RT FAN Posted March 27, 2014 Share Posted March 27, 2014 There won't be inflation until the velocity variable in Friedman's equation gets larger. There is inflation right now caused by the dramatic increase in the money supply, a result of the FED's nonstop money printing. You can see it in the miniscule yields offered in bond market as excess funds drive up bond prices and crush yields. Look at the fantastic price levels in art auctions, fine jewels, super yachts, high end luxury homes. All of these are indicators of the veritable ocean of dollars & other first world currencies washing over the planet. As to us mere mortals, you are correct in that both Consumer Price Index & the Producer Price Index have been remarkably well behaved for the last few years. However those numbers are dubious at best when they are prepared by the government, whose payments for social security, federal pensions and a plethora of other programs are tied to the CPI rate. Commodity prices, grain, gasoline & foodstuffs have all risen substantially over the last decade. Just look at what is left in your wallet after you leave the supermarket. I agree that the FED under The Bernank was mostly worried about a deflationary scenario, with good reason, but the policies followed by the FED has unduly hurt the middle class of this country by punishing savers and forcing money to seek the higher yields offerd in the stock market. For the last 5 years it has been the only game in town. Quote Link to comment Share on other sites More sharing options...
oldtimer Posted March 27, 2014 Share Posted March 27, 2014 Inflation is a monetary phenomenon. You are right about the massive amounts of money pumped into the system. However, a rise in prices is not necessarily inflation. Food prices can go up due to drought conditions, or to put it another way supply decreases while demand does not. A rise in wealthy peoples fancies such as yachts, art, and housing does not define general inflation. Demanding high rates of interest from bonds and other loans is a sign of inflation because of the expectation of the paid back money being worth much less. Natural gas prices have gone way down due to excess supply. Savers are lenders. Very low rates have definitely hurt them. But I reiterate, look at Friedman's inflation theory and its equation and figure out why we aren't looking at runaway real estate and precious metals prices. And interest rates. It's found in the velocity number. If people don't make more money they have no more to spend so a rise in an essential good simply forces a cut back in spending on something else. I'm not defending any particular policy nor proffering any particular solution, but I am saying that when inflation comes---you'll know it! Quote Link to comment Share on other sites More sharing options...
oldtimer Posted March 27, 2014 Share Posted March 27, 2014 It's meaningful. It will mean a lot when it comes. Complete financial behavioral changes occur. Remember the seventies? Remember what it took to stop it? Quote Link to comment Share on other sites More sharing options...
wheelman Posted March 27, 2014 Share Posted March 27, 2014 So during high inflation hard goods won't go up, because no one can afford it? Quote Link to comment Share on other sites More sharing options...
oldtimer Posted March 27, 2014 Share Posted March 27, 2014 No. Read again. Quote Link to comment Share on other sites More sharing options...
Taz Posted March 27, 2014 Share Posted March 27, 2014 Buy old tube stereo gear and wait for the price to go up. Of course you'll have to play it to make sure it keeps working properly when you downsize your living accommodations you can sell what has gone up the most in value. Happy investing! John 1 Quote Link to comment Share on other sites More sharing options...
Coytee Posted March 27, 2014 Share Posted March 27, 2014 Nice thing about hoarding vintage stuff.... if / when you sell it, no 1099 is created. 1 Quote Link to comment Share on other sites More sharing options...
T2K Posted March 28, 2014 Share Posted March 28, 2014 I had a lot of that old vacuum tube electronics and old record players and records and stuff but after answering a couple of those thousands of online ads from people wanting to buy old useless valueless gear like I had I just carried it all to the scrap yard. I mean both those guys wanting to buy said it wasn't worth anything so I know they just wanted it for scrap. I got $46 for all 1400 pounds of it. K. Quote Link to comment Share on other sites More sharing options...
mustang guy Posted March 28, 2014 Share Posted March 28, 2014 Buy old tube stereo gear and wait for the price to go up. Of course you'll have to play it to make sure it keeps working properly when you downsize your living accommodations you can sell what has gone up the most in value. Happy investing! John Look at what happened to the Marantz 8B. It has doubled in the past couple years. I personally collect The Fisher tube gear. Quote Link to comment Share on other sites More sharing options...
JJkizak Posted March 28, 2014 Share Posted March 28, 2014 If you like dividends then jump into the stock market and purchase a trust called "WHZ" which pays 22.4% per year. And if your curious look up "Whiting USA Trust II" dividend history on Google. It is currently $13.04 per share.JJK Quote Link to comment Share on other sites More sharing options...
RT FAN Posted March 28, 2014 Share Posted March 28, 2014 . Remember the seventies? Remember what it took to stop it? BRING BACK "TALL PAUL"!!! I agree with you Oldtimer about Friedman, of whom I am a fan. If I read it correctly this is tied in with the velocity & multiplier effect of money in the economy. The problem now is that the FED is paying the large banks to keep their money on reserve at the regional Fed banks. Whereas they should be lending it out to businesses so that they could expand and hire new workers, thus stimulating growth in our moribund economy. The current economic conditions have served to further enrich the wealthy and increase the gulf between the rich and the rest of us. They were less hurt by the decline and were better positioned to take advantage of the huge increases in the stock indexes. My citing the increases in the price of art, etc, was to point out the glut of money among the world's rich as they seek alternate investment vehicles for their store of cash. I realize that officially, inflation has been held in check and that beef & grain prices in the US have been rising due to drought conditions and the culling of beef herds by ranchers as their profits shrink with increased feed costs. I also realize that corn prices have been driven up by the production of ethanol, which now consumes a healthy percentage of corn production in the countrry. But these are real and actual increases in the cost of feeding ones family, I guess you could term it stealth inflation. Quote Link to comment Share on other sites More sharing options...
