkmate.

Once other nations jump on the bandwagon, it's doom and gloom all over again.

To me, our leaders don't want us to be self-sufficient either.
The entire global scheme is killing us.

The solution, short-term as it may be, is to provide for ourselves in the immediate future.
Not think about profits on a global basis.
Not, continue on the global path of destruction.

Hmm...I'm still convinced it's all one, big, well-orchestrated plan.
Somehow it all is speeding up towards a well-hyped up date too.

reply to post by VonDoomen


I'm always exceedingly perplexed as to why anything at all that "fluctuates" cannot be used as an economic indicator.

In fact.. unless it steadily increases at a constant rate, year over year over year over year ....... it's not included.

Do you realize how incredibly, vastly, and astoundingly ignorant that is? Do you see that it makes no sense what so ever? If the price of any major expense fluctuates, it effects our buying power, ie, inflation/deflation. Why the hell isn't it considered then?

Does that make sense to you?
It's simply because it makes the numbers "look bad". Like unemployment, the Governments only actual measure of unemployment is 1. Who's collecting the state insurance and 2. what pay services like ADP report to the government. A completely unscientific measurement of unemployment. Just like how our CPI is a completely unscientific measurement of inflation. CPI is such horse!@$ it's not a measurement for anything at all, it has absolutely NO bearing on our lives, our economy, our nation.

CPI exist solely for the purpose of keeping Social Security payments low. And making ignorant Americans comfortable in their Government and economy.

reply to post by havok

To me, our leaders don't want us to be self-sufficient either.

We are part of a multinational global community all dependant on each other to some degree.

The entire global scheme is killing us. The solution, short-term as it may be, is to provide for ourselves in the immediate future. Not think about profits on a global basis. Not, continue on the global path of destruction.

Funding the war machine is killing you. It may be profitable for a few, but is disastrous to the many at home and abroad.

Hmm...I'm still convinced it's all one, big, well-orchestrated plan. Somehow it all is speeding up towards a well-hyped up date too.

International discussions have been going on for a while and no consensus has been reached yet. I do think an international currency is the best way out for all concerned, but it needs to be based on a strong foundation free of corruption if it is to work, not pushed through the back door like the Euro. Maybe the world can get there one day, maybe it can't. The future is uncertain.

reply to post by VonDoomen

Again, this is a rule used by economist, not specifically by my professor, so character attacks on her are unneccessary, considering your more than likely less educated than her on the topic!

And we're talking the economy, not weather. these two systems are regulated by vastly different forces.

First about numbers.

It does not matter where the numbers come from, statistics applies to ALL sets of numbers. I used temperature because the numbers come from all over the world and need a lot of "handling" by statistical methods to extract useable data. In comparison to temperature data, oil and food data should be no more complicated. Also the temperature data is something all people are familiar with.

I am afraid the real reason oil and especially food are not tracked is because they are so critical to our society. Remember the University Economics Departments were endowed by the bankers as part of the campaign to get the Federal Reserve Act of 1913 passed. I do not consider University Economics Departments "Unbiased" any more than I consider the news media owned by JP Morgan "Unbiased"

Another reason mnemeth1 and I are so dogged about the topic is because FOOD is THE most important economic commodity. It is the basis for life and for economists to disregard it renders their entire set of data very questionable.

reply to post by getreadyalready


Actually, the US economy typically averages about 2.5% of growth every year to sustain increased population and the new work force. Historically, no matter what we see that percent. Additionally the FED has undertaken policies that have typically pushed about 2.5% inflation, which matches our growth, so in real terms we usually don't see much change. Now, to see where things go, we can use the equation:

Todays Price = Yesterdays Price * (1 + inflation)^(number of years between today and yesterday)

So, using this equation we can see that a $35000 house in 1950, after 60 years will be worth about $153000 today. You are right about the cheaper materials with 1 caveat. The cheaper materials of today, given the technological changes, are still better than the best materials then. Bricks are the same I would say, but insulation, electrical, plumbing, etc, are far better.

Minimum wage is also a neat change. If minimum wage was $1.00 then, which I have not verified, then today it would be $4.40 per hour, which is only half what it actually is.

Now, for the things that have gone up more than others, well, thats how exponential growth works.

Just to top this off, the definition of "Hyperinflation" is actually a little elusive and varies from 26% per year for 3 years sustained, to 50% per month(really bad). Either way, its not 2.5% every year for 60 years, thats normal economic change.

Thats not to say we won't see hyperinflation with the current FED policy. I like this website, he explains it very well: www.modernsense.net...

reply to post by kwakakev

International discussions have been going on for a while and no consensus has been reached yet. I do think an international currency is the best way out for all concerned, but it needs to be based on a strong foundation free of corruption if it is to work, not pushed through the back door like the Euro. Maybe the world can get there one day, maybe it can't. The future is uncertain.

First if you want to get rid of war, get rid of fractional reserve banking and central bankers. That gets rid of the fiat currency used to fund wars. No money lent to governments means no wars. SIMPLE

Actually we HAVE an international currency. It is the one the banks use among themselves. It is called gold. The US Dollar is just the fiat currency they use to fleece the ignorant masses by creating a debt instrument out of thin air and then telling us we now have to pay that debt back to THEM.

I sure would like to be given the legal right to write out a $6 trillion dollar IOU and then tell an entire nation they must labor to pay me the money despite the fact I gave them nothing of value.

The Germans have demanded that gold bullion held in US custodial accounts be returned to their owners, with physical gold shipped back to Germany. The Dubai bankers have demanded that gold bullion held in London custodial accounts be returned to their owners, with physical gold shipped back to the w:st="on"United Arab Emirates. They are following the hired German counsel. In all likelihood, neither US nor London sources are in possession of all the gold held in those custodial accounts, since at least some of it probably was improperly leased. By that is meant without owner permission or knowledge. So an uproar could come soon with charges of gold bullion theft, or at least failure of fiduciary responsibility. Theft is a simpler description. news.goldseek.com...

Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday. www.marketwatch.com...

To me the problem centers on greed vs sharing. The system is set up to encourage greed as the highest value and moral standard. Talk about lipstick on a pig!

This is a global war on labor or the "middle class" if you like. The middle class is a relatively recent phenomena in human history and something the elite fear. Greed is masked by words like ambition and competition. But the game is rigged and we are indoctrinated from an early age by sophisticated propaganda which blinds us to the game.

Now the promoters of "Social Darwinism" try to convince the masses that they too are a budding oligarchs if they can only get their head on straight and step on the other man to get ahead. All's fair in love and war...etc.

You need onlynurture a contempt for workers to succeed. Everywhere this attitude is reinforced in our society.
Granted there are some that actually believe that claptrap. But most those are middle and upper management enforcers, hired muscle that that know if they won't do it somebody else will.

We are told repeatedly that we shouldn't blame an American manufacturer for shipping our jobs overseas for cheap labor, after all he is only doing what the market demands. We shouldn't feel bad about our troops overseas they are protecting our "vital interests". Whose vital interests?

Why isn't it shameful for one man, a health insurance executive, to make close to a billion dollars in a couple of years? What kind of "work" was he doing that required that type of compensation?

In fact, why aren't the CEO jobs outsourced? I could get a foreign worker to do that job for 20 grand a year! Why do so many need to be so poor for the very few to be so successful? Sharing, helping, caring, peace.