Inflation not rising fast enough

[uprooted_kentuckian]

Originally Posted by darwinslair

<smile> Jim Rogers says that Bernanke knows nothing about economics, just knows how to print money.

http://www.bloomberg.com/news/2010-1...ls-oxford.html

I am inclined to agree.

Tom

What else would he say Tom, he is more or less from the austrian school of thought, much like you are. Economics is an interesting subject, but there are no hard and fast rules or equations that work perfectly. There are simply too many variables. At this point we have to avoid deflation. Our system is tied to directly to credit markets and they can't take the strain of deflation. I still believe they are trying to force some inflation to avoid deflation.

[darwinslair]

nice chart and article showing pricing inflation by a bunch of different indicators the last 10 years

http://www.dailyfinance.com/story/st...2001/19713059/

[uprooted_kentuckian]

I wonder how China devaluing its currency affects everything. Hmm, for that matter, I thought they were doing a great economic job, why would they even be doing that?

[darwinslair]

It has risen to its highest point since 1993 relative to the US$.

But in pegging it's value to the US$ previous, it made their wal-mart exports cheaper. Now that they have moved their exports to the US, which 3 years ago were in excess of 50% of their production, to less than 18% at the end of 2009, they can really let it rise with fair impunity. Downside to that for them is that it will reduce the value of their non-TIPS and what longer-term US debt they hold.

For the TIPS, it doesnt matter, for the short term debt holdings, it is really an axe over our necks, as we have to keep rolling it over.

Or we can just print the money to pay off the short term debt, shrug when SS recipients and retiree bondholders are back to eating dog food again, and figure that is just the price we pay for the last 40 years of excess.

Tom

[FAADAN]

Secret Walmart Survey Shows Inflation Already Here

There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.

http://www.cnbc.com/id/40135092

[darwinslair]

I think all those idiots are so detached from the real world they cannot see past their own ideology.

Or they are evil beyond our own levels of comprehension.

Tom

[FAADAN]

Originally Posted by darwinslair

I think all those idiots are so detached from the real world they cannot see past their own ideology.

Or they are evil beyond our own levels of comprehension.

Tom

I met a lot of government executives who were not too bright but they were so full of themselves they didn't know just how dumb they were.

[uprooted_kentuckian]

Tom, given that we fully understand everything that is going on with both our economy and the myriad variables at play globally, what moves would you make to stabilize our economy?

[darwinslair]

Well, I have a lot of ideas. <smile>

I think I would eliminate monetization of government debt.

I would not allow the government to borrow money outside of our borders to finance anything except repelling a physical invasion of our own country.

Eliminate most government programs and all attendant bureaucracies to them, including entitlement programs (which would have to be phased out over a period of time)

Force the government to protect domestic production through tariffs on imports (bring them up to domestic price levels) so that domestic companies are competing on quality instead of just costs. (people still bought Toyotas, so foreign companies can compete on quality) This also provides income to the government which long-term alleviates the general tax burden.

I would eliminate production subsidies. It creates really odd imbalances in what is produced, in everything from gasoline to industrial agriculture.

I would make corruption of an elected official a capitol offense for both the corrupter and the corruptee.

I would eliminate corporate taxes and corporate personhood. They are not people, and taxing them simply adds to the end prices of goods, plus we tax the owners on their shares and dividends, so they are taxed twice on the same thing. Makes no sense.

I have to go take care of kids. I could write a book like Zac can on things that would (I believe) help long term, though there would definitely be short term pain.

Tom