mustang guy Posted March 28, 2014 Share Posted March 28, 2014 As is usually the case, when you give money to the government, they spend it foolishly. The old ways simply don't work in this relatively new global economy. If there is to be growth, it will come from the private sector, and that won't happen until it makes sense. Small businesses are encumbered by the same red tape and tedious regulations as big business. The main difference is that the big businesses have the wherewithal both financially and with their own accounting and legal departments to comply with all that crap. The government doesn't give a damn, and expects Joe the plumber to file the same documentation, and follow the same procedures as Ferguson Enterprises. Small businesses feel as though their government is the enemy nowadays. I think it would be a boon if the government created incubator cells around the country where accounting, compliance, and other government imposed overhead would be handled by the government. These cells would be available to all businesses of less than $5mil in revenue or 100 employees. They would not be mandated to those businesses, and they would only provide direct support for red tape imposed for government regulation compliance. Our family physician is so overwhelmed by filling out computer information that he can only see 4 patients a day. It is a perfect example of government not giving a damn. Quote Link to comment Share on other sites More sharing options...
mustang guy Posted March 28, 2014 Share Posted March 28, 2014 You have never been in a business that was regulated? I can cite a list of examples so long you will have to get a cup of coffee before reading it. I have been a businessman all my working life. I have dealt with regulators most of that time. You really don't want to get me started! Quote Link to comment Share on other sites More sharing options...
mustang guy Posted March 28, 2014 Share Posted March 28, 2014 Our family physician is so overwhelmed by filling out computer information that he can only see 4 patients a day. Wow. That the most inefficient I have ever heard of. My doc see about 30 patients a day. She comes in with two low paid assistants. One has the laptop, and the other is a gopher to do vitals, and chase down things the doc might ask for. Doctor gabs with patient, barks orders to the typist and gives instructions to the gopher. In and out in about 7 minutes. Those visits are billed at $120. My Mom's doc is even faster. He uses only one typist, but he works very fast and is in and out in 5 minutes. I think he bills that at $100. He is from another country, and has a wicked accent. We have to ask the typist for clarifications after he leaves the exam room. It's mass production medicine. In our area, that's pretty typical for all docs practicing in private corporate offices. The only place it is different (better) IME, is in the University of California health system. Docs will spend 15-30 minutes, and usually do their own charting. They uses "nurses" not medical assistants for the vitals and other exam room stuff. A full notch or two above the private offices in terms of quality of time. But in all cases, face time is way down compared to 30 years ago, and almost all of medicine is being practiced on heuristics. You get labs and tests which are compared to standards and then the computer makes standards of care recommendations based on your metrics. I don't know how a guy seeing 4 patients a day would be able to even pay his insurance! That's incredible. 45 minutes of filling out forms. That does not include the clerical part. That is the doctor's part. Then the administrative workers can enter this plethora of information into the federal database. Quote Link to comment Share on other sites More sharing options...
jacksonbart Posted March 28, 2014 Share Posted March 28, 2014 (edited) Business is already sitting on about $2T in cash for which they have no place to invest. The trouble is on the consumption side. With 70% of the economy depending on consumer spending, unless that grows, there's no need to invest in new production. Consumer spending is seriously constrained by falling wages. In short, The Bernanke has been pouring the money into a funnel that will not grow the economy. To grow the economy, the FED should have opened a special window for "Century Bonds" - 100 year bonds at 0% interest available to local and state governments for infrastructure projects, like sewers, bridges, roads, treatment plants, grid improvements. That would soak up the excess labor, raise wages, raise demand and grow the GDP. Adding more money (QE) when the demand is flat will never grow the GDP. It is having the exact effect one might imagine - banks using the money for purposes not helping the real economy. What was needed a few years back was an executive or legislative order on the FED to widen its scope. Didn't happen. It's very hard to see what is going to fuel the demand side to get 5% GDP growth. That description pretty much hit the nail on the head. Not so much in agreement on the solution though, Government infrastructure can be part of the solution, but why not focus on small business, the private sector is what's needed to improve salaries and get people back to work, not more government jobs, funded by the private sector. Don't saddle small business with more employer requirements so as to make it that much tougher to actually start and fund a business, grow it and hire people. Edited March 28, 2014 by jacksonbart Quote Link to comment Share on other sites More sharing options...
mustang guy Posted March 28, 2014 Share Posted March 28, 2014 New thread: How has the government interfered with your small business? Quote Link to comment Share on other sites More sharing options...
RT FAN Posted March 28, 2014 Share Posted March 28, 2014 This is for you MDeneen, welcome to NYC! http://www.foxnews.com/opinion/2012/02/24/tried-to-open-lemonade-stand/ Quote Link to comment Share on other sites More sharing options...
beeker Posted March 29, 2014 Share Posted March 29, 2014 i wrote a big write up although seemed too diverse last night in this thread and deleted it respecting the conservative nature this thread and forum tends to direct. Boxx is spot on with trends and at&t. my ex with her cpa and mda is in the office of the president at at&t and knowing the strenth of the workplace with them and following their capital for 10 years now there is a lot of substance to put your money behind with them Another is Comcast i will ad. watching very closely you will see them gain very adversely. I have to include trends i notice with tech gadgets will pull them down in the future although in the next 3 years its a buy situation just be ready to sell or trade patiently at about 2 and a half years from now and you will do very well Trends following price waterhouse cooper are also to spike although i am not at liberty to suggest taking the chance quite yet. time and understanding could do you very well studying certain areas you can at least understand the least bit will gain knowledge for those with the patience to do so. best of luck to all 4 Quote Link to comment Share on other sites More sharing options...
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